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Chapter 9 Financial Planning Exercise 2 David Chen was seriously injured in a snowboarding accident that broke both his legs and an arm. His medical
Chapter 9 Financial Planning Exercise 2 David Chen was seriously injured in a snowboarding accident that broke both his legs and an arm. His medical expenses included 5 days of hospitalization at $1,300 a day, $9,500 in surgical fees, $6,800 in physician's fees (including time in the hospital and six follow-up office visits), $500 in prescription medications, and $2,500 for physical therapy treatments. All of these charges fall within customary and reasonable payment amount:s a. If David has an indemnity plan that pays 90% of his charges with a $500 deductible and has a $5,000 stop-loss provision, how much will he have to pay out-of-pocket? Round to the nearest dollar. b. What would David's out-of-pocket expenses be if he belonged to an HMO with a $15 co-pay for office visits? Round to the nearest dollar c. Monthly premiums are $150 for the indemnity plan and $105 for the HMO. If he has no other medical expenses this year, which plan provides more cost-effective coverage for David? HMO
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