Consider a consumer with a medical bill of $9,000. She has a high-deductible PPO plan and pays $350 for a monthly premium. Her plan has $1,200 deductible, a 25 percent coinsurance rate on all expenses over $1,200, and $4,000 out-of=pocket maximum.

1. Calculate his out-of-pocket liability for this bill. Show your work.

2. Suppose that she selects a low-deductible PPO plan which has $700 deductible and a 20 percent coinsurance rate on all expenses over $700. Her monthly premium increased to $700. Calculate his out-of-pocket liability for this bill given the same amount of a medical bill ($9,000). Show your work.

3. She is 27 years old. Suppose that she is healthy without any chronic condition and this medical treatment is very unusual. Based on his health conditions, premium, and insurance coverage, which plan (1. Low-deductible or 2. High-deductible) would he select? Explain.