Don and Kasey Johnson are a married couple. They are both 30 years old and they have a 3-year-old girl. Don is a loan officer and earns $75,000 a year. Kasey works as a retail store manager and earns $45,000 a year. Don's life expectancy is 80 years and Kasey's 82. They plan on retiring when they are 65. There are three health insurance policies that they could choose from (see page 3-5). 1. Health Insurance: a. Help Don and Kasey to determine which of the three plans to choose. They want to know which plan would be best if they estimate their medical costs at approximately $2,500 per year and which plan to use if they estimate their medical costs closer to $25,000 per year. Help the Johnsons determine how much of their risk they should transfer and how much they should retain (for example a higher deductible means they are retaining more risk). | Low Medical Expenses (~$2,500/year) High Medial Expenses (~$25,000/year) Estimated Medical FirstCare Bronze FirstCare Gold Cost: Blue Choice Gold FirstCare Bronze FirstCare Gold Blue Choice Gold Out of Pocket Expenses: Annual Premium: Total Cost: Which plan should they choose? And Why? b. Now suppose you are choosing the insurance for yourself. Based on your own situation, what is your annual medical cost and which insurance are you going to choose based on your family, history, lifestyle, etc.? Why? 2. Life Insurance: a. What type of life insurances the Johnsons get? Term Life Insurance b. Explain your reasoning: Cash-Value Whole Life Insurance None 3. Disability Insurance: a. What type of disability insurance should the Johnsons get? Disability Insurance Coverage for Don: Disability Insurance Coverage for Kasey: Short Term Short Term Long Term None Long Term None b. Explain your reasoning: 4. Long-Term Care Insurance: a. Should the Johnsons get long-term care insurance? b. Explain your reasoning: Yes No FirstCare FirstCare Health Plans Bronze Firstcare Health Plans HEALTH PLANS HMO Deductible Coinsurance Out of Pocket Maximum More Details Find a Provider Monthly Cost $209.97 FirstCare FirstCare Health Plans Gold HEALTH PLANS Firstcare Health Plans HMO $4,500 Premium: $209.97 Subsidy: $0.00 30% $6,350 Deductible Coinsurance Out of Pocket Maximum More Details Find a Provider 0% 20% $6,350 Monthly Cost $271.26 Premium: $271.26 Subsidy: $0.00 Deductibles and Cost Sharing In Network Out of Network Deductibles and Cost Sharing In Network Out of Network Deductible (Individual) $4,500 $0 Deductible (Individual) $0 $0 Deductible (Family) Coinsurance Out of Pocket Maximum (Individual) Out of Pocket Maximum (Family) Services Primary Care Visit Specialist Visit $10,000 $0 Deductible (Family) $0 $0 30% $0 Coinsurance 20% $0 $6,350 $0 Out of Pocket Maximum (Individual) $6,350 $0 $12,700 $0 Out of Pocket Maximum (Family) $12,700 $0 In Network Out of Network Services In Network Out of Network $60 $0 Primary Care Visit $30 $0 $70 Copay after deductible $0 Specialist Visit $50 $0 In Patient Hospital Services 30% Coinsurance after deductible $0 In Patient Hospital Services 20% $0 Emergency Room Services Mental/Behavioral Health Imaging (CT/PET Scans, MRIs) Rehabilitative Speech Therapy $300 Copay after deductible $70 copay $300 copay $0 Emergency Room Services Mental/Behavioral Health $250 $250 copay $50 copay $0 30% coinsurance $0 Imaging (CT/PET Scans, MRIs) 20% coinsurance $0 $70 copay $0 Rehabilitative Speech Therapy $50 copay $0 Rehabilitative Occupational & $70 copay $0 Physical Therapy Rehabilitative Occupational & Physical Therapy $50 copay $0 Preventative Care $0 $0 Preventative Care $0 $0 Laboratory Outpatient and Professional Services $0 $0 Laboratory Outpatient and Professional Services $0 $0 X-ray and Diagnostic Imaging 30% coinsurance $0 X-ray and Diagnostic Imaging $0 $0 Prescription Drugs Generic Rx In Network Out of Network Prescription Drugs In Network Out of Network $20 Copay after deductible Generic Rx $20 Preferred Brand Rx $50 Copay after deductible Preferred Brand Rx $50 Non Preferred Brand Rx $70 Copay after deductible Non Preferred Brand Rx $70 Specialty Drugs 30% Coinsurance after deductible Specialty Drugs 20% BlueCross Blue Choice Gold PPO 002 BlueShield Blue Cross Blue Shield of Texas PPO Deductible Coinsurance Out of Pocket Maximum More Details Find a Provider Monthly Cost $333.69 $1,500 Premium: $333.69 Subsidy: $0.00 20% $3,500 Deductibles and Cost Sharing In Network Out of Network Deductible (Individual) $1,500 $3,000 Deductible (Family) Coinsurance Out of Pocket Maximum (Individual) Out of Pocket Maximum (Family) Services Primary Care Visit Specialist Visit In Patient Hospital Services Emergency Room Services Mental/Behavioral Health $200 Copay per Stay and 20% Coinsurance $400 Copay and 20% Coinsurance a 40% coinsurance $4,500 $9,000 20% 40% $3,500 $7,000 $10,500 $21,000 In Network Out of Network $10 40% coinsurance $60 40% coinsurance 40% coinsurance 20% coinsurance after $400 copay/visit $10 copay Imaging (CT/PET Scans, MRIs) 20% coinsurance 40% coinsurance Rehabilitative Speech Therapy 20% coinsurance 40% coinsurance Rehabilitative Occupational & 20% coinsurance 40% coinsurance Physical Therapy Preventative Care $0 40% coinsurance Laboratory Outpatient and 20% coinsurance 40% coinsurance Professional Services X-ray and Diagnostic Imaging 20% coinsurance 40% coinsurance Prescription Drugs In Network Out of Network Generic Rx No Charge Preferred Brand Rx $35 Non Preferred Brand Rx $75 Specialty Drugs $150