Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ethan Lee was seriously injured in a skiing accident that broke both his legs and an arm. His medical expenses included five days of hospitilization

Ethan Lee was seriously injured in a skiing accident that broke both his legs and an arm. His medical expenses included five days of hospitilization at $900 a day, $6, 200 in surgical fees, $4,300 in physician's fees (inclduing time in the hospital and eight follow-up visits), $520 in prescription medications, and $2,100 for physical therapy treatments. All of these charges fall within customary adn reasonable payment amounts.

a. If ethan had an idemnity plan that pays 80 percent of his charges with a $500 deductible and a $5,000 stop-loss provision, how much woul dhe have to pay out of pocket?

b. What would Ethan's out of pocket expenses be if he belonged to an HMO with a $20 co-pay for office visits?

c. Monthly premiums are $155 for the indemnity plan and $250 for the HMO. If he had no other medical expenses this year, which plan would have provided more cost-effective coverage for Ethan? WHat other factors should be considered when deciding between the two plans?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Risk Management And Financial Institution

Authors: John C. Hull

2nd Edition

0136102956, 9780136102953

More Books

Students also viewed these Finance questions