Margo, age 35, was severely injured in an auto accident.

She is covered under her employers preferred

provider organization (PPO) plan. The plan has a

$1,000 calendar-year deductible, 80/20 percent coinsurance,

and an annual out-of-pocket maximum limit

of $3,000. As a result of the accident, Margo incurred

the following medical expenses:

Cost of ambulance to the hospital $500

Hospital bill for a 3-day stay $24,000

Surgery for broken leg $5,000

Prescription drugs outside the hospital $300

Physical therapy for the broken leg $1,200

In addition, Margo could not work for 1 month and

lost $4,000 in earnings.

a. Based on this information, how much will Margo

collect for her injury if she receives medical care

from healthcare providers who are part of the PPO

network? (Assume that all charges shown are the

allowable or approved charges by the insurer and

all providers are in the PPO network.)

b. Assume that Margos broken leg does not heal properly,

and she needs another surgical operation.

Margo would like a different surgeon with an outstanding

professional reputation to perform the

operation. The surgeon is not a member of the PPO

network. Will Margos plan pay for the surgery?

Explain your answer.