Number of insuredAnticipated Health Claims/year/person

10$600

10750

10900

101050

101200

101350

101500

101650

102250

104500

Determine what happens in the first four years if there is a $750 penalty for not carrying insurance.Assume that nothing else changes, except that now the population decides whether to continue purchasing insurance based not only on their anticipated health claims, but also the penalty they will pay if they do not purchase insurance.

PremiumThreshold forTotal number whoTotal Number

buying insurancehave dropped insuranceRemaining

Yr. 1 $599

Yr. 2 $1,575

Yr. 3 $2,800

Yr. 4 $4,500