Oscar Wang was seriously injured in a snowboarding accident that broke both his legs and an arm. His medical expenses included five days of hospitalization at $900 a day, $6,200 in surgical fees, $4,300 in physicians fees (including time in the hospital and eight follow-up office visits), $520 in prescription medications, and $2,100 for physical therapy treatments. All of these charges fall within customary and reasonable payment amounts.

If Oscar had an indemnity plan that pays 80 percent of his charges with a $500 deductible and a $5,000 stop-loss provision, how much would he have to pay out of pocket?

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

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 Oscar? What other factors should be considered when deciding between the two plans?