OUT-OF-POCKET HEALTH CARE INSURANCE COSTS:

Question:

Alan Oh was seriously infured in a skiing 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 physician's fees (including time in the hospital and eight follow-up office visits), $520 in presciption medications, and $2,100 for physical therapy treatments. All of these charges fall within customary and reasonal payment amounts.

A. If Alan had a health insurance plan that pays 80 percents of his chargers with a $500 deductible and a $5,000 stop-loss provision, how much would he have to pay out of pocket?

B. What would Alan'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 standard plan adn $250 for the HMO. If he had no other medical expenses this year, which plan would have provided more cost-effective coverage for Alan? What other factors should be considered when deciding between the two plans?