Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 1 1 - 7 Evaluating Health Insurance Options [ L 0 1 1 - 4 ] Ronald started his new job as a controller

Problem 11-7 Evaluating Health Insurance Options [L011-4]
Ronald started his new job as a controller with Aerosystems today. Carole, the
employee benefits clerk, gave Ronald a packet that contained information on the
company's health insurance options. Aerosystems offers its employees the choice
between a private insurance company plan (Blue Cross or Blue Shield), an HMO, and a
PPO. Ronald needs to review the packet and make a decision on which health care
program best fits his needs. The following is an overview of that information.
a. The monthly premium cost for Ronald for the Blue Cross or Blue Shield plan will be
$44.47. For all doctor's office visits, prescriptions, and major medical charges,
Ronald will be responsible for 20 percent and the insurance company will cover 80
percent of the covered charges. The annual deductible is $500.
b. The HMO is provided to employees free of charge. The copayment for doctors'
office visits and major medical charges is $20. Prescription copayments are $15.
The HMO pays 100 percent after Ronald's copayment. There is no annual
deductible.
c. The POS requires that the employees pay $25.44 per month to supplement the cost
of the program with the company's payment. If Ronald uses health care providers
within the plan, he pays the copayments as described above for the HMO. He can
also choose to use a health care provider outside of the service and pay 20 percent
of the covered charges after he pays a $500 deductible. The POS will pay for 80
percent of those covered visits. There is no annual deductible for in-network
expenses.
Ronald decided to review his medical bills from the previous year to see what costs he
had incurred and to help him evaluate his choices. He visited his general physician
four times during the year at a cost of $199 for each visit. He also spent $74 and $97
on prescriptions during the year. (For the purposes of the POS computation, assume
that Ronald visited a physician outside of the network plan. Assume he had his
prescriptions filled at a network-approved pharmacy.)
What annual medical costs will Ronald pay using the sample medical expenses
provided if he were to enroll in the Blue Cross or Blue Shield plan?
Note: Round your intermediate calculations and final
answer to 2 decimal places.
(The answer's $917.60 and $627.04 provided by 2 previous experts are not correct. Honeslty I'm super confused at this point.)
image text in transcribed

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

Machine Learning In Finance From Theory To Practice

Authors: Matthew F Dixon, Igor Halperin, Paul Bilokon

1st Edition

3030410676, 978-3030410674

More Books

Students also viewed these Finance questions

Question

What happended in Alberta when the world market price of oil fell

Answered: 1 week ago