Question
Project 7 Risk Management Name: Nathan Martinez Instructions: Please complete this assignment and submit through Blackboard. You may consult with your classmates/instructor at any time.
Project 7 Risk Management Name: Nathan Martinez
Instructions: Please complete this assignment and submit through Blackboard. You may consult with your classmates/instructor at any time. Please be very thoughtful when you explain your decisions.
Jim and Allison Jones are a married couple. They are both 47 years old and they have a son (17 years old) and a daughter (14 years old). Jim is an engineer and earns $95,000 a year. Allison is a school teacher and earns $30,000 a year. Jims life expectancy is 80 years and Allisons is 82. They plan on retiring when they are 67. There are three health insurance policies that they could choose from (see attached).
Health Insurance:
Help Jim and Allison to determine which of the three plans to choose. They want to know which plan would be best if they estimate their medical costs at approximately $2,500 per year and which plan to use if they estimate their medical costs closer to $45,000 per year. Help the Jones family determine how much of their risk they should transfer and how much they should retain (for example a higher deductible means they are retaining more risk).
(Hint 1: Find out which one provides sufficient coverage at a reasonable cost.)
Low Medical Expenses (~$2,500/year)
High Medial Expenses (~$45, 000/year)
Estimated Medical Cost:
First Care Bronze
First Care Gold
Blue Choice Gold
First Care Bronze
First Care Gold
Blue Choice Gold
Out of Pocket Expense:
Annual Premium: Cost:
Total Cost:
Which plan should they choose? And Why?
Based on your own situation, are you more towards the high or the low cost based on your family, history, lifestyle, etc.? Why?
Life Insurance:
What type of life insurances the Jones get?
Term Life Insurance
Cash-value Whole Life Insurance
None
Explain your reasoning with evidence from the book and lectures.
Disability Insurance:
Based on what you are learning in this course what type of disability insurance should the Jones get?
Coverage for Jim:
Short Term Long Term Insurance
Coverage for Allison:
Short Term Long Term Insurance
Explain your reasoning with evidence from the book and lectures.
Deductibles and Cost Sharing
In Network
Out of Network
Deductible (Individual)
$4,500
$0
Deductible (Family)
$10,000
$0
Coinsurance
30%
$0
Out of Pocket Maximum (Individual)
$6,350
$0
Out of Pocket Maximum (Family)
$12,700
$0
Services
In Network
Out of Network
Primary Care Visit
$60
$0
Specialist Visit
$70 Copay after deductible
$0
In Patient Hospital Services
30% Coinsurance after deductible
$0
Emergency Room Services
$300 Copay after deductible
$300 copay
Mental / Behavioral Health
$70 copay
$0
Imaging (CT/PET Scans, MRIs)
30% coinsurance
$0
Rehabilitative Speech Therapy
$70 copay
$0
Rehabilitative Occupational & Physical Therapy
$70 copay
$0
Preventative Care
$0
$0
Laboratory Outpatient and Professional Services
$0
$0
X-ray and Diagnostic Imaging
30% coinsurance
$0
Prescription Drugs
In Network
Out of Network
Generic Rx
$20 Copay after deductible
Preferred Brand Rx
$50 Copay after deductible
Non Preferred Brand Rx
$70 Copay after deductible
Specialty Drugs
30% Coinsurance after deductible
Deductibles and Cost Sharing
In Network
Out of Network
Deductible (Individual)
$0
$0
Deductible (Family)
$0
$0
Coinsurance
20%
$0
Out of Pocket Maximum (Individual)
$6,350
$0
Out of Pocket Maximum (Family)
$12,700
$0
Services
In Network
Out of Network
Primary Care Visit
$30
$0
Specialist Visit
$50
$0
In Patient Hospital Services
20%
$0
Emergency Room Services
$250
$250 copay
Mental / Behavioral Health
$50 copay
$0
Imaging (CT/PET Scans, MRIs)
20% coinsurance
$0
Rehabilitative Speech Therapy
$50 copay
$0
Rehabilitative Occupational & Physical Therapy
$50 copay
$0
Preventative Care
$0
$0
Laboratory Outpatient and Professional Services
$0
$0
X-ray and Diagnostic Imaging
$0
$0
Prescription Drugs
In Network
Out of Network
Generic Rx
$20
Preferred Brand Rx
$50
Non Preferred Brand Rx
$70
Specialty Drugs
20%
Deductibles and Cost Sharing
In Network
Out of Network
Deductible (Individual)
$1,500
$3,000
Deductible (Family)
$4,500
$9,000
Coinsurance
20%
40%
Out of Pocket Maximum (Individual)
$3,500
$7,000
Out of Pocket Maximum (Family)
$10,500
$21,000
Services
In Network
Out of Network
Primary Care Visit
$10
40% coinsurance
Specialist Visit
$60
40% coinsurance
In Patient Hospital Services
$200 Copay per Stay and 20% Coin
40% coinsurance
Emergency Room Services
$400 Copay and 20% Coinsurance a
20% coinsurance after $400 copay/visit
Mental / Behavioral Health
$10 copay
40% coinsurance
Imaging (CT/PET Scans, MRIs)
20% coinsurance
40% coinsurance
Rehabilitative Speech Therapy
20% coinsurance
40% coinsurance
Rehabilitative Occupational & Physical Therapy
20% coinsurance
40% coinsurance
Preventative Care
$0
40% coinsurance
Laboratory Outpatient and Professional Services
20% coinsurance
40% coinsurance
X-ray and Diagnostic Imaging
20% coinsurance
40% coinsurance
Prescription Drugs
In Network
Out of Network
Generic Rx
No Charge
Preferred Brand Rx
$35
Non Preferred Brand Rx
$75
Specialty Drugs
$150
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Personal Financial Planning
Authors: Lawrence J. Gitman, Michael D. Joehnk, Randy Billingsley
13th edition
1111971633, 978-1111971632
