1. Suppose that there are 2 types of plans available to you.

• Plan Ahas a deductible of $500, with 20 percent co-insurance rate for many health care services.
• Plan Bhas a deductible of $1000, with 35 percent co-insurance rate.
• Plan A costs $200 per month in premiums while Plan B costs $80.
• Discuss the trade-offs involved in making a decisionregarding what plan to purchase and why.

1. What is the opportunity cost of having health insurance? What is the opportunity cost of not having health insurance?
2. What is an out-of-pocket maximum limit and how would differences in this limit affect individual decisions regarding seeking health care services?