Tiya and Sam Smith are a married couple. They are both 42 years old and they have a son (15 years old) and a daughter (10 years old). Sam is an engineer and earns $75,000 a year. Tiya is a school teacher and earns $40,000 a year. Sams life expectancy is 84 years and Tiyas is 87. They plan on retiring when they are 67. There are three health insurance policies that they could choose from (see attached).

Health Insurance:

Help Sam and Tiya 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 $3,500 per year and which plan to use if they estimate their medical costs closer to $50,000 per year. Help the Smiths 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 (~$3,500/year)			High Medial Expenses (~$50, 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 Smiths 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 Smiths get?

Coverage for Sam:

Short Term Long Term Insurance

Coverage for Tiya:

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