Choosing an insurance plan
Not what you're looking for?
Acme Health has three plans it offers to mid-size employers.
1.This basic one costs $4,000 for the employee this year, plus $2,500 for the spouse, and $2,500 for any number of children. It also has a family deductible amount of $2,000 before benefits (80% paid; 20% co-insurance) kick in.
2.The second plan costs $5,000 for the employee and $3,000 for a spouse and an additional amount of $3,000 to any number of children. It has a $1,000 family deductible and after that, insurance of 85%, 15% co-insurance.
3.The third plan costs $7,000 for the employee and $3,500 for the spouse and $3,500 for children. It has a $250 deductible for the total family each year. After that, insurance pays 95%, with 5% co-insurance.
As an employee of the company, which option would you take? Explain your answer.
Consider the probability of using the health services, the total expected cost of the co-payments, and the tax status of all of the expenses.
HINT: The premiums ($9,000, $11,000, or $14,000) can be paid with pretax dollars, as an income tax avoidance method. In all three cases, the employer pays nothing.
Purchase this Solution
Solution Summary
Choosing a health care plan can be very difficult. The first thing you should consider is the deductible; the money that you have to pay out of pocket before the insurance benefits kick in. As general rule, the higher the deductibles, the less premium you paid monthly. Choose a plan with the highest deductible will save you money in the long run.
Solution Preview
Choosing a Health Plan
1.This basic one costs $4,000 for the employee this year, plus $2,500 for the spouse, and $2,500 for any number of children. It also has a family deductible amount of $2,000 before benefits (80% paid; 20% co-insurance) kick in.
2.The second plan costs $5,000 for the employee and $3,000 for a spouse and an additional amount of $3,000 to any number of children. It has a $1,000 family deductible and after that, insurance of 85%, 15% co-insurance.
3.The third plan costs $7,000 for the employee and $3,500 for the spouse and $3,500 for children. It has a $250 deductible for the total family each year. After that, insurance ...
Purchase this Solution
Free BrainMass Quizzes
Managed Care Organizations
This quiz will test the basics of managed care organizations. It is important to know how our health care delivery system operates through managed care.
Celiac Disease
This quiz will provide a brief introduction to Celiac Disease. Questions will focus on definitions and symptoms.
Crohn's Disease
How much do you know about this condition?
What everyone should know about MRSA
This quiz focuses on what everyone should know about community MRSA. Community MSRA is an infection in healthy people.
First Aid
Do you know how to provide first aid?