Question

Consider a relatively simple health insurance plan with the following provisions. Office visits require a co-payment of $40. Emergency room visits have a $275 co-payment. Surgical operations have a $1,300 deductible (the first$1,300 is paid out of pocket). The monthly premium is $400. During a one-year period, somebody insured by this health insurance has the expenses shown to the right. Complete parts (a) and (b) below.	Expenses	Total Cost
	Feb. 18: Office visit	$150
	Mar. 26:Emergency room	$720
	Apr. 23: Office visit	$150
	May 14: Surgery	$7,000
	July 1: Office visit	$150
	Sept. 23: Emergency room	$840

a. Determine the person's health care expenses for the year with the insurance policy.

The person's health care expenses with the insurance policy are

$nothing.

(Type a whole number.)

b. Determine the person's health care expenses for the year without the insurance policy.

The person's health care expenses without the insurance policy are

$nothing.

(Type a whole number.)

Answer 1

(a) Money one has to pay for office visits = $40 x 3 = $120

Amount paid for emergency room is =$275 x 2 = $550

amount paid for surgery is =$1,300

Premium per month =$400

Total amount to be paid by the end of the year =$400 x 12 = $4800

So, the total amount paid is=$ (120+550+1300+4800) = $6,770

(b) Total expenses by the end of an year=$(150+720+150+7000+150+840) = $9,010