In: Accounting
Consider a relatively simple health insurance plan with the following provisions. Office visits require a co-payment of $30. Emergency room visits have a $250 co-payment. Surgical operations have a $1,800 deductible (the first $1,800 is paid out of pocket). The monthly premium is $350. During a one-year period, somebody insured by this health insurance has the expenses shown to the right. Complete parts (a) and (b) below.
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
$_____.
(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
$_______
Expenses |
Total Cost |
---|---|
Feb. 18: Office visit |
$150150 |
Mar. 26: Emergency room |
$720720 |
Apr. 23: Office visit |
$150150 |
May 14: Surgery |
$7 comma 5007,500 |
July 1: Office visit |
$150150 |
Sept. 23: Emergency room |
$900 |
.
(Type a whole number.)
(a)
Refer to the data provided in the problem
Total amount paid for office visits is
Money one has to pay for office visits = $30 x 3 = $90
Amount paid for emergency room is =$250 x 2 = $500
amount paid for surgery is =$1,800
Premium per month =$350
Total amount to be paid by the end of the year =$350 x 12 = $4200
So, the total amount paid is=$ (90+500+1800+4200)
= $ 6,590
Hence,the total amount for the health care expenses with the insurance policy is $6,590
(b)
Add all the expenses to find the total expenses at the end of year without insurance policy:
Total expenses by the end of an year=$(150+720+150+7500+150+900)
=$ 9,570
Thus, the total health care expenses without the insurance policy is $9,570