Question

In: Operations Management

Dave has medical coverage through a managed care plan. His plan has a $200 annual deductible,...

Dave has medical coverage through a managed care plan. His plan has a $200 annual deductible, and an 80/20 payment scheme for in-network care. For out of network care, his deductible is $500 and there is a 50/50 payment scheme. He has received no medical care this year

While playing basketball with friends, Dave injures his ankle and a friend takes him to the local emergency room. The total bill for care is $1,000.

(a) How much will Dave have to pay out of pocket if the emergency room is within his insurance network?

(b) How much will Dave have to pay out of pocket if the emergency room is NOT within his insurance network?

Solutions

Expert Solution

a) If the emergency room is within the network, then Dave will have to pay 20% of 1000$ that is 200$ as that is the scheme, 80% concerned insurer and 20% Dave has to pay out of his own pocket

b) If the emergency is not within the network, then Dave will have to pay 50% of 1000$ that is 500$ out of his own pocket, as out of network deal is 50-50 if not covered in the insurance network.


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