(Table: Insurance Claims) Five people, who vary in health status, are his or her own health status and expected medical bills, which are gi likely to file a claim. Annual Expected Health Insurance Claim $30,000 20,000 Person Darwin Edgar Fran Hilda Jared 10,000 8,000 2,000 Suppose that the insurance company does not know the health status group as a whole. If the insurance company sets the premium based people would be willing to pay the premium. two
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- You have a gross annual income of $62,500. Use the multiple of income method to determine the minimum amount of life insurance you should carry. Answer is complete but not entirely correct. Minimum insurance need $ 437,500 x3. Two different insurance agents present you two health insurance policies as follows. AIA: It covers at most 10 outpatient visits with maximum reimbursement of 80%. For specialty, the policy would not be effective until your expenses exceed $2000. Each claim receives $800 for a maximum of 10 claims. HSBC Life: For outpatient visits, a maximum 20 visits are covered with the first 5 visits are of co-insurance rate of 80% and the next 15 visits are subject to 60% co- insurance rate. For specialty, you are allow to claim at most 5 with each claim capped at $1000. Your health care services consumed are as follows: Outpatient visits of 12 with each costs $300; Specialty of 3 with each costs $2500. Which agent's policy would ! you prefer? Explain.9. If your medical insurance policy has a $200 deductible and a 100 percent co-payment, how much will you pay on a medical bill of $1,000? (? 10. Co-insurance reduces adverse selection. True or false, explain (: 1
- Suppose a company offers a standard insurance contract with a premium (r) of $1,000 and a payout (q) of $10,000. Suppose that Eleanor earns a healthy state income of $30,000, a sick state income of $20,000, and has a 5% chance of becoming ill. From this information, you can determine that the expected profit for the insurance company is likely: O positive O equal to zero O negativeA consumer’s demand for a medical service is Q=100−PP where PP is the out-of-pocket price she actually faces. She is considering four different insurance options: uninsurance, full insurance, a 50% coinsurance plan, and a copayment plan with a $25 copay. a. Assume this service has a list price of PL =$70. Calculate Q under each insurance plan.b. Calculate the amount of social loss under each insurance plan.c. Derive a general expression for social loss as a function of x and PL, where x is the copay amount under a copayment plan. For simplicity’s sake, assume x<PL.d. Derive a general expression for social loss as a function of y and PL, where y is the coinsurance rate.B. A patient is a member of a health plan with a 15 percent discount from the provider’s usual fees and a $10 copay. The day's charges are $480. What are the amounts that the HMO and the patient each pay?
- The figure shows estimated medical costs versus what a user actually pays for three health insurance plans with different deductibles. For which plan does the user pay the most for estimated medical costs of $3,000?9. Define out of pocket maximum. a. A flat-rate fee you must pay when receiving any kind of health care service. b. The maximum amount of money your insurance will cover of a certain health care service. c. The maximum amount you will have to pay out of pocket in one year for the benefits your insurance covers. d. The maximum amount of money the insured party will pay toward prescription medications.An insurance company is offering a new policy to its customers. Typically, the policy is bought by a parent or grandparent for a child at the child's birth. The details of the policy are as follows: The purchaser (say, the parent) makes the following six payments to the insurance company: $ 820 $ 820 $920 First birthday: Second birthday: Third birthday: Fourth birthday: Fifth birthday: Sixth birthday: $920 $ 1,020 $ 1,020 After the child's sixth birthday, no more payments are made. When the child reaches age 65, he or she receives $115,000. If the relevant interest rate is 9 percent for the first six years and 5 percent for all subsequent years, what is the value of the policy at the child's 65th birthday? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Child's 65th birthday
- How much money will a patient using this insurance plan have to pay for a $4200 medical bill?Health Care Choices. You have a choice of two health insurance plans with the following terms. Assume that both plans cover 100% of expenses after the deductible and co-payments. Plan A Plan B Monthly premium: $300 Monthly premium: $700 Annual deductible: $5000 Annual deductible: $1500 Office visit co-payment: $25 Office visit co-payment: $25 Emergency room co-payment: $500 Emergency room co-payment: $200 Surgical operations co-payment: $250 Surgical operations: no co-payment Suppose that during a one-year period your family received the following medical bills. Service Total cost (before insurance) Jan. 23: Emergency room $800 Feb. 14: Office visit $100 Apr. 13: Surgery $1400 June 14: Surgery $7500 July 1: Office visit $100 Sept. 23: Emergency room $1200 Determine your annual health care expenses if you have Plan A. Determine your annual health care expenses if you have Plan B. Determine your health care expenses for the year if you have…Under the TRAIN law, the amount of premium allowed per family during thetaxable year for health and/or hospitalization insurance is P2,500. a.true b.false