Health states in the coming year:. Health states in the coming year:. Please use the information in Table 1 to answer questions 1-4 on the following page. Tables are provided for each plan for your convenience. Although you do not have to use the tables if you prefer a different methodology, you do need to show your work.
| Table 1 | |||
| Plan 1 | Plan 2 | Plan 3 | |
| Premiums | $80/month | $100/month | $150/month |
| Co-Pays | $30 | $15 | $10 |
| Deductible | $1,000 | $500 | $200 |
| Coinsurance | 80/20 | 80/20 | 80/20 |
| Out-of-Pocket Max | $3,000 | $1,000 | $300 |
| Plan 1 | ||||||||||
| Charges | Co-pay | Remaining Balance | Insurance Payment | Patient Payment | Total OOP for Visit | Total OOP Towards Deductible | Total OOP YTD | Total OOP Twrds Deductible YTD | Total Insurance Payment YTD | |
| Visit 1 | 500 | |||||||||
| Visit 2 | 500 | |||||||||
| Visit 3 | 500 | |||||||||
| Plan 2 | ||||||||||
| Charges | Co-pay | Remaining Balance | Insurance Payment | Patient Payment | Total OOP for Visit | Total OOP Towards Deductible | Total OOP YTD | Total OOP Twrds Deductible YTD | Total Insurance Payment YTD | |
| Visit 1 | 500 | |||||||||
| Visit 2 | 500 | |||||||||
| Visit 3 | 500 | |||||||||
| Plan 3 | ||||||||||
| Charges | Co-pay | Remaining Balance | Insurance Payment | Patient Payment | Total OOP for Visit | Total OOP Towards Deductible | Total OOP YTD | Total OOP Twrds Deductible YTD | Total Insurance Payment YTD | |
| Visit 1 | 500 | |||||||||
| Visit 2 | 500 | |||||||||
| Visit 3 | 500 | |||||||||
Questions
- What is your total out-of-pocket for each of the three plans?
- If you select Plan 2, what is your total out-of-pocket for the second visit?
- If you select Plan 3, what is your total out of pocket for the second visit?
- Given the above scenario, which of the three plans should you choose to enroll in?
- Suppose you currently make $80k/year and you are faced with two possible health states in the coming year: sick or healthy. There is an 87% chance you will be healthy and a 13% chance of being sick. If you are sick, the cost of treatment is $80k. Assume also that you obtain 100u when making $80k under certainty and 87u when making $65k under certainty. Assume there are 4,000 people in the risk pool.
- Graph the utility-of-income under certainty and the expected utility-of-income under uncertainty.
- What is your expected income? What is your expected utility?
- What is the price of uncertainty?
- What is the expected payout?
- What is the minimum premium that must be charged?
- What is the maximum premium that can be charged?
- Suppose you currently make $50k/year and you are faced with two possible health states in the coming year: sick or healthy. There is a 94% chance you will be healthy and an 6% chance of being sick. If you are sick, the cost of treatment is $50k. Assume also that you obtain 100u when making $50k under certainty and 94u when making $43k under certainty. Assume there are 2,500 people in the risk pool.
- Graph the utility-of-income under certainty and the expected utility-of-income under uncertainty.
- What is your expected income? What is your expected utility?
- What is the price of uncertainty?
- What is the expected payout?
- What is the minimum premium that must be charged?
- What is the maximum premium that can be charged?
- Suppose you currently make $200k/year and you are faced with two possible health states in the coming year: sick or healthy. There is a 99% chance you will be healthy and a 1% chance of being sick. If you are sick, the cost of treatment is $200k. Assume also that you obtain 100u when making $200k under certainty and 99u when making $190k under certainty. Assume there are 8,500 people in the risk pool.
- Graph the utility-of-income under certainty and the expected utility-of-income under uncertainty.
- What is your expected income? What is your expected utility?
- What is the price of uncertainty?
- What is the expected payout?
- What is the minimum premium that must be charged?
- What is the maximum premium that can be charged?
p(2)
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Health states in the coming year:
Health states in the coming year:
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