Question

2. Benefit of health insurance A cautionary tale Aa Aa In 2012, Hubert became responsible for providing his own health insurance. He obtained suitable coverage and paid annual premiums as shown in the following table. Compute Hubert's total premiums: Hubert's Premiums 2012 2013 2014 2015 $4,479 4,704 4,824 5,049 Total Except for an occasional minor illness requiring a doctor's attention, a drug prescription, and periodic, routine tests, Hubert enjoyed good health during those years. Because he had no reason to think that would change, by the end of 2014, Hubert was considering dropping his health insurance coverage. After all, he could think of a lot of other uses for the thousands of dollars he spent each year on increasing premiums. Hubert decided to pay premiums for another year but planned to take another look at his health care plan at the end of 2015

Answer 1

1.) Hubert's Total Premiums =$4,479 + 4,704 + 4,824 + 5,049 =$19,056

2.) Overall, Hubert's insurance paid 80% of the expenses making him responsible for 20% of the expenses, or $7,000. Hubert's insurance paid $28,000.

3.) His out of pocket expenses for the accident of $7,000 plus the 2015 insurance premiums of $5,049 totalled $12,049.

4.) If Hubert has canclled his health insurance at 2014 end, his out of pocket expenses for the accident would have been $35,000.

5.) Reasonable morals of the story are:

- Think long and hard about the best trade-off of coverage and cost in a healthcare plan.

- Your health can change in an instant.

6.) Instead of paying premiums for $19,056, Hubert would have paid $14,292 and would have saved $4,764

7.) In this case, Hubert out of pocket expenses specific to his snowboarding accident would have been less than they actually were because of the amount contributed by his employer.