Assume there are two health insurance plans, Plan A and Plan B.
Plan A • $1,000 annual premium • $5,000 annual deductible • 50% co-insurance on health care spending between $5,000 and $7,000 • 25% co-insurance on health care spending between $7,000 and $10,000 • Full insurance on health care spending above $10,000
Plan B • $5,000 annual premium • No deductible • 50% co-insurance on health care spending up to $5,000 • 25% co-insurance on health care between $5,000 and $10,000 • Full insurance on health care spending above $10,000
A) If you expect to spend $6,000 on health care this year. Which plan would be best for you? Show your work.
B) Thinking about the best interests of society, what is your opinion on which plan is best for the average citizen? Defend your opinion by discussing the optimal amount of care to use, affordability, and the insurance value of health insurance.