In 2012, Alison became responsible for providing her own health insurance. She o
ID: 1171842 • Letter: I
Question
In 2012, Alison became responsible for providing her own health insurance. She obtained suitable coverage and paid annual premiums as sown in the following table. Compute Alison's total premiums: Alison'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, Alison enjoyed good health during those years. Because she had no reason to think that would change, by the end of for the thousands of dollars she spent each year on increasing premiums. Alison decided to pay premiums for another year but planned to take another look at her health care plan at the end of 2015 It Could Happen to You, It Could Happen to Me In December 2015, Alison accepted an invitation from friends to go snowboarding. Alison did everything right: took a lesson, stayed on trails well within her skill level, and maintained an awareness of people and objects near her Even though she thought it was a bit dorky to wear wrist guards and a helmet, her friends insisted that she take standard and reasonable safety measures Alison was enjoying the day when, from out of nowhere (actually, the woods), came an out of control skier who ran into Allison. Alison was injured and taken to the nearest hospital by ambulance. Alison's injuries included a broken wrist and elbow as well as cuts and bruises. Of biggest concern was the uncertainty of her head injury. Allson spent a couple of days in intensive care. Fortunately, she didnt have a broken skull, but did have a concussion. Surgery was performed to repair the broken wrist and eilbow. Since Alison was in good health, her recovery was complete. Alison returned to full function in about six months. Soon after Alison returned home, however, the medical bills for the ambulance, emergency room, intensive medications, doctors, tests, and other services arrived. Alison also had to have physical therapy for her wrist and elbow. Her total medical expenses were $40,000. It was time to find out if all those premiums paid since 2012 would pay off for just one, albeit dramatic, incident Overall, Alison's insurance paid 75% of the total medical expenses, thus making her responsible for %ofthe O Type here to search PrtScExplanation / Answer
Overall, Alison’s insurance paid 75 percent of the total medical expenses, thus making her responsible for 25% of the expenses or $10,000. Alison’s insurance paid $30,000.
Her out of pocket expenses for the accident of $10,000 plus the 2015 insurance premium of $5049 totaled $15049.
If Alison had canceled her health insurance policy at the end of 2014, her out of pocket expenses for the accident would have been $40,000.
Alison would not have benefited from canceling the policy at the end of 2014, as it would have saved her $5049 in premium costs but would have added $30,000 to her out of pocket medical cost.
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