A married couple come to you to discuss health insurance and which plan out of t

Question

A married couple come to you to discuss health insurance and which plan out of two offered by the husband's employer they should take; here are the facts. Married couple, two children (one 6 yrs old the other 6 months old). The younger child has congenital health issues which indicate multiple surgeries in the next few years. The plans offered are: PLAN A Indemnity Plan that pays 80% of all medical costs with insured paying,20% coinsurance. There is a $500.00 deductible per person. The employer pays entire premium for the husband but it will cost the family $380/month for the wife and children. PLAN B Group HMO where employer still pays premium for the husband but cost for spouse and children is $295/month. There will be a $20 co-payment for any physician visit and for prescriptions. Coverage is only if they use the HMO's doctors and hospital. A- What plan would you recommend and why (at least 3 reasons)? B- What other possible health coverage options might the family consider? C- As you speak to the couple you start thinking about life insurance on both the husband, the sole income producer, and on the spouse. What would you discuss with the family regarding life insurance if all they had was a $100,000 group insurance policy on the husband fully paid by the employer.

Explanation / Answer

A)Let us analyse the competitive cost and benefit of both the option-

Cost for family under indemnity plan =(380*12)-500=4060

Cost for family under group insurance=(295*12)= 3540

i)Comparative cost in group insurance is less hence Group insurance is advisable

ii)Under indemnity plan only 80% coverage is available hence group insurance is advisable

iii)One of the child is suffering for congenial desease so frequent doctor visit will take place so $20 for physician visit by insurance company will be better for the company.

B)Th family can opt for Medicaid and can also opt for CHIP(Children Health insurance Programme)

C)The family has only one sole income earner with three dependent(wife and 2 young children).I would discuss with the family about their savings and their future goals.They should take one life insurance policy other than this Group policy out of their savings.They can take Annuity plan under which compensation is paid only on the death of the insurance.Though such plan are not good for investment but such plan put lesser insurance premium burden on the family.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.