Question

In order to make premiums more affordable for their customers, Leroux Health Insurance is considering some changes to one of the plans they offer. Both the current options and proposed changes are outlined in the charts below.

Leroux Health Insurance
Plan A
Proposed Changes
Cost:

Monthly Premium:
$248.00
$203.00
Annual Deductible:
$ 5,500.00
$8,500.00

Co-pays:

Brand-name Prescriptions
$35.00
$30.00
Generic Prescriptions
$15.00
$10.00

Visits:

Primary Care Physician:
$40.00
$30.00
Specialist:
$60.00
$45.00
Urgent Care:
$125.00
$90.00
Emergency Room:
$325.00
$250.00

If Kevin is currently insured under Leroux for his medical insurance under Plan A, how will the proposed changes affect his health care costs?
a.
Costs for regularly scheduled health care will go down, but Kevin may end up paying more if he finds himself seriously ill or injured.
b.
Costs for regularly scheduled health care will go up, but Kevin will probably pay less than he would have if he finds himself seriously ill or injured.
c.
Both the cost for regularly scheduled health care and the cost for emergency health care will go down, making the changes very good for Kevin.
d.
Both the cost for regularly scheduled health care and the cost for emergency health care would go up, contradicting the intentions of Leroux Insurance.

Answer 1

Answer: a.

Explanation: The proposed plan lowers the monthly premium and reduces copays for prescriptions and all visit types, so routine care costs fall. But the annual deductible rises from $5,500 to $8,500, so if Kevin faces a serious illness or injury he may pay more out-of-pocket before insurance begins to cover costs.