Ken and Maureen Blake have two children, with ages of 6 years and 5 months. Thei
ID: 2717619 • Letter: K
Question
Ken and Maureen Blake have two children, with ages of 6 years and 5 months. Their younger child, Don, was born with a congenital heart defect that will require several major surgeries in the next few years to correct fully. Ken is employed as a salesperson for a major pharmaceutical firm, and Maureen is a stay-at-home mother. Ken’s employer offers employees a choice between two health benefit plans:
• An indemnity plan that allows the Blakes to choose health services from a wide range of doctors and hospitals. The plan pays 80 percent of all medical costs, and the Blakes are responsible for the other 20 percent. There’s a deductible of $500 per person. Ken’s employer will pay 100 percent of the cost of this plan for Ken, but the Blakes will be responsible for paying $380 a month to cover Maureen and the children under this plan.
• A group HMO. If the Blakes choose this plan, the company still pays 100 percent of the plan’s cost for Ken, but insurance for Maureen and the children will cost $295 a month. They’ll also have to make a $20 co-payment for any doctor’s office visits and prescription drugs. They will be restricted to using the HMO’s doctors and hospital for medical services. Which plan would you recommend that the Blakes choose? Why? What other health coverage options should the Blakes consider?
Explanation / Answer
Solution :
By comparing the costs and benefits of the two plan , the plan recommended for the Blakes would be indemnity plan that allows the Blakes to choose health services from a wide range of doctors and hospitals. It gives 100% coverage to ken and 80% coverage for Maureen and child . Even though the plan has a deductible of $ 500 per person and Maureen and child has to pay $ 380 a month for coverage , the benefit it gives by covering in a wide range of doctors and hospitals is the reason to recommend this plan .
Types of plans Indemnity Plan Group HMO Benefits 100% cover for Ken and 80% for Maureen and child 100% cover for Ken Costs $500 deductible+$380 per month $295+$20 copayRelated Questions
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