Jamie has a choice between two health insurance plans. The first one costs $50 a month but has a deductible of $7,000. The other is $150 a month but the deductible is $1,000. Which will cost Jamie MORE if he has a $3,000 medical procedure this year?
A.
They will average out to the same amount.
B.
The second one because the deductible is lower.
C.
The first one because the deductible is higher.
D.
The first one because the monthly payment is lower.
C. The first one because the deductible is higher.
To determine which health insurance plan will cost Jamie more if he has a $3,000 medical procedure this year, we need to consider the monthly cost and the deductible of each plan.
Option A: They will average out to the same amount.
Option B: The second one because the deductible is lower.
Option C: The first one because the deductible is higher.
Option D: The first one because the monthly payment is lower.
To calculate the total cost for each plan, we need to consider the monthly cost and deductible:
For the first plan:
- Monthly cost: $50 x 12 months = $600
- Deductible: $7,000
For the second plan:
- Monthly cost: $150 x 12 months = $1800
- Deductible: $1,000
Scenario 1: With the first plan:
- Jamie has a $3,000 medical procedure.
- Deductible: $7,000, and the procedure costs $3,000.
- Jamie will have to pay the full $3,000, as it is less than the deductible.
- Total cost for the year: $600 (monthly cost) + $3,000 (medical procedure) = $3,600.
Scenario 2: With the second plan:
- Jamie has a $3,000 medical procedure.
- Deductible: $1,000, and the procedure costs $3,000.
- Jamie will have to pay the full $3,000, as it is less than the deductible.
- Total cost for the year: $1,800 (monthly cost) + $3,000 (medical procedure) = $4,800.
Therefore, the correct answer is C. The first plan will cost Jamie more because the deductible is higher.
To determine which health insurance plan will cost Jamie more if he undergoes a $3,000 medical procedure, we need to consider both the monthly cost and the deductible for each plan.
For the first plan (costing $50 a month with a $7,000 deductible):
- The total cost for the year would be $50 * 12 = $600.
- The deductible of $7,000 means that Jamie would have to pay the entire $3,000 medical procedure cost out of pocket.
For the second plan (costing $150 a month with a $1,000 deductible):
- The total cost for the year would be $150 * 12 = $1,800.
- The deductible of $1,000 means Jamie would have to pay the entire $1,000 out of pocket, but then the insurance would cover the remaining $2,000 of the procedure cost.
Comparing the total costs for both plans, we can determine that the first plan will cost Jamie more. Therefore, the answer is:
C. The first one because the deductible is higher.