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The problem is asking to calculate Latesha Moore's annual out-of-pocket cost using a traditional health insurance plan, which includes:

1. An 80% coverage for doctor visits after a $250 deductible.
2. A $10 co-payment per visit.
3. A $21 monthly premium deducted from her paycheck.
4. She visits the doctor once a month (12 visits/year).
5. Each visit costs $80.

Let's break this down:

### 1. Deductible:
- Latesha needs to pay the first $250 of her medical expenses out-of-pocket before the insurance covers 80%. 
- Each doctor visit costs $80, so she pays for the first few visits until the $250 deductible is met.

- First 3 visits: $ 3 \times 80 = 240 $ (This does not fully meet the deductible.)
- After 4 visits: $ 4 \times 80 = 320 $
- Out of this, Latesha would pay the $250 deductible, and the insurance will cover 80% of the remaining $70 (which is $320 - $250).

Amount Latesha pays after deductible for the 4th visit:
- Latesha's share: $ 250 + 0.20 \times 70 = 250 + 14 = 264 $

### 2. Co-payment:
After the deductible, she will also have to pay the $10 co-payment for each of the remaining 8 visits:
- 8 visits with a co-payment: $ 8 \times 10 = 80 $

### 3. Insurance Premium:
- She pays $21 monthly, so her total annual premium is:
  $ 21 \times 12 = 252 $

### 4. Total Out-of-Pocket:
Now let's add up the costs:
- Total deductible and payment for the first four visits: $264
- Co-payments for the remaining 8 visits: $80
- Annual premium: $252

Total out-of-pocket cost = $ 264 + 80 + 252 = 596 $

Thus, Latesha would pay an annual out-of-pocket cost of **$596** with the traditional plan.

Would you like further clarification or details?

Here are 5 related questions to consider:
1. What would Latesha's cost be with the HMO plan for comparison?
2. How does the deductible affect the overall annual cost?
3. What would happen if Latesha visited the doctor more than 12 times per year?
4. How would the costs change if the co-payment increased?
5. What is the impact of the 80% coverage on total medical expenses?

**Tip:** Always calculate premiums separately from other out-of-pocket costs for a clearer understanding of the total annual expense.

Latesha Moore has a choice at work between a traditional health insurance plan that pays 80 percent of the cost of doctor visits after a $250 deductible and an HMO that charges a $10 co-payment per visit plus a $21 monthly premium deduction from her paycheck. Latesha anticipates seeing a doctor once a month for her high blood pressure. The cost of each office visit is $80. She normally sees the doctor an average of three times a year for other health concerns. Comment on the difference in costs between the two health-care plans and the advantages and disadvantages of each.

Learn how to calculate and compare the out-of-pocket costs for Latesha Moore's traditional health insurance plan and HMO plan. This example covers cost analysis, insurance deductibles, and co-payments, and is suitable for college-level health economics discussions.

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