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 ​$5 ​co-payment per visit plus a ​$15 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 ​$60. 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.

Let's break down the costs and compare the two health insurance plans that Latesha Moore is considering.

### 1. **Traditional Health Insurance Plan**

- **Deductible**: $250 per year.
- **Coverage**: After the deductible is met, the insurance pays 80% of the costs of doctor visits.
- **Doctor visit cost**: $60 per visit.
- **Anticipated visits**: 12 visits for high blood pressure + 3 other visits = 15 visits per year.

#### Steps to calculate:
1. **Deductible payment**: The first $250 of the total cost for doctor visits is paid by Latesha.
2. **Cost after deductible**: For the remaining amount (after $250), the insurance pays 80%, and Latesha pays 20%.
3. **Total visit cost without insurance**: 15 visits × $60 = $900.
4. **Latesha pays first $250** (deductible): Remaining cost = $900 − $250 = $650.
5. **Latesha pays 20% of the remaining $650**: 0.20 × $650 = $130.
6. **Total cost for Latesha under the traditional plan**: $250 (deductible) + $130 (coinsurance) = **$380 per year**.

### 2. **HMO Plan**

- **Co-payment per visit**: $5 per visit.
- **Monthly premium deduction**: $15 per month.
- **Total visits per year**: 15 visits.

#### Steps to calculate:
1. **Co-payments**: 15 visits × $5 per visit = $75 per year.
2. **Monthly premium costs**: $15 per month × 12 months = $180 per year.
3. **Total cost for Latesha under the HMO plan**: $75 (co-payments) + $180 (premiums) = **$255 per year**.

### Comparison of Costs:
- **Traditional Plan**: Latesha will pay **$380 per year**.
- **HMO Plan**: Latesha will pay **$255 per year**.

### Advantages and Disadvantages:

#### Traditional Plan:
- **Advantages**:
  - Better suited for people who might have high medical expenses (e.g., surgeries, specialist visits, or hospitalizations) because it covers 80% of costs after the deductible is met.
  - Once the deductible is met, additional doctor visits will cost less.
  
- **Disadvantages**:
  - Higher costs for routine care (like doctor visits), especially for someone like Latesha who needs to see a doctor regularly.
  - The deductible ($250) means initial out-of-pocket expenses are higher before insurance kicks in.

#### HMO Plan:
- **Advantages**:
  - Lower overall costs for regular doctor visits and routine care.
  - Predictable expenses: $5 per visit and a fixed $15 monthly premium.
  
- **Disadvantages**:
  - Limited flexibility in choosing doctors, since HMOs typically require you to use doctors within their network.
  - May not cover specialist care as generously as a traditional plan.

### Conclusion:
For Latesha, based on her expected doctor visits (15 visits a year), the **HMO Plan** is the more cost-effective option at **$255 per year** compared to **$380 per year** under the traditional insurance plan. The HMO plan provides predictable costs and lower payments for regular doctor visits. However, if she anticipates needing more extensive medical care beyond routine visits, the traditional plan might provide better coverage in the long run.

Would you like more details or have any questions?

### Additional Related Questions:
1. What if Latesha's doctor visit costs were higher than $60? How would the comparison change?
2. How would the costs change if Latesha expects fewer doctor visits in a year?
3. What if Latesha needs to visit specialists often? How would that impact the comparison?
4. How do out-of-network costs compare between traditional insurance and an HMO?
5. What are some non-monetary factors Latesha should consider when choosing between these plans?

**Tip**: Always consider your anticipated healthcare needs when choosing between plans, and factor in both regular visits and potential unexpected medical expenses.

Explore a detailed cost comparison between a traditional health insurance plan and an HMO for Latesha Moore's doctor visits. This analysis includes step-by-step calculations of costs, including premiums, deductibles, and co-payments. Suitable for high school students learning about financial decision-making.

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