d. Suppose the cost of the healthcare insurance subsidy is divided evenly among those who can fully afford the healthcare insurance premium. What do you calculate will be the total amount per person that these individuals will need to pay for their healthcare insurance premium and their contribution to the subsidy fund? Show how you found your answer. Also fill in the following table to consolidate your work in this problem. Individual Income Available Amount of Healthcare Additional Total to be spent on subsidy required Insurance charge per Payment per health insurance in order for the Premium (what person to cover person for (this is related to individual to be the individual healthcare Healthcare total gross income able to afford paid for subsidy costs Insurance of the individual) the healthcare healthcare (includes insurance insurance) premium as premium for the well as any year share of subsidy cost) Joe $10,000 Mary $10,000 Sue $10,000 Mabel $20,000 Clyde $20,000 Sylvester $60,000 Owen $100,000 Abigail $100,000 Samantha $100,000 Cletus $100,000 Answer: Our earlier work indicated that the healthcare insurance premium is $25,000 per person. Now, we also need to collect $55,000 to cover the cost of the subsidy for lower income individuals. There are 5 people who can fully fund their health insurance and now they will also need to fund the fund for the subsidy. So, ($55,000/5 people) gives us $11,000 per person. So, for these five people they will need to contribute $25,000 + $11,000 or $36,000 each in order for the healthcare fund to have sufficient funds to cover healthcare costs as well as the costs of the subsidies for low income individuals. Here is the completed table: notice that if you sum the last column you do get $250,000, which is the total amount of dollars that must be collected in order to provide healthcare to everyone in this country for the year. Individual Income Available Amount of Healthcare Additional Total to be spent on subsidy required Insurance charge per Payment per health insurance in order for the Premium (what person to cover person for (this is related to individual to be the individual healthcare Healthcare total gross income able to afford paid for their subsidy costs Insurance of the individual) the healthcare healthcare (includes insurance insurance) premium as well as any
d. Suppose the cost of the healthcare insurance subsidy is divided evenly among those who can fully afford the healthcare insurance premium. What do you calculate will be the total amount per person that these individuals will need to pay for their healthcare insurance premium and their contribution to the subsidy fund? Show how you found your answer. Also fill in the following table to consolidate your work in this problem. Individual Income Available to be spent on health insurance (this is related to total gross income of the individual) Amount of subsidy required in order for the individual to be able to afford the healthcare insurance premium for the year Healthcare Insurance Premium (what the individual paid for healthcare insurance) Additional charge per person to cover healthcare subsidy costs Total Payment per person for Healthcare Insurance (includes premium as well as any share of subsidy cost) Joe $10,000 Mary $10,000 Sue $10,000 Mabel $20,000 Clyde $20,000 Sylvester $60,000 Owen $100,000 Abigail $100,000 Samantha $100,000 Cletus $100,000 Answer: Our earlier work indicated that the healthcare insurance premium is $25,000 per person. Now, we also need to collect $55,000 to cover the cost of the subsidy for lower income individuals. There are 5 people who can fully fund their health insurance and now they will also need to fund the fund for the subsidy. So, ($55,000/5 people) gives us $11,000 per person. So, for these five people they will need to contribute $25,000 + $11,000 or $36,000 each in order for the healthcare fund to have sufficient funds to cover healthcare costs as well as the costs of the subsidies for low income individuals. Here is the completed table: notice that if you sum the last column you do get $250,000, which is the total amount of dollars that must be collected in order to provide healthcare to everyone in this country for the year. Individual Income Available to be spent on health insurance (this is related to total gross income of the individual) Amount of subsidy required in order for the individual to be able to afford the healthcare insurance Healthcare Insurance Premium (what the individual paid for their healthcare insurance) Additional charge per person to cover healthcare subsidy costs Total Payment per person for Healthcare Insurance (includes premium as well as any
answerstohomework4fall2013.docx