 Personal finance practice problem using OneNote. Health insurance payment comparison calculation. Prepare to get financially fit by practicing personal finance. You're not required, but if you have access to OneNote, would like to follow along with the icon left-hand side, practice problems tab and the 9020 health insurance payment comparison tab. Also take a look the immersive reader tool, practice problems typically in the text area too with the same name, same number, but with transcripts. Transcripts that can be translated into multiple currencies either listened to or read in them. Informations on the left-hand side, we will be imagining two different health insurance policies and how they might differ in terms of the payout for a particular claim. So the first policy pays percent of physical therapy costs after deductible 70%. The deductible is at the $400. So we have this concept of the deductible. Remember, it's a little bit different possibly than other kinds of insurance where it might be a little bit more complex for the medical insurance because with other kinds of insurance like property insurance, we might think that the deductible is the amount that we would have to pay on the claim and then over and above that would be paid possibly by the insurance company a hundred percent up to some cap, for example. When we're talking about the health insurance, then typically we might have to clear the deductible the amount that we would pay and then we still pay a percentage above the deductible possibly insurance company paying a percent and then we might have some max cap and out-of-pocket cap over and above that. So then we have the HMO. Now remember, we're gonna do a calculation in terms of the cost for the payment. This is not the only thing to be considering when you're comparing different kinds of insurance plans. Remember that the HMO has some more restrictions possibly with terms of or in terms of the network that you'll be working within the structure that's a little bit more rigid in terms of how you're gonna go from one place to the other having one doctor kind of direct you. So you wanna keep that in mind as well when you're making these kind of comparisons. But we got the HMO policy where we have a cost per visit for the physical therapy type of calculation which is set through kind of the network and by the network at the $30. So we've got the number of visits we're gonna imagine under both of these kind of terms is gonna be 12 and then we have the cost. The cost is gonna be $80 per visit. So we can imagine that if we're trying to decide between two different policies, this is some of the calculations that you might try to put into consideration as one factor that you can take into consideration amongst many. So we're gonna say health insurance policy, we got the cost. It's always a good idea to practice putting this together and I would practice these in Excel, practice putting your tables together, really good tools for that or practice problems for them. Number of visits. So we're gonna say 12 visits and we're gonna say they cost $80 per visit. So that would mean that we have the total cost of $960. So then we're gonna say that there is a deductible on this first item. So we've gotta clear the deductible before the insurance company kicks in. So we'll put the $400 here and that means that we have 560, 960 minus the 400 over and above the deductible. These are the costs over the deductible. So then we have the percent page by the individual. Now we can think about this two different ways. We're gonna say, okay, that means we're gonna, 70% is paid by the insurance company. So we could calculate how much is paid by the insurance company. Or we can think about it as, well, the insurance company is gonna pay 70%. That means we're gonna be paying one or 100% minus the 70%. So the amount that we pay out of pocket then 100 minus 70 would be the 30%. So then we're gonna say that we've got the 560 times the 30%. Also note how we did like a little indentation calculation, having another subcategory indenting, pulling it out to the outer column, just in terms of formatting. This formatting looks tedious, looks like what, it doesn't matter, but it can really make things a little bit easier when you're formatting your tables, especially when you get into more complex problems, good practice to just think about the formatting that you're setting up, practice putting them in Excel is good as well. So 560 times 30 would be the personal cost after the deductible 168, and then we would also have to pay the deductible. So we're gonna pay the deductible of the 400, and then we're also gonna have to pay the 168, which is 30% of the amount above the deductible, the 400 plus the 168 would be the 568. Now note that if you were doing this in Excel and you wanted to populate your Excel so that you could draw the information from the left-hand side and adjust your assumptions on the left-hand side and have your table calculated properly, we might have to deal with the fact or a circumstance in which the amount of payments that we have here comes out to something less than the deductible. So let's say we had less payment, less visits up top or the cost was less, and this amount came out to be like $300. Well, then when we get the cost less deductible, we want it to cap here at zero. We don't want it or have a minimum of zero. We don't want it to go below zero. So that's one practice we can do. We could use like a logic function, an if function to calculate that. I won't go into that in detail here, but we do that in Excel if you wanna practice on that. And then down here, when we said we're gonna be paying the amount up to the deductible, well, if I cleared the deductible, then we're gonna pay the full deductible. But if this amount was less than the deductible, we would take the lesser of basically these two numbers, which again, we can do in Excel with like a men function, for example, to help us with that calculation, good practice in Excel if you wanna go over that in Excel. Now the HMO is much more straightforward here because they've got their in-network costs. So the cost per visit is just gonna be, we're gonna say $30. So they kinda worked it out on an in-network type of basis because it's all the network system, possibly being able to work out the flat rate to the $30. And so then we're gonna say the number of visits is gonna be 12 and that would come out to the 360. So obviously we could see a substantial difference in terms of the amount being paid out of the pockets for the visits at the 568 minus the 360 at the 208 and the difference. Now, this isn't the only thing to take into consideration. There's just one way that you might think about how you're gonna calculate these two. You also wanna think about the flexibility of the policies and basically how much you're paying for the coverage of the policy, how much the premiums of the policy are. So it's more complicated than that to just to do the comparison, but this is one way you might think about them or when you're looking at different people that have different health insurance plans, you might hear different terminology in terms of how they're calculating or how they're thinking of their insurance company making the payments. Again, we work these in Excel. These are great practice problems to put together and work on your tables and visualizing your tables, work on your formatting in Excel, put in some logic functions, some functions other than just some function and practice those tools.