As a part-time employee, Rachel does not qualify for any benefits from her current employer. Seeing a need for a health care pro
gram, Rachel went shopping for health insurance and is trying to decide between two options with a national health insurance provider. The benefits of each option are outlined in the tables below. OPTION 1: Fee-for-service OPTION 2: HMO $225 monthly premium $630 monthly premium $7,500 deductible No annual deductible Co-pays: Co-pays: Name-brand Drugs: $30 Name-brand Drugs: $25 Generic Drugs: $12 Generic Drugs $10 Visits: Visits: Primary Care Physician $30 Primary Care Physician $20 Specialist: $75 Specialist: $62 Urgent Care: $100 Urgent Care: $50 Emergency Room: $250 Emergency Room: $175 The first option is a fee-for-service plan with a $7,500 deductible. Rachel must pay the deductible amount in health-related costs (not including co-pays) before the insurance company will contribute. This plan costs $225.00 per month and requires co-pays for most standard healthcare costs. The second option is an HMO. It is significantly more expensive at $630 per month, but has no annual deductible. The standard co-pays are also less than those in the other option. Rachel is a young lady with very few health care requirements. She anticipates one monthly visit to her primary care physician, and one annual visit to her allergy specialist. She has two generic prescription allergy medicines that need to be filled twice a month. If Rachel is able to stay healthy the entire year and does not accrue any additional health care costs, which of the following statements is true for her situation? a. The higher co-pays and annual deductible make Option 1 more expensive than Option 2. b. The higher premium for Option 2 offsets the lower co-pays making the two options the same value. c. Rachel's health care needs will cost less under Option 1 if she is able to avoid additional health care costs. d. Even though she pays more monthly, the insurance company will cover more of Rachel's health care costs under option 2.
Corner Hardware has succeeded in increasing the number of goods it sells while holding the amount of inventory on hand, cost per unit, and the selling price per unit at a constant level.
This situation will be reflected in the firm's financial ratios in the form of a decrease in the day's sales inventory.
