Question
3. TRUE/FALSE When selecting a medical plan, the premium is less if the plan has a low deductible and a low maximum out-of-pocket. True (1) False
Answer
4
(263 Votes)
Ulysses
Elite · Tutor for 8 years
Answer
### False
Explanation
## Step1: Define the Terms### A premium is the amount paid periodically to an insurance company for a health plan. A deductible is the amount paid out-of-pocket by the policyholder before the insurance company starts covering expenses. The maximum out-of-pocket is the most a policyholder will have to pay for covered services in a plan year.## Step2: Analyze the Relationship### Typically, insurance plans with lower deductibles and lower maximum out-of-pocket costs have higher premiums. This is because the insurance company assumes more risk and thus charges more to cover potential expenses.## Step3: Conclusion### Given the typical structure of insurance plans, the statement that the premium is less if the plan has a low deductible and a low maximum out-of-pocket is false.