1. How different would this calculation look for a worker who earned $500,000 and lived in Vermont? This worker would face a state income tax rate of 9.5 percent and a federal income tax rate of 35 percent. 2. Suppose that your employer offered you $4,000 in cash instead of health insurance coverage. Health insurance is excluded from state income taxes and federal income taxes. (To keep the problem simple, we will ignore Social Security and Medicare taxes.) The cash would be subject to state income taxes (8 percent) and federal income taxes (28 percent). How much would your after-tax income go up if you took the cash rather than the insurance? 3. Your firm offers only a PPO with a large deductible, high coinsurance, and a limited network. You pay $400 per month for single coverage. Some of your employees have been urging you to offer a more generous plan. Who would you expect to choose the more generous plan and pay any extra premium? 4. A surgeon charges $2,400 for hernia surgery. He contracts with an insurer that allows a fee of $800. Patients pay 20 percent of the allowed fee. How much does the insurer pay? How much does the patient pay? 5. You have incurred a medical bill of $10,000. Your plan has a deductible of $1,000 and coinsurance of 20 percent. How much of this bill will you have to pay directly? 6. Why do employers provide health insurance coverage to their employees? 7. A radiology firm charges $2,000 per exam. An insurers allowed fee is 80 percent of charges. Its beneficiaries pay 25 percent of the allowed fee. How much does the insurer pay? How much does the beneficiary pay?