Suppose a study of 196 randomly sampled privately insured adults with incomes more than 200% of the current poverty level is to be used to measure out- of-pocket medical expenses for prescription drugs for this income class. The sample data are in the file Drug Expenses.
a. Based on the sample data, construct a 95% confidence interval estimate for the mean annual out-of-pocket expenditures on prescription drugs for this income class. Interpret this interval.
b. The study’s authors hope to use the information to make recommendations concerning insurance reimbursement guidelines and patient copayment recommendations. If the margin of error calculated in part a is considered to be too large for this purpose, what options are available to the study’s authors?