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Updated on: 24 Mar 2025, 14:35
Originally posted by MartyMurray on 23 Feb 2025, 19:49.
Last edited by MartyMurray on 24 Mar 2025, 14:35, edited 2 times in total.
Last edited by MartyMurray on 24 Mar 2025, 14:35, edited 2 times in total.
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B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
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Question Stats:
20% (02:08) correct
80%
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wrong
based on 82
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Under a company's health plan, all of an individual’s healthcare costs for a given year up to $1,200 must be paid by the individual. Then, of the individual’s costs over $1,200 and up to $3,700, 40% are paid by the individual, and 60% are paid by the company, and the company covers all of the individual’s costs for the year above $3,700. If individual Q was covered by the company’s plan last year, what was the total cost of individual Q’s healthcare last year?
(1) Individual Q paid $2,200 for healthcare last year.
(2) The company paid 59% of individual Q’s healthcare costs last year.
(1) Individual Q paid $2,200 for healthcare last year.
(2) The company paid 59% of individual Q’s healthcare costs last year.
25 Feb 2025, 15:10
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Hi Mr. MartyMurray, please help me to understand why is not possible to solve the problem with (1)
If I know that Q paid $2,200 in that year I could get the equation: 2,200 = 1,200 + 40%E, where E is the extra cost, and since E = 2,500 it would be in the range <1,200 to 3,700>, where am I wrong?
For (2), my logic is since I know the portion that was covered by the company I will be able to determine the point beetween the full convered part and the partial covered part , so this is suff. is it correct?
If I know that Q paid $2,200 in that year I could get the equation: 2,200 = 1,200 + 40%E, where E is the extra cost, and since E = 2,500 it would be in the range <1,200 to 3,700>, where am I wrong?
For (2), my logic is since I know the portion that was covered by the company I will be able to determine the point beetween the full convered part and the partial covered part , so this is suff. is it correct?
25 Feb 2025, 15:56
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Under a company's health plan, all of an individual’s healthcare costs for a given year up to $1,200 must be paid by the individual. Then, of the individual’s costs over $1,200 and up to $3,700, 40% are paid by the individual, and 60% are paid by the company, and the company covers all of the individual’s costs for the year above $3,700. If individual Q was covered by the company’s plan last year, what was the total cost of individual Q’s healthcare last year?
Reading the passage, we can see the following:
all of an individual’s costs for a given year up to $1,200 must be paid by the individual
So, if an individual pays $1,200 or less, then all of the costs have been paid by the individual.
of the individual’s costs over $1,200 and up to $3,700, 40% are paid by the individual, and 60% are paid by the company
So, the individual pays 40% of costs that could equal up to $3,700 - $1,200 = $2,500.
40% of $2,500 is $1000.
Thus, the maximum an individual could pay is $1,200 + $1,000 = $2,200.
(1) Individual Q paid $2,200 for healthcare last year.
We have seen above that $2,200 is the maximum an individual could pay.
In other words, an individual would pay that amount if the total costs were equal to or greater than $3,700.
So, for example, the total cost could have been $3,700 or $10,000, and individual Q would still have paid $2,200.
Thus, this statement indicates only that individual Q's costs were at least $3,700, but they could have been higher.
Insufficient.
(2) The company paid 59% of individual Q’s healthcare costs last year.
The information in the passage indicates that the company pays 0% of of the individual's costs up to $1,200 and 60% of the individual's costs over $1,200 and up to $3,700.
We can quickly estimate the average percentage paid by the company if the individual's costs are $3,700 as follows:
1,200 is about 1/3 of 3,700. So, the company pays 60% of about 2/3 of the costs up to $3,700, or about 40% of the costs up to $3,700.
We see that, if the company paid 59% of individual Q's costs last year, the total cost must have been over $3,700.
Thus, we could calculate the total cost in the following way:
.59C = (C - 3700) + .60(3,700 - 1,200)
We don't have to actually do the math to see that the information that the company paid 59% is sufficient for determining the total cost.
Sufficient.
Correct answer: B
Reading the passage, we can see the following:
all of an individual’s costs for a given year up to $1,200 must be paid by the individual
So, if an individual pays $1,200 or less, then all of the costs have been paid by the individual.
of the individual’s costs over $1,200 and up to $3,700, 40% are paid by the individual, and 60% are paid by the company
So, the individual pays 40% of costs that could equal up to $3,700 - $1,200 = $2,500.
40% of $2,500 is $1000.
Thus, the maximum an individual could pay is $1,200 + $1,000 = $2,200.
(1) Individual Q paid $2,200 for healthcare last year.
We have seen above that $2,200 is the maximum an individual could pay.
In other words, an individual would pay that amount if the total costs were equal to or greater than $3,700.
So, for example, the total cost could have been $3,700 or $10,000, and individual Q would still have paid $2,200.
Thus, this statement indicates only that individual Q's costs were at least $3,700, but they could have been higher.
Insufficient.
(2) The company paid 59% of individual Q’s healthcare costs last year.
The information in the passage indicates that the company pays 0% of of the individual's costs up to $1,200 and 60% of the individual's costs over $1,200 and up to $3,700.
We can quickly estimate the average percentage paid by the company if the individual's costs are $3,700 as follows:
1,200 is about 1/3 of 3,700. So, the company pays 60% of about 2/3 of the costs up to $3,700, or about 40% of the costs up to $3,700.
We see that, if the company paid 59% of individual Q's costs last year, the total cost must have been over $3,700.
Thus, we could calculate the total cost in the following way:
.59C = (C - 3700) + .60(3,700 - 1,200)
We don't have to actually do the math to see that the information that the company paid 59% is sufficient for determining the total cost.
Sufficient.
Correct answer: B
