What do you anticipate would happen

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Question - You are a new manager of a medium-size firm which currently offers health insurance to its workers (it is part of the benefits package so there is no opting-in or out). Under the current package, the firm pays 50% of all healthcare expenses. Last year, the firm paid out $450,000 in reimbursements and the workers (collectively) paid out $450,000 (for a total bill of $900,000). 

Required - What do you anticipate would happen if you were to decrease the generosity of the health insurance plan to cover 40% (instead of 50%) with your workers paying 60%? More specifically, what would you expect to happen to:

(i) your total costs,

(ii) the total costs borne by workers, and

(iii) total healthcare expenses. Be as specific as possible and make sure to spell out your assumptions.

Reference no: EM132954273

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