Consider the following coinsurance structure of a drug plan for workers There i s an initial $2295 out of pocket deductible before insurance began to…

Consider the following coinsurance structure of a drug plan for workers

 There i s an initial $2295 out of pocket deductible before insurance began to pay anything..

 Between $2295 and $22700 in total costs,, the coinsurance rate i s 25%%..

 After $22700 in total costs,, coinsurance rates increase to 100%%,,

 Once out of pocket costs reach $44350,, the coinsurance rate f a ll s to 5%%..

Use the se specifics of the pr escription drug plan and graph a senior’s out of pocket expenses for prescription drugs (hhorizontal axis)) versus the total expenditures on prescription drugs (vvertical ax is)).. Explain if the structure of this cost sharing arrangements make sense from an economic point of view??  

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