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2. Calculate the claim cost for a CMM benefit, with a $1000 deductible, and 70% coinsurance until $2000 out of pocket expense occur, after which the benefit is 100%. Please use the following table of CMM product density function and do the calculation using spreadsheet. please calculate the claim cost if assuming that the total annual claim cost is increasing by inflation of 15%.

Deductible Coinsurance OOP Max. $1,000 80% $2.000 CLAIM PROBABILITY DISTRIBUTION Total Annual Claim After Annual 15% Frequency Inflation Total Annual Cost Sharing Total Annual Claim Net of Cost Sharing 0.2427147 0.0577487 0.0777254 0.0560329 0.0431136 0.0346984 0.0310039 0.0262755 0.0454931 0.0529088 0.0274789 0.0405641 0.0189421 0.0337392 0.0250294 0.0169892 0.0139880 0.0115576 0.0182536 0.0138810 0.0109021 0.0165984 0.0123575 0.0097235 0.0078673 0.0065782 0.0055410 0.0102227 0.0068908 0.0047749 0.0034577 0.0025728 0.0019800 0.0027794 0.0018782 0.0013323 0.0010029 0.0008171 0.0011843 0.0008109 0.0005222 0.0004097 0.0002809 0.0005598 On28 an Deductible Coinsurance OOP Max $1,000 80% $2,000 CLAIM PROBABILITY DISTRIBUTION Total Annual Claim After Annual 15% Frequency Inflation Total Annual Cost Sharing Total Annual Claim Net of Cost Sharing 0.0165984 0.0123575 0.0097235 0.0078673 0.0005782 0.0055410 0.010222 0.0068908 0.0047749 0.0034577 0.0025728 0.0019600 0.0027794 0.0018782 0.0013323 0.0010029 0.0008171 0.0011843 0.0008109 0.0005222 0.0004097 0.0002809 0.0005598 0.0002880 0.0001286 0.0000894 0.0000674 0.0000513 0.0000394 0.0000342 0.0000303 0.0000207 0.0000231 0.0000199 0.0000161 0.0000203 0.0000129 0.0000128 0.0000049 1.0000000 0.00 0.00 0.00 Deductible Coinsurance OOP Max. $1,000 80% $2.000 CLAIM PROBABILITY DISTRIBUTION Total Annual Claim After Annual 15% Frequency Inflation Total Annual Cost Sharing Total Annual Claim Net of Cost Sharing 0.2427147 0.0577487 0.0777254 0.0560329 0.0431136 0.0346984 0.0310039 0.0262755 0.0454931 0.0529088 0.0274789 0.0405641 0.0189421 0.0337392 0.0250294 0.0169892 0.0139880 0.0115576 0.0182536 0.0138810 0.0109021 0.0165984 0.0123575 0.0097235 0.0078673 0.0065782 0.0055410 0.0102227 0.0068908 0.0047749 0.0034577 0.0025728 0.0019800 0.0027794 0.0018782 0.0013323 0.0010029 0.0008171 0.0011843 0.0008109 0.0005222 0.0004097 0.0002809 0.0005598 On28 an Deductible Coinsurance OOP Max $1,000 80% $2,000 CLAIM PROBABILITY DISTRIBUTION Total Annual Claim After Annual 15% Frequency Inflation Total Annual Cost Sharing Total Annual Claim Net of Cost Sharing 0.0165984 0.0123575 0.0097235 0.0078673 0.0005782 0.0055410 0.010222 0.0068908 0.0047749 0.0034577 0.0025728 0.0019600 0.0027794 0.0018782 0.0013323 0.0010029 0.0008171 0.0011843 0.0008109 0.0005222 0.0004097 0.0002809 0.0005598 0.0002880 0.0001286 0.0000894 0.0000674 0.0000513 0.0000394 0.0000342 0.0000303 0.0000207 0.0000231 0.0000199 0.0000161 0.0000203 0.0000129 0.0000128 0.0000049 1.0000000 0.00 0.00 0.00

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