Increasing medical costs have created a financial crisis among insurance companies that provide medical benefits program

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Increasing Medical Costs Have Created A Financial Crisis Among Insurance Companies That Provide Medical Benefits Program 1 (67.57 KiB) Viewed 23 times

Increasing medical costs have created a financial crisis among insurance companies that provide medical benefits programs to major corporations. In an attempt to measure the cost of medical benefits to its employees, the personal manager of a California-based manufacturing company randomly surveyed the records of n=64 employees and recorded the medical insurance claims by each chosen employee for the previous 12 months. The result of this survey revealed an average total claim of $964 with standard deviation of $147. a. Estimate u the average annual medical claim per employee and place a 95% bound on the error of estimation b. The insurance carrier for the California-based manufacturing company has informed corporate officials that coverage will be continued only if it can be shown that the average employee claim does not exceed $900. Based on the above information what do you conclude? Test by using a = 0.05.