Health Care Premiums. Use the following information for Exercises 69–71. The National Conference of State Legislatures reports that the mean annual premium for employer-sponsored family health insurance coverage was $16,351 in 2014. A random sample of 100 such families showed a mean annual premium of $17,251. Assume σ=$5000.
71. Test whether the population mean annual premium is greater than $16,351 using level of significance α=0.01. Compare your conclusion with the conclusion in Exercise 70. Suggest two possible methods to resolve this contradiction.
9.3.71
H0:μ=16,351 vs. Ha:μ>16,351. We will reject H0 if the p-value≤α=0.01. Zdata=1.8. p-value=0.0359. The p-value=0.0359 is not ≤0.01. Therefore we do not reject H0. There is insufficient evidence at level of significance α=0.01 that the population mean annual premium for employer-sponsored family health insurance coverage has increased from $16,351. Turn to a direct assessment of the strength of evidence against the null hypothesis or obtain more data.