14. Chapter ma?pe09r, Section 22, Problem 025 (ID: 025.22 MANK09) People with hidden health problems are more likely to buy health insurance than are other people. This is an example of Ca. adverse selection and makes the cost of health insurance lower than otherwise. Ob. adverse selection and makes the cost of health insurance higher than otherwise. Oc. moral hazard and makes the cost of health insurance lower than otherwise. Od. moral hazard and makes the cost of health insurance higher than otherwise.
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- How can deductibles, copayments, and coinsurance reduce moral hazard?NO CHATGPT. In the US, private health insurance is usually purchased by groups rather than individuals. For example, most people are insured through their employer or their spouse’s employer. Which type of distortion does the insurance company need to worry about with individuals purchasing insurance versus groups? Why is group insurance preferable for the employer? Why is this preferable for the individual?Which of the following reports has the primary purpose lo inform an insurance company about a prospect's previous medical insurance history? A.Medical Information Bureau (MIB) B,Attending physician's stalement C.Inspection report D.Producer's report
- 12. True or False? Medicaid is a U.S. federal- and state- government-sponsored insurance program that provides insurance to people under age 65 whose incomes fall below a certain threshold (level). O True O False18. Which of the following best describes the major problems of health care in the U.S? O Poor results - U.S. lifespan is among the lowest of the high-income countries while infant mortality is among the highest. Both high costs and poor results in terms of life span and infant mortality. Lack of choice - there is only one U.S. health insurer, which is a regulated monopoly. High costs - the U.S. spends more on health care than any other country.In the RAND study, two plans had full coverage for spending within the hospital, but one had a $150 deductible for ambulatory care. Th e plan with the ambulatory care deductible had a lower probability of hospital admission (0.115) per year than did the plan with full coverage for everything (0.128), even though both plans covered hospital care fully. (See Table) What does this tell you about the use of hospital and ambulatory. Plan Admissionsper Year Inpatient Cost(1984 Dollars) C = 0 0.128 409 C=0.5 0.092 450 C=0.95 0.099 315 $150 individual deductible 0.115 373
- 7. Oster (2020) “Health Recommendations and Selection in Health Behaviors” which found that spurious links between health behaviours and good health outcomes can be self-reinforcing if individuals who engage follow the recommendation also engage in other positive health behaviours. a) Briefly describe in your own (layperson) words what this implies about false positive findings and null findings. b) Can you think of an example where the opposite is true? That is, individuals who follow the recommendation also engage in negative health behaviors. c) Suppose a medical examiner (coroner) is deciding the cause of death of a recently deceased patient. The patient overdosed and is unclear whether the overdose was accidental or intentional (i.e., suicide). The medical examiner remembers hearing on the news that morning that suicides have been rising in recent years. What does this imply about the likely cause of death the medical examiner will record on the death certificate? What does this…Preventive care is not always cost-effective. Suppose that it costs $100 per person to administer a screening exam for a particular disease. Also suppose that if the screening exam finds the disease, the early detection given by the exam will avert $1,000 of costly future treatment. a. Imagine giving the screening test to 100 people. How much will it cost to give those 100 tests? Imagine a case in which 15 percent of those receiving the screening exam test positive. How much in future costly treatments will be averted? How much is saved by setting up a screening system? b. Imagine that everything is the same as in part a except that now only 5 percent of those receiving the screening exam test positive. In this case, how much in future costly treatments will be averted? How much is lost by setting up a screening system?1. Fun with cost-sharing. An important distinction in health insurance is between the list price (PL) and out-of-pocket price (PP) of a medical good or service. The list price is the official price that the provider charges the insurance company, while the out-of-pocket price is the price that the insurance customer faces. Sometimes, the out-of-pocket price depends on the list price. a. Suppose a consumer’s demand for a particular medical procedure is Q = 100 − PP. Draw her demand curve in PL–Q space under the assumption of no insurance and label it D1. You will have to think about the relationship between PL and PP to draw it correctly. b. Now assume the same consumer is fully insured. Think about how this affects the relationship between PL and PP and draw a full-insurance demand curve in PL– Q space. Label this curve D2. c. Finally, assume the consumer is part of a partial insurance plan with a copayment provision. Her insurance pays all expenses above and beyond her copayment of…
- An important distinction in health insurance is between the list price (PL) and out-of-pocket price (PP) of a medical good or service. The list priceis the official price that the provider charges the insurance company, while the outof- pocket price is the price that the insurance customer faces. Sometimes, the out-ofpocket price depends on the list price.a. Draw a set of axes with list price PL on the y-axis and quantity Q on the x-axis (you will want to make your graph nice and big, because you will be adding several demand curves).b. Suppose a consumer’s demand for a particular medical procedure is Q=100−PP. Draw her demand curve in PL–Q space under the assumption of no insurance and label it D1. You will have to think about the relationship between PL and PP to draw it correctly.c. Now assume the same consumer is fully insured. Think about how this affects the relationship between PL and PP and draw a full-insurance demand curve in PL–Q space. Label this curve D2.d. Now assume the…Jenny believes that the unwillingness to buy insurance by young healthy people creates a moral hazard problem for health insurance companies. Diego disagrees, and believes that their unwillingness to buy health insurance creates an adverse selection problem. Who is right? Explain._____ is when everyone in a country is covered by insurance that is run and administered by the government. This strategy is effective at combatting _____. a. Means tested health insurance; adverse selection b. Universal public health insurance; adverse selection c. Universal public health insurance; moral hazard d. Compulsory insurance; moral hazard e. Compulsory insurance; monopoly pricing f. Means tested health insurance; moral hazard