Exam 7: The Economics of Health Care

Economists John Cogan, Glenn Hubbard, and Daniel Kessler have estimated that repealing the tax preference for employer-provided health insurance would

How do current tax laws in the United States favor employer-based health care insurance?

Regarding the Patient Protection and Affordable Care Act (ACA),

What is an externality? Explain how someone receiving a meningitis vaccination is an example of an externality in the market for health care.

In the United States, doctors and hospitals that provide most health care are

Figure 7-2 Figure 7-2 represents the market for medical services with and without insurance, and the effect of a third-party payer system on the demand for medical services. -Refer to Figure 7-2.The efficient price of medical services is

In the United States from 1981 to 2015, deaths from diabetes increased largely due to the effects of

Article Summary An Organisation for Economic Co-operation and Development (OECD) report states that administration costs for health care in the United States are the highest in the developed world, accounting for over 8 percent of spending in the health care sector, compared to a global average of about 3 percent. According to the report, expensive surgeries, high pharmaceutical costs, and corrupt practices increased global health care costs, and poor coordination between health care providers, duplication of tasks, and excessive time spent on paperwork all contributed to higher administrative costs. The report also noted that administrative costs are generally lower under government-managed health care systems than with private insurance, but governments could still significantly cut spending and improve patients' health. Source: Alanna Petroff, "U.S. health care admin costs are double the average," money.cnn.com, January 11 2017. -Refer to the Article Summary.The article discusses the high administrative costs of health care in the United States.Even if private insurance companies were more efficient and brought administrative costs down, consumers would still pay less than the full cost of medical treatment.This would result in the market equilibrium price of medical services being ________ than the efficient equilibrium price, and the market equilibrium quantity of medical services being ________ than the efficient equilibrium quantity.

Why might a young, healthy person choose not to buy health insurance?

In the United States in 2016, over 90 percent of people without health insurance were below the age of 35.

If a fire insurance company requires firms buying fire insurance to install automatic sprinkler systems, the insurance company is trying to reduce

The number of people receiving Medicare coverage is expected to ________ by the year 2025.

In the United States, private health insurance companies

Based on its current rate of growth, health care spending as a percentage of GDP through Medicare, Medicaid, and other U.S.government programs is expected to

The Pre-Existing Condition Insurance Plan is a federally administered part of the Affordable Care Act, and is designed for people with pre-existing medical conditions to obtain insurance.By offering health insurance to all U.S.citizens with pre-existing medical conditions, the Pre-Existing Condition Insurance Plan eliminates ________ for both the insurer and the insured, and eliminates ________ for the issuer of the insurance policy.

An insurance company is likely to attract customers like Clancy, who wants to purchase insurance because he knows better than the company that he is more likely to make a claim on a policy.What is the term used to describe the situation above?

In the United States in 2016, the percentage of people that directly purchased an individual or family health insurance policy from an insurance company was about

Figure 7-1 Figure 7-1 represents the market for vaccinations. Vaccinations are considered a benefit to society, and the figure shows both the marginal private benefit and the marginal social benefit from vaccinations. -Refer to Figure 7-1.At the market equilibrium,

In the principal-agent relationship, the agent is

In the United States, consumers usually pay ________ than the true cost of medical treatment because of ________.