Deck 9: Government and Health Care

Question 1

Exclusion of employer-provided health insurance to employees is an indirect subsidy to private provision of health insurance.

Answer 1

True

Question 2

Healthcare expenditures in the U.S. are projected to be 20% of GDP by 2020.

Answer 2

True

Question 3

Third-party payments for health care services increase the quantity of health care demanded by reducing out-of-pocket costs to patients.

Answer 3

True

Question 4

Most of the medical bills of Americans in the United States are paid by:

A) the patients.
B) private and government health insurance.
C) charities.
D) Medicaid.

Question 5

Asymmetric information in the market for health care occurs when sellers of medical care are better informed about cost and quality of care than buyers.

Question 6

Individuals in the United States, on average, pay 50 percent of their health care costs out-of-pocket, and the remaining 50 percent is paid by insurance, governments, and charity.

Question 7

Since 1960, expenditures on health care as a percent of GDP has:

A) been cut in half.
B) nearly tripled.
C) remained the same.
D) doubled.

Question 8

Approximately 18 percent of GDP was allocated to provision of health care in the United States as of 2010.

Question 9

Government spending on health care is declining as a percent of total government spending.

Question 10

In the United States the government pays the health bills of 90 percent of the population.

Question 11

A risk averse individual prefers to pay certain modest costs in exchange for possible unforeseen high costs.

Question 12

Half of Americans do not have health insurance coverage.

Question 13

Asymmetric information can occur when the provider of a service is better informed than the consumer of the service.

Question 14

Medicare is a government program of health insurance for the elderly.

Question 15

An increase in coinsurance and deductibles for health insurance can contribute to a reduction in expenditures on health care.

Question 16

Under national health insurance in Great Britain, the price system is used to ration health care.

Question 17

The American system of health care is financed by a mix of private and government insurance programs that pay over 80 percent of the health care bills for U.S. citizens.

Question 18

Spending per person on health care in the United States is less than in the United Kingdom where national health insurance finances health expenditures.

Question 19

Medicaid costs are paid entirely by the federal government.

Question 20

Because of third-party payment for services in the market for health care, the price paid by buyers is less than the payment sellers receive, and the marginal social cost of health care exceeds its mar?ginal social benefit.

Question 21

Which of the following is true about the Medicare program in the United States?

A) It is only available to those who pass a means test.
B) It is available to all citizens over the age of 65.
C) The costs are completely financed by fees paid by insurees.
D) It places no limits on reimbursement to medical care providers.

Question 22

Which is not reason for escalating healthcare costs in the U.S.?

A) Increase in malpractice insurance.
B) Cross-subsidization of patients who cannot pay for healthcare or insurance.
C) Overuse of new technology.
D) Both b and c.

Question 23

What would be the effect of having no health insurance available?

A) The quantity of healthcare would be set at where the marginal benefit and marginal cost are equal.
B) Excess demand for healthcare would be the result because the quantity supplied would be at a level where the marginal benefit exceeds the marginal cost.
C) Excess supply for healthcare would be the result because the quantity supplied would be at a level where the marginal benefit would be below the marginal cost.
D) the quantity of healthcare would be at an inefficient level.

Question 24

A third-party payment system for health care:

A) results because of externalities in the production of health care services.
B) encourages more than the efficient amount of resources to be allocated to health care.
C) encourages patients and health care providers to economize on the use of health care resources.
D) means that patients pay the full price for health care services they consume.

Question 25

The government program that provides the health insurance to the poor in the United States is called:

A) national health insurance.
B) Medicare.
C) Medicaid.
D) employer-provided health insurance.

Question 26

Which of the following is true about the Medicaid program in the United States?

A) It is a program of health insurance for the elderly.
B) Its costs are paid entirely by the federal government.
C) It is a program of health insurance for the poor.
D) Its costs have been declining in recent years.

Question 27

Discuss the system of finance for health care services that has evolved in the United States. Be sure to discuss the role of government in the system and the share of health care costs currently paid for by governments and financed by taxes.

Question 28

Which of the following subsidizes private provision of health insurance?

A) Medicare
B) Medicaid
C) the Public Health Service
D) tax exclusion of the value of employer-provided health insurance to workers

Question 29

What is the moral hazard associated with third party payment for health services?

A) The recipient of the service is not as informed as the provider of the service.
B) The recipient of services tends to decline more services than they should.
C) The recipient of services tends to have more services than what is needed relative to the efficient level of services.
D) There is no moral hazard.

Question 30

Which of the following could help decrease the rate of increase of spending on health care in the United States?

A) a reduction in the deductibles on private health insurance policies
B) an increase in the coinsurance rate on health insurance and subjecting a larger volume of ser?vices to coinsurance
C) extension of Medicaid insurance to all persons who are poor
D) a reduction in the coinsurance rate on health insurance and subjecting a smaller volume of ser?vices to coinsurance

Question 31

The percent of total health care costs in the United States paid for by governments is approximately:

A) 90 percent.
B) 45 percent.
C) 25 percent.
D) 10 percent.

Question 32

Which of the following services is typically not covered under private health insurance and Medicare in the United States?

A) treatment for heart attack
B) surgery
C) office visits to physicians
D) long-term care services

Question 33

Which of the following programs accounts for the greatest amount of government expenditures on public health in the United States?

A) Medicare
B) worker's compensation
C) the Public Health Service
D) medical research

Question 34

In the United States, individuals pay approximately what percent of the cost of their medical care directly to providers?

A) 100 percent
B) 50 percent
C) 15 percent
D) zero

Question 35

The system of third-party payment for medical care in the United States has which of the following effects in the market for health care?

A) It improves efficiency in the market.
B) It causes the marginal social benefit of health care to exceed its marginal social cost.
C) It causes the marginal social cost of health care to exceed its marginal social benefit.
D) It results in less than the efficient quantity of health care services.

Question 36

If the quantity of healthcare is more than the efficient quantity, what is the consequence?

A) Some will not have access to healthcare that would have access at the efficient level.
B) The healthcare will suffer in quality.
C) Capital could be more efficiently spent elsewhere leading to less overall productivity.
D) Lower marginal costs and marginal benefits.

Question 37

Under national health insurance as operated in Great Britain,

A) the British system pays fees equal to half of the costs of services provided to them.
B) general practice physicians are paid on a per-patient rather than on a per-unit-of-service basis.
C) patients requiring surgery can pick their surgeons and can usually obtain the surgery in a matter of days, even if it is not an emergency.
D) there are no government limits on health care spending by hospitals.

Question 38

Which of the following is an example of the "moral hazard of health insurance"?

A) an increase in the number of surgeries prescribed for benign prostate disease beyond the point at which the marginal benefit equals the marginal cost
B) a decreased willingness of individuals to go to the doctor for minor ailments because of increases in coinsurance rates
C) an underallocation of resources to medical care because of monopoly power of hospitals
D) experience rating of health insurance groups by health insurers

Question 39

The elderly are what proportion of beneficiaries of Medicare?

A) 95%
B) 85%
C) 77%
D) 70%