Deck 10: Government and the Market for Health Care

Question 1

In the United States,universal health care is administered by

A)the federal government.
B)state governments.
C)private insurance companies.
D)hospitals.
E)none of the above.

Answer 1

none of the above.

Question 2

Refer to Figure 10.3,expenditures as a percent of GDP fell dramatically in the 1980s.

Answer 2

False

Question 3

The highest percentage of uses of health care funds in the US for 2004 was

A)research.
B)hospital care.
C)home health care.
D)nursing home care.

Answer 3

hospital care.

Question 4

Private health insurance pays for what percentage of health care expenditures?

A)0
B)5
C)40
D)35

Question 5

Part C of Medicare allows eligible individuals to have health care coverage up to $100,000 annually.

Question 6

A catastrophic insurance policy is one which

A)has cats causing health crises.
B)insurance policy that has a high deductible.
C)generous coverage for high medical costs.
D)a & c
E)b & c

Question 7

__________ account(s)for the largest portion of public health expenditure in the United States.

A)Children's hospitals
B)Universal health coverage
C)Medicaid
D)Medicare

Question 8

The __________ level of government accounts for the largest share of health care spending.

A)regional
B)state
C)municipal
D)federal

Question 9

HI (Hospital Insurance)is financed by a payroll tax,while SMI (Supplementary Medical Insurance)is financed out of general revenues.

Question 10

Generally,managed care means

A)health care is provided by teams,not by an individual doctor.
B)limits are placed on utilization of health care services.
C)health care is provided by the government to all citizens.
D)doctors pick which patients they want to see.

Question 11

Under federal tax law,employer?provided health insurance is not subject to taxation.

Question 12

The prescription drug benefit plan was added to Medicare in

A)2006
B)1996
C)1965
D)1944

Question 13

In 1980,26 million people in the US were over the age of 65.What is the amount currently?

A)34 million
B)35 million
C)36 million
D)37 million

Question 14

How many elderly people are covered by Medicare?

A)one third
B)one half
C)almost all
D)almost none

Question 15

The Medicaid program provides health insurance for the

A)elderly.
B)poor.
C)veterans of wars.
D)slow.

Question 16

There are two forms of health care provided by the government: _________ is provided for the poor,and _________ is provided for the elderly.

A)HMO;Medicare
B)PMI;HMO
C)Medicaid;Medicare
D)Medicare;Medicaid
E)SSI;Medicare

Question 17

At any given time,about 95% of the population in the United States lacks health insurance.

Question 18

What was the percentage of GDP that was expended,in total,on health care?

A)0.132%
B)12%
C)13.2%
D)16%

Question 19

What does job lock mean?

A)A tendency for workers to remain in their jobs to keep their insurance coverage
B)A job where a time clock is used
C)A job that provides insurance coverage only after several years of employment
D)all of the above

Question 20

US health care spending amounts to_____ per year.

A)$7.8 billion
B)$1.1 million
C)$2.2 trillion
D)$4.4 trillion

Question 21

Suppose that the quantity demanded of visits to a doctor per year is given by X = 12 - 0.05P,where X is the number of visits and P is the price the patient pays for a visit.
(a)How many visits would the patient make if he or she had to pay the full price of a visit,$100?
(b)How many visits would a patient make if he or she was insured and had to pay only a 15% co-insurance payment per visit?
(c)How many visits would the patient make if medical services were free?

Question 22

Suppose that the demand for medical services can be characterized by the equation P = 100 - Q.Suppose further that the supply of health services can be characterized by the equation P = Q + 50.
(a)What is the equilibrium quantity and price in the market for health services?
(b)In an effort to make health services more affordable,the government restricts the price of health services to be no greater than $65.What will happen to the quantity of health services in the market?

Question 23

What do you feel would be the effect of a mandate that requires all people to purchase health insurance?

Question 24

The idea of a Health Savings Account (HSA)was enacted in 2003.What do you think are its main strengths?

Question 25

Due to moral hazard,the goal of providing security is likely to conflict with the goal of efficiency.

Question 26

Suppose that the demand curve D_m for medical services can be characterized by the equation M = 2000 - P,where M is the amount of medical services received per year and P is the price.Suppose further that P₀ is constant at 800.
(a)Find the equilibrium quantity of services at P₀.
(b)Find the equilibrium quantity of services when there is only a co-payment of 20% required such that the price is 0.2P₀.
(c)How much additional expenditures induced by insurance are created?

Question 27

Refer to figure 10.5 in your text.What would be the impact on the three categories of people if they were given the value of medical insurance in cash instead of having it provided?

Question 28

The "Connector" is a new medical device that helps with breathing.

Question 29

The health care system currently in place will be dramatically changed in the next four years.

A) True
B) False
C) Uncertain

Question 30

With the aging of the American population,it might be necessary to reduce the medical benefits to elderly.How do you feel about this idea?

Question 31

Medicare requires individuals to take a standard health test first,but Medicaid does not.