Question 1

Which of the following is TRUE regarding uninsured individuals in the United States,on average?

Accepted Answer

Uninsured individuals in the United States, on average, have lower-than-average incomes.

Question 2

Retrospective reimbursement generally:

Accepted Answer

Retrospective reimbursement means that providers are paid after services are delivered, based on the costs incurred. This system often leads to little incentive for providers to economize or reduce costs, as they are reimbursed for the expenses they report.

Question 3

Which of the following is a reason the high number of uninsured may be a problem?

Accepted Answer

When individuals are uninsured and cannot afford to pay for medical care, they may receive uncompensated care from hospitals and health care providers. The cost of this uncompensated care is often shifted to insured patients, leading to higher health care costs overall. This can be a significant problem for individuals who are already struggling to pay for health care expenses.

Question 4

A person with health insurance who pays 80% of the cost of all medical services consumes:

Accepted Answer

When a person pays only 20% of the cost of medical services due to health insurance coverage, the marginal cost to them is lower than the actual cost. This lower personal cost can lead to consumption of more medical services than is socially optimal, as the individual does not bear the full cost of their consumption.

Question 5

Most recipients of Medicaid are ____________; most of the costs of Medicaid are associated with benefits received by _____________.

Accepted Answer

According to data from the Kaiser Family Foundation, as of 2019, about two-thirds of Medicaid beneficiaries are low-income women and children, while only about 7% are elderly individuals. Additionally, the largest category of Medicaid expenditures is for services provided to low-income individuals with disabilities, followed by spending on the elderly. Therefore, choice B is the correct answer.

Question 6

Suppose that you want to estimate how health insurance affects the mobility rate of workers.Which of the following is a problem with identifying this effect when you compare the mobility rate of those who have insurance with that of those who do not have insurance?

Accepted Answer

The problem with comparing the mobility rate of those who have insurance with that of those who do not have insurance is that the jobs that offer health insurance may be better in other ways (e.g.,pension plans or vacation). So, it is difficult to attribute any differences in mobility rate solely to the presence or absence of health insurance.

Question 7

Suppose that your friend applies for private insurance and resents the number of questions asked on the application.He states that since the primary contribution of insurance companies is to pool the risk of many individuals,they should care less about the characteristics of any one applicant and more about increasing the number of the patients that they insure.Furthermore,he states,when he had insurance through his employer,he hardly had to answer any questions.Use economic reasoning to explain to your friend the insurance company's behavior.

Accepted Answer

The answer of Suppose that your friend applies for private...

Question 8

As the case of McAllen,TX,shows,there are significant differences in spending under Medicare across health referral regions (HRRs).Which factor primarily explains these differences?

Accepted Answer

Higher utilization of health services in some areas than others is the primary factor that explains the differences in spending under Medicare across HRRs, as observed in the case of McAllen, TX. This could be due to various reasons such as higher availability of medical resources, less conservative practice patterns, or patient demand for more services. Differences in sickness rates, quality of care, and fee schedules could also contribute to some extent, but they are comparatively less significant factors.

Question 9

According to the notion that flat-of-the-curve medicine is practiced in the United States,which of the following best describes the marginal health benefit from the next dollar of medical spending?

Accepted Answer

Flat-of-the-curve medicine suggests that there is a point beyond which additional spending on healthcare does not significantly improve health outcomes, suggesting that the marginal health benefit from the next dollar of medical spending decreases as more is spent on healthcare. Therefore, option A is the correct choice.

Question 10

Suppose that you break your arm and incur your first medical expense ($2,000)of the year.Which of the following is consistent with having an insurance plan that provides first-dollar coverage?

Accepted Answer

First-dollar coverage means that the insurance company pays the entire bill for the first dollar of medical expenses incurred. Therefore, option B is the correct choice. Options A, C, and D all involve the insured paying some portion of the bill, which is not consistent with first-dollar coverage.

Question 11

What are the five fundamental reasons that government may care about the number of uninsured? Discuss.

Accepted Answer

The answer of What are the five fundamental reasons that...

Question 12

If there are moral hazards associated with health insurance,then why not eliminate health insurance entirely and have individuals pay the full cost of their health care?

Accepted Answer

The answer of If there are moral hazards associated with...

Question 13

Which elasticity of demand with respect to health care would have the highest deadweight loss of insurance coverage,all other things equal?

Accepted Answer

The answer of Which elasticity of demand with respect to...

Question 14

The unwillingness to move to a better job for fear of losing health insurance is referred to as ________ and results from being ___________.

Accepted Answer

Job lock refers to the phenomenon where individuals are unwilling to leave their current job, even if a better opportunity comes along, because they do not want to lose their employer-provided health insurance. This is a result of being insured through one's employer. Moral hazard refers to the increased risk-taking behavior that individuals may exhibit when they have insurance coverage. Uninsured individuals cannot experience job lock, as they do not have health insurance through their employer. First-dollar coverage refers to insurance plans that cover all healthcare costs without a deductible or copayment.

Question 15

Retrospective reimbursement provides financial incentives for _______ medical care; prospective reimbursement provides financial incentives for _______ medical care.

Accepted Answer

The answer of Retrospective reimbursement provides financial incentives for _______...

Question 16

Suppose that a healthy individual has worked for 10 years in Medicare-covered employment.At what age can this individual start receiving Medicare?

Accepted Answer

Medicare eligibility generally starts at age 65, regardless of employment history or income level. However, individuals with certain disabilities may qualify for Medicare before age 65.

Question 17

Which of the following health insurance policies is most likely to lead to the optimal consumption of health care services?

Accepted Answer

The policy with a $5,000 deductible and 0% copayment is most likely to lead to the optimal consumption of health care services. This is because the high deductible will discourage people from seeking unnecessary medical care, but once the deductible is met, the 0% copayment will encourage people to seek necessary care without financial barriers. Additionally, the high deductible may motivate people to take better care of their health in order to avoid high out-of-pocket costs. The other policies either have no financial barriers to care (Option B) or have lower copayments that may encourage overutilization of services (Option A and C).

Question 18

If you have a health insurance policy with a $500 deductible,a $30 copayment for visits to the doctor (doctor's fee is $60/visit),and 5% coinsurance on covered expenses (excluding doctor's visits),how much of your health insurance expenses would the insurer pay if you went to the doctor twice and had a surgery that cost $1,500?

Accepted Answer

The answer of If you have a health insurance policy...

Question 19

For which of the following events is the consumption-smoothing benefit from first-dollar coverage small?

Accepted Answer

The consumption-smoothing benefit from first-dollar coverage is small for predictable events because individuals can plan and save for these expenses in advance, reducing the need for insurance to smooth consumption.

Question 20

The main difference between retrospective reimbursement and prospective reimbursement is that retrospective reimbursement creates incentives for ________ care and prospective reimbursement creates incentives for ________ care.

Accepted Answer

Retrospective reimbursement pays providers after the services have been delivered, often based on the costs incurred, which can incentivize providers to deliver more services than might be medically necessary. Prospective reimbursement pays a predetermined amount for a particular service or episode of care, regardless of the actual costs incurred, which can incentivize providers to limit care to stay within budget.

Quiz 15: Health Insurance I- Health Economics and Private Health Insurance

Which of the following is TRUE regarding uninsured individuals in the United States,on average?

Retrospective reimbursement generally:

Which of the following is a reason the high number of uninsured may be a problem?

A person with health insurance who pays 80% of the cost of all medical services consumes:

Most recipients of Medicaid are ; most of the costs of Medicaid are associated with benefits received by _.

Suppose that you want to estimate how health insurance affects the mobility rate of workers.Which of the following is a problem with identifying this effect when you compare the mobility rate of those who have insurance with that of those who do not have insurance?

As the case of McAllen,TX,shows,there are significant differences in spending under Medicare across health referral regions (HRRs) .Which factor primarily explains these differences?

According to the notion that flat-of-the-curve medicine is practiced in the United States,which of the following best describes the marginal health benefit from the next dollar of medical spending?

Suppose that you break your arm and incur your first medical expense ($2,000) of the year.Which of the following is consistent with having an insurance plan that provides first-dollar coverage?

What are the five fundamental reasons that government may care about the number of uninsured? Discuss.

If there are moral hazards associated with health insurance,then why not eliminate health insurance entirely and have individuals pay the full cost of their health care?

Which elasticity of demand with respect to health care would have the highest deadweight loss of insurance coverage,all other things equal?

The unwillingness to move to a better job for fear of losing health insurance is referred to as and results from being ___.

Retrospective reimbursement provides financial incentives for _ medical care; prospective reimbursement provides financial incentives for _ medical care.

Suppose that a healthy individual has worked for 10 years in Medicare-covered employment.At what age can this individual start receiving Medicare?

Which of the following health insurance policies is most likely to lead to the optimal consumption of health care services?

For which of the following events is the consumption-smoothing benefit from first-dollar coverage small?

The main difference between retrospective reimbursement and prospective reimbursement is that retrospective reimbursement creates incentives for care and prospective reimbursement creates incentives for care.