Question 1

In most circumstances,employees do not pay taxes on the value of health insurance their employers provide them.

Accepted Answer

This is because the cost of employer-provided health insurance is excluded from employees' taxable income under federal law.

Question 2

The rising cost of malpractice insurance is one of the leading causes of the increase in health care spending as a percentage of GDP in the United States.

Accepted Answer

While malpractice insurance costs are a concern for healthcare providers, they are not a leading cause of the increase in healthcare spending as a percentage of GDP in the United States. Factors such as an aging population, increasing chronic disease rates, and the high cost of medical technology and pharmaceuticals are some of the main reasons for the rise in healthcare spending.

Question 3

Under the Patient Protection and Affordable Care Act (ACA),insurance companies will be required to participate in a high-risk pool that will cover individuals with pre-existing medical conditions.

Accepted Answer

The ACA does indeed require insurance companies to participate in a high-risk pool to cover individuals with pre-existing medical conditions. This was a key component of the law's efforts to expand access to health insurance coverage.

Question 4

About ________ of pharmaceutical patents are issued to U.S.firms.

Accepted Answer

Two-thirds of pharmaceutical patents are issued to U.S. firms.

Question 5

If consumers paid the full price of medical services instead of using health insurance and third-party payers to cover part of the cost,the quantity of medical services provided would increase.

Accepted Answer

If consumers paid the full price of medical services, they may be more hesitant to seek medical care for minor issues or for preventative care. This would likely result in a decrease in the quantity of medical services provided.

Question 6

Most employees ________ on the value of health insurance provided by employers,and most people ________ when buying individual health insurance policies.

Accepted Answer

The answer of Most employees ________ on the value of...

Question 7

Article Summary
The Center for Medicare and Medicaid Services (CMS)projects that between 2014 and 2022,over $2.7 trillion will be spent for private insurance overhead and administering government health programs,including more than $270 billion in new administrative costs for the Affordable Care Act,which averages to $1,375 per newly insured person every year,or almost one-quarter of the total federal government expenditures for the program.Government programs account for over $100 billion of the increase in overhead,and most of that will go to private Medicaid HMOs,which will account for 59 percent of total Medicaid administrative costs in 2022.
-Refer to the Article Summary.The article discusses the rising administrative costs of health care.Even if private insurance companies were more efficient and brought administrative costs down,consumers would ________ the full cost of medical treatment.This would result in the market equilibrium price and quantity of medical services being ________ than the efficient equilibrium price and quantity.

Accepted Answer

The answer of Article Summary
The Center for Medicare and Medicaid...

Question 8

"Cost disease" refers to the tendency for low productivity in the service sector to lead to higher costs in those industries.

Accepted Answer

"Cost disease" is a commonly recognized phenomenon in economics, and it refers to the fact that industries with low productivity growth over time (such as healthcare, education, and other service industries) tend to experience higher costs and prices relative to other sectors where productivity has grown more quickly. This is due in part to the fact that wages in these industries tend to rise over time to keep pace with other industries, despite the fact that productivity and efficiency may not be improving at the same rate. As a result, these industries may require more resources and funding to deliver the same output or level of service, leading to higher costs for consumers and businesses.

Question 9

About ________ of research on new medicines is carried out in the United States.

Accepted Answer

According to the Pharmaceutical Research and Manufacturers of America, about two-thirds of research on new medicines is carried out in the United States.

Question 10

The Congressional Budget Office estimates that the additional taxes and fees enacted under the ACA will be enough to pay for the plan and reduce the federal government's budget deficit.

Accepted Answer

The answer of The Congressional Budget Office estimates that the...

Question 11

Those who favor changes in the market for health care that would make it more like the markets for other goods and services are generally in favor of universal health care coverage.

Accepted Answer

Those who favor changes in the market for health care that would make it more like the markets for other goods and services are not necessarily in favor of universal health care coverage. They may argue for increasing competition among insurers, reducing regulations, and allowing consumers to purchase health insurance across state lines, among other market-oriented reforms.

Question 12

Since 1960,out-of-pocket spending on health care has increased sharply as a fraction of all health care spending.

Accepted Answer

The answer of Since 1960,out-of-pocket spending on health care has...

Question 13

Lower deductibles for employer-provided health care will tend to shift the ________ curve for medical services to the ________.

Accepted Answer

Lower deductibles reduce the out-of-pocket costs for consumers, making medical services more affordable and increasing the willingness to pay for those services. As a result, the demand for medical services will increase, shifting the demand curve to the right.

Question 14

Replacing employment-based health care with a government-run system could reduce employers payments for their workers insurance,but the amount that they would have to pay in overall compensation

Accepted Answer

Replacing employment-based health care with a government-run system might shift the form of compensation (from health insurance to possibly higher wages or other benefits) but the overall compensation cost to employers would likely remain essentially unchanged. Employers would still need to offer competitive compensation packages to attract and retain employees.

Question 15

Economists John Cogan,Glenn Hubbard,and Daniel Kessler have estimated that ________ the tax preference for employer-provided health insurance would reduce spending by people enrolled in these programs by 33 percent.

Accepted Answer

Repealing the tax preference for employer-provided health insurance would reduce spending by people enrolled in these programs by 33 percent, according to the economists.

Question 16

By 2015,spending on federal health care programs such as Medicare and Medicaid had grown to 6 percent of GDP.

Accepted Answer

According to the Centers for Medicare and Medicaid Services, in 2015, spending on federal health care programs such as Medicare and Medicaid was 6 percent of GDP.

Question 17

A decrease in the availability of lower-cost drugs will tend to shift the ________ curve for medical services to the ________.

Accepted Answer

The answer of A decrease in the availability of lower-cost...

Question 18

Under the Patient Protection and Affordable Care Act (ACA),residents who do not have health insurance will not be allowed to seek employment.

Accepted Answer

The Patient Protection and Affordable Care Act (ACA) does not prohibit residents without health insurance from seeking employment. However, it does require individuals to either have health insurance or pay a penalty tax.

Question 19

A goal of ________ is to give patients an incentive to pay more attention to the prices of medical services.This would tend to increase economic efficiency by decreasing the costs of medical services

Accepted Answer

Market-based reforms of the health care system aim to increase economic efficiency by introducing competition and giving patients an incentive to pay more attention to the prices of medical services. This would discourage overuse of medical resources and help control the costs of medical services. The Patient Protection and Affordable Care Act (ACA) does include provisions to improve pricing transparency, but it is not the primary goal of the law. Government-provided health care and socialized medicine do not rely on market forces to allocate resources and control costs.

Question 20

The individual mandate provision of the ACA requires

Accepted Answer

The individual mandate provision of the ACA requires every U.S. resident to have health insurance. This is to ensure that everyone has access to healthcare and to prevent people from waiting until they are sick to purchase health insurance, which drives up costs for everyone.

Quiz 7: The Economics of Health Care