Medicaid is likely to result in incentives for recipients to consume medical services up to a point at which the marginal social cost of such services exceeds their marginal benefit.

Question

Quizplus · Accepted Answer

Medicaid typically covers most or all of the cost of medical services for its recipients, creating a potential incentive for them to consume more services than they would in a scenario where they paid some portion of the cost. This can lead to overutilization of medical services, which imposes a cost on society as a whole.

Medicaid Is Likely to Result in Incentives for Recipients to Consume