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?

Question

Quizplus · Accepted Answer

The system of third-party payment (where insurance companies or government programs pay for healthcare services) often leads to a situation where the marginal social cost of healthcare exceeds its marginal social benefit. This is because consumers (patients) are insulated from the true cost of healthcare services, leading to overconsumption and higher prices.

The System of Third-Party Payment for Medical Care in the United