Under the current structure of Medicare, economic theory indicates that the movement of the baby boom generation into the retirement phase of life during the years following 2011 will
A) reduce the share of healthcare services paid for by a third party.
B) push both healthcare prices and expenditures upward.
C) increase the incentive of suppliers to provide healthcare services at a low cost.
D) increase the incentive of consumers to economize on their use of healthcare.

Question

Quizplus · Accepted Answer

As the baby boom generation moves into retirement, there will be an increase in demand for healthcare services, which will likely cause healthcare prices and expenditures to rise. This is due to the basic economic principle of supply and demand, as increased demand leads to higher prices.

Under the Current Structure of Medicare, Economic Theory Indicates That