Growth in the share of health-care expenditures covered by third parties (for example, insurance or government programs) will
A) place downward pressure on the prices of health-care services.
B) reduce the incentive of suppliers to provide consumers with health-care services at a low cost.
C) make consumers more sensitive to the price of health-care services.
D) make it easier to control the growth of health-care expenditures.

Question

Quizplus · Accepted Answer

When third parties cover more health-care costs, suppliers have less incentive to keep prices low since consumers are less sensitive to costs they don't directly pay.

Growth in the Share of Health-Care Expenditures Covered by Third