Question 1

Real expenditures on Medicare and Medicaid

Accepted Answer

D

Question 2

Which of the following is true?

Accepted Answer

Healthcare in Canada and most of the European countries is socialized, meaning it is publicly funded and managed by the government. This does not eliminate the problem of scarcity in the healthcare industry, as resources are still limited and there may be waiting times for certain procedures. The high-income countries of Europe provide healthcare free of charge, but there may be limitations on the amount of healthcare a citizen can receive.

Question 3

Economic theory indicates that the growth of subsidies to healthcare consumers and accompanying expansion in third-party payments will

Accepted Answer

According to economic theory, when subsidies to healthcare consumers and third-party payments increase, the demand for healthcare services increases, which leads to higher healthcare prices. This is known as the "moral hazard" problem, where consumers tend to use or demand more healthcare services than they would if they had to pay out-of-pocket. Additionally, when third-party payers are involved, such as insurance companies or the government, providers may be incentivized to charge higher prices because they know the payer will cover most or all of the cost.

Question 4

Does it make any difference whether health-care expenditures are paid for by the consumer or by a third party (the government or an insurance company,for example)?

Accepted Answer

When consumers of health care services are paying for the service with their own money, they will have a stronger incentive to economize and make cost-conscious decisions about their health care. If a third party is paying for the service, consumers may be less likely to consider cost when making health care decisions. This can lead to increased health care utilization and higher costs overall.

Question 5

If a third party pays a larger and larger share of the purchasing price of a good,economic theory indicates that

Accepted Answer

The answer of If a third party pays a larger...

Question 6

The growth of third-party payments (payments by insurers and the government)of healthcare services during the last four decades has been accompanied by

Accepted Answer

The growth of third-party payments has not led to a reduction in healthcare expenditures as a share of the economy, nor has it increased the incentive for suppliers to provide healthcare services at a low cost. Instead, it has been accompanied by persistent increases in healthcare prices and rapid growth in total healthcare expenditures. Additionally, third-party payments can insulate consumers from the full cost of healthcare services, leading to decreased sensitivity to prices.

Question 7

Given the current structure of health-care finance,which of the following is most likely to occur when the baby boom generation begins to retire and the elderly population increases rapidly during the years following 2010?

Accepted Answer

The baby boom generation reaching retirement age and the increase in the elderly population will likely lead to a higher demand for healthcare services. Additionally, with a larger population eligible for Medicare, real expenditures on the program and taxes to finance it will likely increase, rather than decline. Therefore, it is likely that the health-care inflation and spending growth of recent decades will continue or even accelerate.

Question 8

During the last four decades,the share of health-care expenditures paid for by third parties (either the government or insurance companies)

Accepted Answer

According to the information given, the share of healthcare expenditures paid for by third parties (government or insurance companies) increased from approximately 45% in 1960 to over 85% in 2007.

Question 9

Which of the following is true?

Accepted Answer

The answer of Which of the following is true?
...

Question 10

Which of the following grew rapidly during the years following the passage of the Medicare and Medicaid programs?

Accepted Answer

The passage of Medicare and Medicaid programs allowed for more third party financing of healthcare expenditures, which led to increased prices of healthcare relative to other goods and services, and ultimately led to higher expenditures on healthcare as a share of the economy. Therefore, all of the above statements are true.

Question 11

As third-party payments and government expenditures on healthcare increased following the passage of Medicare and Medicaid,

Accepted Answer

Third-party payments and government expenditures on healthcare created a situation where consumers were not directly paying for their healthcare services, leading to an increase in demand for services and the prices of those services. Additionally, with increased government funding for healthcare, suppliers were less incentivized to lower their costs, leading to an overall increase in both prices and total expenditures on healthcare services.

Question 12

Which of the following is fully tax deductible (it is either subtracted or excluded from taxable income)under the current tax system of the United States?

Accepted Answer

The answer of Which of the following is fully tax...

Question 13

Third-party payments by either the government or an insurance company accounted for ____ of the 2009 healthcare expenditures,compared to ____ paid by third parties in 1960.

Accepted Answer

The passage states that third-party payments accounted for 86 percent of healthcare expenditures in 2009, compared to 45 percent paid by third parties in 1960. Therefore, choice C is the correct answer.

Question 14

What percentage of U.S.healthcare expenditures is currently paid for by a third party,either the government or an insurance company?

Accepted Answer

According to a report by the Centers for Medicare & Medicaid Services (CMS), as of 2019, 85% of U.S. healthcare expenditures are paid for by third-party payers, which include the government and private insurance companies.

Question 15

Economic analysis indicates that the increasing government expenditures and growth of third-party payments accompanying the Medicare and Medicaid programs

Accepted Answer

The increasing government expenditures and growth of third-party payments accompanying the Medicare and Medicaid programs reduced the incentive of consumers to economize on their use of healthcare. This is because when healthcare expenses are paid for by a third party, patients do not feel the direct impact of the cost of their care, leading to increased demand and utilization of healthcare services. As a result, healthcare providers are often incentivized to increase their prices, leading to higher overall healthcare costs.

Question 16

As the share of healthcare expenditures paid for by third parties has grown,both healthcare prices and total expenditures have increased rapidly.Is this surprising?

Accepted Answer

Third-party payments, such as insurance, reduce the out-of-pocket costs for healthcare consumers, which weakens their incentive to economize on healthcare services. Providers are then able to charge higher prices, and the overall demand for healthcare services increases, leading to rapid growth in both prices and total expenditures. Therefore, the rapid growth of expenditures in this scenario is an expected result rather than a surprising one.

Question 17

A 2.9 percent payroll tax (1.45 percent levied on both the employee and the employer)imposed on current workers is used to finance the

Accepted Answer

The 2.9 percent payroll tax is used to finance the hospitalization costs of Medicare beneficiaries. While Medicaid is a joint federal-state program that provides healthcare for low-income individuals, it is funded through a combination of federal and state funds, not the payroll tax. The payroll tax also does not directly finance physician services or healthcare costs for the poor, only for Medicare beneficiaries.

Question 18

Why is the current U.S.tax-treatment of health insurance purchased through one's employer discriminatory?

Accepted Answer

The current U.S. tax-treatment of health insurance purchased through one's employer is discriminatory because it allows the cost of employer-provided health insurance to be excluded from taxable income, while the direct purchase of health insurance is not tax deductible. This means that people who purchase health insurance through their employer receive preferential tax treatment over those who purchase it directly, creating a disparity in the tax treatment of health insurance. This also means that self-employed individuals, who are not eligible for employer-provided health insurance, are disadvantaged by having to pay for health insurance with after-tax dollars.

Question 19

Which of the following grew rapidly after the passage of the Medicare and Medicaid programs in the mid-1960s?

Accepted Answer

The answer of Which of the following grew rapidly after...

Question 20

When health insurance is purchased primarily through one's employer,

Accepted Answer

The answer of When health insurance is purchased primarily through...

Quiz 37: The Economics of Healthcare

Real expenditures on Medicare and Medicaid

Which of the following is true?

Economic theory indicates that the growth of subsidies to healthcare consumers and accompanying expansion in third-party payments will

Does it make any difference whether health-care expenditures are paid for by the consumer or by a third party (the government or an insurance company,for example) ?

If a third party pays a larger and larger share of the purchasing price of a good,economic theory indicates that

The growth of third-party payments (payments by insurers and the government) of healthcare services during the last four decades has been accompanied by

Given the current structure of health-care finance,which of the following is most likely to occur when the baby boom generation begins to retire and the elderly population increases rapidly during the years following 2010?

During the last four decades,the share of health-care expenditures paid for by third parties (either the government or insurance companies)

Which of the following is true?

Which of the following grew rapidly during the years following the passage of the Medicare and Medicaid programs?

As third-party payments and government expenditures on healthcare increased following the passage of Medicare and Medicaid,

Which of the following is fully tax deductible (it is either subtracted or excluded from taxable income) under the current tax system of the United States?

Third-party payments by either the government or an insurance company accounted for of the 2009 healthcare expenditures,compared to paid by third parties in 1960.

What percentage of U.S.healthcare expenditures is currently paid for by a third party,either the government or an insurance company?

Economic analysis indicates that the increasing government expenditures and growth of third-party payments accompanying the Medicare and Medicaid programs

As the share of healthcare expenditures paid for by third parties has grown,both healthcare prices and total expenditures have increased rapidly.Is this surprising?

A 2.9 percent payroll tax (1.45 percent levied on both the employee and the employer) imposed on current workers is used to finance the

Why is the current U.S.tax-treatment of health insurance purchased through one's employer discriminatory?

Which of the following grew rapidly after the passage of the Medicare and Medicaid programs in the mid-1960s?

When health insurance is purchased primarily through one's employer,