The economic problem with Medicare financing is that
A) there is a built-in incentive to provide fewer services by doctors.
B) there is a built-in incentive to travel to Canada to receive medical services.
C) the cost of providing services is falling annually.
D) there is a built-in incentive to consume more services.

Question

Quizplus · Accepted Answer

The economic problem with Medicare financing is that it creates a moral hazard where there is a built-in incentive for beneficiaries to consume more services than necessary because the direct cost to them is reduced or eliminated, leading to higher overall costs for the system.

The Economic Problem with Medicare Financing Is That