Exam 7: The Economics of Health Care

One reason why adverse selection problems arise in health insurance markets is that

How can improvements in health increase a country's total income?

How can changes over time of the average height of the people in a country help to indicate the standard of living in a country?

If a fire insurance company requires firms buying fire insurance to install automatic sprinkler systems,the insurance company is trying to reduce

Some economists have proposed making the tax treatment of employer-provided health insurance the same as the tax treatment of individually purchased health insurance and out-of-pocket health care spending.Such changes would make it more likely that

Why might a young,healthy person choose not to buy health insurance?

The cost of group health insurance is lower than if an individual buys a policy on his own because

In a market with positive externalities,the market equilibrium price will be less than the efficient equilibrium price.

In the United States,doctors and hospitals that provide most health care are

Health insurance companies impose deductibles on policies and co-payments on claims

The Congressional Budget Office estimates that the Patient Protection and Affordable Care Act (ACA)will

The Congressional Budget Office estimates that the payments to settle malpractice lawsuits and the premiums doctors pay for malpractice insurance account for ________ of health care costs in the United States.

Vaccinations tend to result in a positive externality.

Article Summary Administrative overhead costs resulting from insurance companies handling reimbursement claims is in large part the reason that health care in the United States is much more expensive than in other countries. An analysis on the administration costs of health care in the United States found that roughly 30 percent of the costs of health care are administrative and that more than 25 percent of health-sector employees work in administration. Health insurance companies are often paid a fixed percentage of the claims they administer, which gives them little to no impetus to increase efficiency and keep costs down. Source: Jeffrey Pfeffer, "The Reason Health Care Is So Expensive: Insurance Companies," Bloomberg Businessweek, April 10, 2013. -Refer to the Article Summary.Even if insurance companies were more efficient and brought administrative costs down,consumers would still pay less than the full cost of medical treatment.This would result in the market equilibrium price of medical services being ________ than the efficient equilibrium price,and the market equilibrium quantity of medical services being ________ than the efficient equilibrium quantity.

Based on the current rate of growth,health care spending as a percentage of GDP through Medicare,Medicaid,and other U.S.government programs is expected to

When people who buy insurance change their behavior after the purchase because they are protected from loss by the insurance,the insurance market is said to face the problem of

In the United States from 1981 to 2011,deaths from diabetes increased largely due to the effects of

Briefly describe are the 6 main provisions of the Patient Protection and Affordable Care Act (ACA)?

Due to adverse selection,very few lemons will be sold in the market for used cars.

For many small firms,providing health insurance for their workers