Question

the health care system

a. What are the benefits of health insurance to individuals? Does this vary depending on whether the health event is predictable? Expensive?

b. Explain why the fact that the employer contribution to health insurance premiums is not taxed provides a larger subsidy to some employees rather than others.3

c. You have very generous health insurance. It covers everything health care professionals (it is first dollar coverage). Why might this lead to moral hazard on the part of the patient? What form does this moral hazard take?

d. Your employer decides the plan you have is too expensive and terminates it. Your new plan no longer covers all your health expenses. Instead, you have to pay 10% of the cost of your healthcare. Does this help with the moral hazard in part c and why or why not?

e. You are advising your state’s governor on whether to expand Medicaid as part of healthcare reform. Using at least 2 supporting pieces of evidence, tell her what to do

Answer 1

A