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Describe the benefits to society from purchasing insurance. Describe the costs. Define and discuss the welfare...

Describe the benefits to society from purchasing insurance. Describe the costs. Define and discuss the welfare gains from changes in insurance coverage

Solutions

Expert Solution

Benifits of purchasing Insurance:
? Insurance is important for both human life and nusiness environment.For the society it provides lot of benifits..
   - It provides employment opportunity
?    - Insurance provides income sources for housewives,retired people and students can work as a agent and earn money.
?    - Insurance provides security to insured for life and to his dependents..
? - It provides a sense of security
   - Insurance is an important risk of protection device for society.
      -Insurance companies provides funds for infrastructure development.
      -Most health insurance covers cost for pre and post hospitalization.
Cost of health insurance:
?    -In the USA the average health insurance cost 440dollar/month for individual 1,100 dollar for families,or 5,280 dollar and 13,200 dollar/year
? -Annual premiums reaches 18,764 dollar for 2017,up to 3% from 2015 for an average family coverage with worker on average paying 5,714dollar towards the cost of their coverage..
? -Those brought insurance on 2017,the average increase befor subsidies for 25%.
2018 health insurance premiums:
      - Average prices listed may not reveal lower costs or higher cost,so each individual must have a closer look at plans..
?    -The federal HHS-sponsored website will provide the list of price information
?    - Subsidies for annual income upto 400% of federal poverty calculated by those who enter their confidential financial information average cost of health insurance..
Average cost of health insurance:
? -Platinum plans offer the greatest amount coverage expected to cover 90% of all costs.
?    -According to the US department of health and human services,the average monthly health insurance cost around 328dollars.This data is based on silver health plan it does not include any subsidies..
?Welfare Gain:
   The economic welfare that is gained as as result of increasing or decreasing the production and consumption of goods or resources..
?    - The individual's optimal insurance policy therefore involves some degree of risk sharing or 'coinsurance'.
   - Welfare of health insurance tax exclusion as coming directly from excessive health insurance rather than from overconsumption of medical care that we account for the labor market effect of the tax exclusion on welfare..
    - The welfare gain is about 21% of current health insurance tax expenditures..
?    -Government tax expenditures would fall by 38%.
? - Health insurance spending would fall by 77% after the reform..
? - The moral hazard is generated by insurance income effects is efficient and welfare increasing.
? -Welfare gain from moral hazard was incorrectly deemed to generated welfare losses,and the value of health insurance increased more.This helps for price-payoff insurance and cost containment policies and strong justification for government in health insurance market..


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