Question

Name and describe four forms of government intervention in markets. Provide one example of each intervention in health insurance or health care markets.

Answer 1

The first form of the government intervention is the regulation brought in by the government in the market. It makes the different players in the market to comply with the laws. The second form of government regulation is taxation and subsidies in the market. The government uses it to make the firms to produce a socially optimal level of output in the economy. The third form of government intervention is setting up provisions and funding in the market. It is used to help the consumers and the government makes provisions to offer benefits to the people who are the related to the scheme. The fourth form of intervention is setting up price floor and price ceiling to redistribute the welfare between the different players. Setting up minimum wages and fixing the price of the particular good at a level is the example of price control intervention.
Regarding the health care market, the government has put different forms of the intervention in the market.
An example of the regulation as intervention is American Healthcare Act that is a Federal regulation and is applied to employers and employees as per the provisions. Example of subsidies and taxation benefits is the tax benefits given to the employers, R&D firms or the Pharmaceutical companies to keep the prices at an affordable level. The example of provision and funding is the running of Medicare and Medicaid programs that are run for the benefits of the specific class of people and are funded by the government. Federal funding also takes place to research work in the field of Healthcare. The example of price control mechanism is the fixation of the modalities to charge the price of heath care delivery that is not more focussed upon the quality and result. Further, putting a control on the price of the health care product, also come under this type of the intervention.