Question

In: Economics

Mark each of the following statements as True or False and provide a one or two...

Mark each of the following statements as True or False and provide a one or two sentence explanation for your answer.

_______ 1. The Beveridge model uses queues or waiting lists to ration care, rather than prices.

_______ 2. Queuing is never optimal because it increases wait times and provides no associated benefit.

_______ 3. Adverse selection is a downside of the Beveridge model.

_______ 4. The Beveridge Model reduces moral hazard by having a universal, single payer system.

________ 5. There are no out-of-pocket costs (i.e., coinsurance, copayments, deductibles, etc.) for patients being treated in the Beverage system, at least for most types of care.

________ 6. Sickness funds in Bismarck health care systems are publicly administered and financed

________ 7. The Bismarck Model in Germany emphasizes equity over choice.

________ 8. Patients in Bismarck health care systems are charged premiums based on their risk rating.

________ 9.   Bismarck nations tend to have higher national health care expenditures than Beveridge countries.

_______ 10. Even though it is illegal for sickness funds to deny coverage to individuals, insurers still often engage in risk selection.

Solutions

Expert Solution

1. True. Longer queues are supposed to deter those who dont truly need care. This way, care is supposed to be given to only those who truly need it and not those who have the most money.

2. False. It does provide benefit in terms of care rationing, as discussed above.

3. False. Since Beveridge model provides care to all without extra cost, adverse selection where only sick people will take insurance is not an issue.

4. False. Moral hazard is when people indulge in risky behavior knowing someone else is paying costs. Since the Beveridge system is universal and free for all, moral hazard is present.

5. True. Very few cases such as prescription drugs, eye care etc require payment by the person him/herself.

6. False. The funds are based on payroll taxes but administered by the central government.

7. False. Patients are free to such as which hospital to visit etc. Those who are willing to pay can avail better care.

8. False. Funds are prohibited from charging premium based on risk.

9. True.

10. True.


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