Question

Senator Bernie Sanders has introduced a “Medicare for all” bill in the U.S. Senate. Under his plan, government would pay 100% of the healthcare of all citizens in the U.S. This would effectively reduce the out-of-pocket price that people pay to zero. How would this plan differ from the current structure of Medicare? How would the Sanders bill create a “moral hazard” and affect the way people behave in the market for medical care services if it was passed by Congress and signed by the president? Would you support this type of health care plan? Why or why not?

Answer 1

Answer : Current Medicare structure is very expensive because drugs, required equipments etc. becomes developed day by day which provides the better quality medical services to people. For better medical services demand is high and high demand raise the price level. Thus medicare services becomes more expensive to people. But according to the question medicare services are free for all people in U.S. because total cost bears the government. Thus both medicare structures are different.

In case of moral hazard people takes more risks because people know that if risk create bad situation then the cost bears the other party like insurance. In the given question moral hazard is 100% free of cost medical services and there exists asymmetric information because people do not know about the quality of services . In this case people take risk because people know that after taking services if it is good then ok, there is no problem but if there occur exactly opposite condition then the total cost bears the government. In case of good quality services market demand for free medicare increase and demand decrease for bad quality medicare services.

I support this medicare service plan because this plan helps the poor people who have no maney to bear the expensive medicare cost and this increase the economic growth.