Question

1. It is also important to know that not all health providers accept Medicaid. Why do you think this is the case?

2. In your opinion, do you think that political self-interest and lobbying leads to bad regulations in government? Why? Why not?   ( In The public interest theory and the special interest theory of government intervention )

Answer 1

1 Not all health providers accept Medicaid because lower reimbursement is the main cause. There is raising payments results in added costs for strapped budgets. One likely reason fewer doctors accept Medicaid patients is that those claims are paid at a lower rate than other insurance. More providers would be interested in Medicaid if the program's reimbursements were similar to Medicare payments, according to the report. These, are the main reasons for why health providers do not accept Medicaid.

2 Of course political interest and lobbying leads to bad regulations in government.

Politicians, for example, are in the business of maximizing votes, staying in office and increasing campaign contributions. On the other hand, special interest groups are in the business of protecting and advancing their interests via lobbying and campaign contributions to politicians who facilitate such goals. This means so-called good policies that harm certain special interest groups are unlikely to be supported by politicians whose goals are facilitated by the same special interest groups. Similarly, a policy that is beneficial for long-run economic growth but is highly unpopular with voters will not be passed because there is a risk of political suicide.