Question

Drawing on economic concepts and illustrative examples in your answers, discuss the following two statements separately and whether you agree with the statement or not.

1. A person can benefit from having health insurance coverage even if the premium paid exceeds the cost of health care received.

2. Preserving the concept of consumer sovereignty is sufficient justification for addressing moral hazard using demand-side solutions. To what extent do you agree with this statement in the context of health care?

Answer 1

1, Health care premiums are advanced payment for the individual or family to make their health insurance policy active. premiums monthly payable when individuals purchase and receive health insurance through
their payroll deductions. it is a cost you paid on a monthly basis. premiums are not only for the medical care you receive, after paying the monthly fee we need to pay the out of pocket payment as per the care we receive. it includes a deductible, copays, and coinsurance.coinsurance is a percentage of the bill we have to pay after reaching our deductible, the insurer pays the remaining portion of the bill. we can deduct our health insurance premiums and health care costs if our expenses reach more than 10% of our adjusted gross income. we can deduct the expenses if exceed 10% of our adjusted gross income.
2, consumer sovereignty is a conceptual interest and has practical consequences. consumer sovereignty is an economic concept.in free-market consumer has the highest level of consumer sovereignty.consumer can buy any commodity whenever they want.it provides a demand-side solution with a moral hazard that consumers have the freedom and ability to choose their suppliers and health care. it help to make the informed choices among competing option, it makes sure that consumer receives the perfect information regarding their choice.