A consumer’s demand for a medical service is as follows: Q = 100 – PP where PP is the out-of-pocket price she actually faces. She is considering four different insurance options: uninsurance, full insurance, and a copayment plan with a $25 copay. Assume this service has a list price of PL = $70. Calculate Q under each insurance plan: uninsured , fully insured , 50% coinsurance , and copayment plan Do you observe evidence of moral hazard? (yes or no?)
A consumer’s demand for a medical service is as follows: Q = 100 – PP where PP is the out-of-pocket price she actually faces. She is considering four different insurance options: uninsurance, full insurance, and a copayment plan with a $25 copay. Assume this service has a list price of PL = $70. Calculate Q under each insurance plan: uninsured , fully insured , 50% coinsurance , and copayment plan Do you observe evidence of moral hazard? (yes or no?)
Chapter7: The Market For Health Insurance
Section: Chapter Questions
Problem 11QAP
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A consumer’s demand for a medical service is as follows:
Q = 100 – PP
where PP is the out-of-pocket price she actually faces. She is considering four different insurance options: uninsurance, full insurance, and a copayment plan with a $25 copay.
Assume this service has a list price of PL = $70.
Calculate Q under each insurance plan:
uninsured ,
fully insured ,
50% coinsurance ,
and copayment plan
Do you observe evidence of moral hazard? (yes or no?)
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