A recent trend in health insurance is the Health Savings Account (HSA). The idea behind Health Savings Accounts is that rather than providing employees with health insurance that makes visiting doctors cost little more than a simple $10 or $20 copay the employer gives the employee money to use to spend on health care, but the employee bares the entire cost of seeing the doctor. What money given for health care not spent by the employee can be withdrawn by the employee as if it was additional income. It is believed that Health Savings Accounts will reduce the total amount of money spent on seeing doctors. Using Supply and Demand analysis, explain why there is the expectation that HSA’s will reduce spending on doctors.
A recent trend in health insurance is the Health Savings Account (HSA). The idea
behind Health Savings Accounts is that rather than providing employees with
health insurance that makes visiting doctors cost little more than a simple $10 or
$20 copay the employer gives the employee money to use to spend on health care,
but the employee bares the entire cost of seeing the doctor. What money given
for health care not spent by the employee can be withdrawn by the employee as if
it was additional income.
It is believed that Health Savings Accounts will reduce the total amount of
money spent on seeing doctors. Using Supply and Demand analysis,
explain why there is the expectation that HSA’s will reduce spending on
doctors.
Demand for healthcare refers to the level of consumption of healthcare by an individual in case of illness.
Supply of health care includes curative and preventative services and treatments provided by the health care system.
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