Draw a graph showing how demand for medical care changes under health insurance where the insurance policy pays a % of costs. What happens to demand elasticity? Amount purchased at any price? What does this say about the effect of health insurance on individual vs. social “perceptions” of health care cost and benefit?

EBK HEALTH ECONOMICS AND POLICY
7th Edition
ISBN:9781337668279
Author:Henderson
Publisher:Henderson
Chapter7: The Market For Health Insurance
Section: Chapter Questions
Problem 3QAP
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Draw a graph showing how demand for medical care changes under health insurance where the insurance policy pays a % of costs.

    1. What happens to demand elasticity?
    2. Amount purchased at any price?
    3. What does this say about the effect of health insurance on individual vs. social “perceptions” of health care cost and benefit?
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