ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
ISBN: 9781337408059
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 14, Problem 8P
To determine
The problems faced by the health insurance because of the adverse selection and moral hazard and the ways in which the insurance company tries to minimize these problems.
What are the problems faced by health insurance companies due to adverse selection and moral hazard? Discuss how they try to reduce risk.
Concept Introduction:
Asymmetric information is lack of information where one party has an advantage over the other and they use it to their economic advantage.
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Chapter 14 Solutions
ECON MICRO (with MindTap, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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Similar questions
- : What economic theories are most useful when applied to the healthcare industry and why?arrow_forwardTABLE 4-VARIOUS MEASURES OF PREDICTED ANNUAL USE OF MEDICAL SERVICES, BY INCOME GROUP i) ii) Plan Likelihood of Any Use (Percent) 82.8 Free Family Pay 25 Percent 50 Percent 95 Percent Individual Lowest Third Mean 50 Percent 95 Percent Individual Deductible Expenses (1984 $) Free Family Pay 25 Percent 50 Percent 95 Percent Individual Deductible 71.8 64.7 61.7 10.03 9.08 8.77 9.26 Deductible 65.3 Likelihood of One or More Admissions (Percent) Free Family Pay 10.63 25 Percent 788 680 610 581 Income Middle Third Mean 87.4 609 80.1 76.2 68.9 73.9 10.14 8.44 8.06 7.38 9.44 736 588 550 494 Highest Third Mean 594 90.1 84.8 82.3 73.8 79.1 10.35 7.97 7.77 7.07 9.88 809 623 590 527 Significance Tests ton Contrast of: 670 Middle vs. Lowest Thirds 4.91 5.45 4.35 3.96 6.09 -0.91 -2.95 -1.78 -2.79 0.31 -1.78 -3.17 -1.89 -3.09 Highest vs. Lowest Thirds 5.90 6.28 4.86 4.64 7.09 -0.35 -2.75 -1.66 -2.46 -0.57 Assume average income in the bottom, middle, and top income terciles make $15,000, $50,000, and…arrow_forwardIn an insurance system, would you expect each person to receive in benefits pretty much what they pay in premiums or is it just that the average benefits paid will equal the average premiums paid?arrow_forward
- Why is it difficult to measure health outcomes?arrow_forwardwhat recommendations would you make regarding the benefits plan for the next year (consider both financial and non-financial considerations. what would be at least 2 benefits that would need to be eliminated or reduced. Benefit Employee Ranking (1- highest, 10 lowest) Cost (1 - highest, 10 -lowest) Utilization Rates Comments Health Insurance 1 1 76% Dental Insurnace 3 4 72% Vision Insurance 5 5 40% Life Insurance 9 9 100% Employer paid at a base benefit Long-Term Disability 8 6 100% Employer paid at a base benefit Short-Term Disability 7 2 67% 401k 4 3 80% Paid Time Off 2 10 100% All employees are full-time, elgible Employee Assistance Program 6 7 1% Tuition Reimbursement 10 8 2%arrow_forwardWhat do you understand by the term "Health Insurance"?2. Describe the different types of Health Insurance3. Discuss factors that would make any two mentioned types of health insurance successful.arrow_forward
- How much is Jane’s deductible? What percentage of the bill does Jane’s health care plan pay once co-insurance begins? What percentage of the bill does Jane pay once co-insurance begins? How much is Jane’s out-of-pocket limit? How much does Jane pay after she reaches her out-of-pocket limit?arrow_forward5 (True / False / Uncertain) The Comprehensive Care Physician Model aims to improve care by reducing the need to coordinate inpatient and outpatient care. please identify it's True / False / Uncertain, and give an explanation of no more than 200 words.arrow_forward3arrow_forward
- QUESTION 19 What are the three components of health as defined by the World Health Organization? A. Physical, mental and social well-being B. No diseases, sickness or illness C. Positive health outcomes, low morbidity rates, and mental well-being D. Physical, spiritual and mental well-beingarrow_forward2) Why isn't healthcare just another good? A. Healthcare is an investment B. Healthcare suffers of adverse selection C. Healthcare is a public good D. Healthcare involves asymmetric information E. All of the abovearrow_forwardEconomics in detail describe how does the environmental behavioral, ethnic and delivery of healthcare issues determine our heath? describe the relationship between health and observation ; include examples to suport the relationship between determinants of health and and the obseevation of a neighborhood grocery store. ( harris teeter and Food lion).arrow_forward
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