Consider the following scenario: Joe's initial income Y is $10,000. Joe experiences illness with aprobability of 20%. Joe's total medical costs associated with the illness are $1000. If Joe must pay apremium of $300 for insurance (i.e., 0% coinsurance rate, no deductible), what is the loading fee?a.$90b.$200C.$180d.$100

The loading fee is the admin cost for the insurance company. It is actually the profit of the…

Answered: Consider the following scenario: Joe's…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider a consumer with a medical bill of $5,000. He has a $4000 deductible and a 20 percent coinsurance rate on all expenses over $4000. His "out-of-pocket" liability for this bill is (assume he still has $4000 deductible to meet): $5000 $5200 $4000 $4200
Consider an insurance company offer a "standard contract" with the premium r= $100 and payout q=$500 to anyone who will purchase it. Peter has healthy-state income IH $500 and sick-state income Is $0. He has probability of illness p=0.1. Is the standard contract fair and/or full for Peter? If he ends up getting sick, what will his final income be? (please show all your calculations)
An individual with the utility function given by u(y) = -e-0.5y, and gross disposable income y = 10 faces the probability p 0.3 of getting ill with health care expenditures L = 3. 1. [M] Find optimal insurance coverage if there are no loading factor and full knowledge? 2. [M] Depict this optimal choice. 3. [M] How does it depend on gross income Y?
26) If an employee receives health insurance through his or her employer, the employer A) still withholds contributions for Medicare and Medicaid from the employee's paycheck. B) still withholds contributions for Medicare, but not Medicaid, from the employee's paycheck. C) still withholds contributions for Medicaid, but not Medicare, from the employee's paycheck. D) is no longer required to withhold contributions for Medicare or Medicaid from the employee's paycheck. 27) Which of the following is not part of the "individual mandate" provision of the Patient Protection and Affordable Care Act (ACA)? A) Individuals are allowed to opt out of the insurance program if they can prove they have no serious health issues and do so before the act fully takes effect in the year 2014. B) By 2016, fines for not having health insurance will be the greater of $695 per person or 2.5 percent of income. C) Beginning in 2014, individuals who do not…
Health insurance is a
Approximately __________ million Americans are without health insurance.
and you have a 10% chance of getting sick. Your income when sick is $0 and your income when healthy is $100. 1. Assume your utility over income is U=T ¥ 1. Graph your utility and income with income on the x-axis and utility on the y-axis. Show your income/utility when healthy and sick on the graph. 2. calculate your expected income. Show on graph. 3. calculate your expected utility. Show on graph. 1. Now you are offerred health insurance by Prof. Grossman's Totally Full and Fair Insurance Company. For a premium of $20, you will get a payout of $50 if you get sick. 1. Is the insurance company's name accurate (is this actuarially fair and full)? 2. What is the expected payout from this insurance? 3. What is the Income when sick and income when healthy under insurance? Show on your graph 4. What is the expected income and expected utility under this insurance? Show each on your graph 5. Propose a full and fair insurance given your 10% chance of getting sick and your healthy and sick…
"Self-insurance" behaviors are actions one takes that lower the probability of a negative health outcome. (True/False) Economics
Assume one's already met your deductiable and your out of pocket maximum is $2000 higher than your deductiable, and your con- insurance is 30%. You get a bill for $4000 from a medical provider - how much do you have to pay?
Suppose the income elasticity of demand for health care insurence is 0.3. If the level of income decreasesd by 1 percent , The demand for health insurence will 1.rise By.29 percent 2.rise by 0.3 percent 3.Fall by .29 percent
The question scenario is: Cost of care = $10,000 Annual deductible = $1000 Coinsurance = 20% Copayment = $20 Catastrophic care threshold = $25,000 Previous out-of-pocket payment ($, this year) = 0 What is the out of pocket payment in this scenario with different health insurance policies? Assume that copayments will not count toward deductible but will count toward the maximum out-of-pocket (catastrophic care)threshold. And Explain your general approach. Use step-by-step if - then statements.
Insurance coverage has been shown to diminish the importance of time in the decision about how much medical care to seek and which providers to use. True OR False

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