5 Economist Tibor Scitovsky found that faculty and staff at Stanford University visited the doctor less often (compared to previous years) following a 25% increase in the coinsurance rate for the university-provided health insurance plan. This study provides evidence ofin a real-world insurance marketObulk markupsO ex post moral hazardex ante moral hazardO advantageous selectionadverse selection

Insurance is a risk management that protects people from unforeseen events in the future. For…

Economist Tibor Scitovsky found that faculty and staff at Stanford University visited the doctor less often (compared to previous years) following a 25% increase in the coinsurance rate for the university providid health insurance plan. This study provides evidence of in a real-world insurance market Obuk markups O ex post moral hazard O ex ante moral hazard O advantageous selection O adverse selection

Economist Tibor Scitovsky found that faculty and staff at Stanford University visited the doctor less often (compared to previous years) following a 25% increase in the coinsurance rate for the university providid health insurance plan. This study provides evidence of in a real-world insurance market Obuk markups O ex post moral hazard O ex ante moral hazard O advantageous selection O adverse selection

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter12: Medicare

Section: Chapter Questions

Problem 4QAP

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What is the problem of moral hazard?
In the RAND study, two plans had full coverage for spending within the hospital, but one had a $150 deductible for ambulatory care. Th e plan with the ambulatory care deductible had a lower probability of hospital admission (0.115) per year than did the plan with full coverage for everything (0.128), even though both plans covered hospital care fully. (See Table 5.4. Page 120 of the Textbook: Health Economics Charles) What does this tell you about the use of hospital and ambulatory. Table 5.4. Hospital use in HIS Plan Admissionsper Year Inpatient Cost(1984 Dollars) C = 0 0.128 409 C=0.5 0.092 450 C=0.95 0.099 315 $150 individual deductible 0.115 373
A consumer’s demand for a medical service is as follows: Q = 100 – P, where P is theout-of-pocket price she actually faces. Assume this medical service has a market price of $70.This consumer is considering four different insurance options: no insurance, full insurance, a 50% coinsurance plan, and a copayment plan with a $25 co-pay Calculate the deadweight loss under each insurance scheme and show iton each graph. What do you observe?
In the RAND study, two plans had full coverage for spending within the hospital, but one had a $150 deductible for ambulatory care. Th e plan with the ambulatory care deductible had a lower probability of hospital admission (0.115) per year than did the plan with full coverage for everything (0.128), even though both plans covered hospital care fully. (See Table) What does this tell you about the use of hospital and ambulatory. Plan Admissionsper Year Inpatient Cost(1984 Dollars) C = 0 0.128 409 C=0.5 0.092 450 C=0.95 0.099 315 $150 individual deductible 0.115 373
The primary purpose of he Coordinalion of Benefits provision found in most group Major Medical policies is to perform which of the following funclions? A.Providing coverage for insureds who are leaving heir employment B.Preventing a claimant from profiting from an injury or sickness C.Allowing an insured to receive bolh Disability Income benefits and Medical Expense benefits if entilled o both D.Permitting an insurance company to pay benefits direclly to providers of medical services
14. Chapter ma?pe09r, Section 22, Problem 025 (ID: 025.22.MANK09) People with hidden health problems are more likely to buy health insurance than are other people. This is an example of Ca. adverse selection and makes the cost of health insurance lower than otherwise. Ob. adverse selection and makes the cost of health insurance higher than otherwise. Oc. moral hazard and makes the cost of health insurance lower than otherwise. Od. moral hazard and makes the cost of health insurance higher than otherwise.
For 11-18: GIVEN TREATMEN T CHOICES Treatment COST LIFE Treatment D $15,000 31 Treatment $17,000 29 W no treatment EXPECTANCY Treatment B $7,000 18 Treatment C $11,000 26 Treatment Y $9,000 19 Treatment X $13,000 23 Treatment A $3,000 10 Treatment Z $5,000 16 $0 2 11. Which of the following is true? A) X OD C B) W is OD by C C) COD W D) W is OD by D B) X only C) X and W D) W only years years years years years years years years years E) all the choices are true 12. Identify all the obviously dominated treatments A) A and Z 13. Name all the obviously DOMINATING treatments. (only the treatments that obviously dominate other treatment(s) A) Y and B B) X and W C) C only D) C and D E) A,Z,B,Y,Z,D: all these treatments that are not obviously dominated, obviously dominate some treatment
14 Imperfect competition and moral hazard. Some economists have argued that moral hazard and monopolistic health care markets are two socially inefficient problems that e 19bnu partially cancel each other out. Relative to the optimal level of health care Q*, how much health care is provided in the presence of moral hazard? Assume perfectly competitive health care markets. a bns b Relative to the optimal level of health care Q*, how much health care is provided in m the presence of monopolistic health care markets? Assume no moral hazard. A bne c Write a one-sentence defense of the argument that moral hazard and imperfectly competitive health care markets could combine to provide a good level of health care provision Q. d Gaynor and Vogt (2000) contend that this argument is not quite right. Draw your own version of the Pauly tradeoff diagram (Figure 11.8) with a locus of feasible contracts under moral hazard and perfect competition in the health care market. Now draw a new focus of…
What is the significance when it comes to moral hazard to show it's efficient function of a medical market?
An insured is employed by a manufacturing company that provides group health coverage for its employees and their dependents. If the insured dies, the company must allow theinsured's spouse and children to continue their group heallh coverage for a maximum of how many moriths according to COBRA? 36 B.18 C.12 D.6
Define the difference between moral hazard and adverse selection using an example. .
Outpatient Price per Region Tokyo Visits Visit 1 per month 25 Yen Hokkaido 1.5 per month 10 Yen What is the arc price elasticity of demand for health care in Japan based on these data? a. c. Using your estimated elasticity from part a, what would the demand for health care be if the price in Tokyo were raised to 30 Yen per visit? d. Using your estimated elasticity from part a, what would the demand in Hokkaido be if the price were lowered to 5 Yen per visit?