la. Suppose a particular population has two kinds of health risks, high and low. Let the expected annual health care costs for the high risk be $10,000, and for the low risk, half that. If there are twice as many low risk as high risk individuals, and if the one insurer's administrative load is 20%, what would the community rated premium be if everyone is compelled to and able to buy health insurance? Note: administrative load can be construed as the amount that the insurer has in costs to run the plans above and beyond the "health care costs." a. $7500 b. $6000 c. $12,000 d. $8000 2a. Now suppose insurance rules are changed to permit a new insurer (B) to enter this marketplace and be allowed to exclude the high risk due to pre-existing condition exclusions while the other incumbent insurer (A) is forced to still charge a community rate (as in the ACA). Assuming loads remain at 20% in long run equilibrium, what would the premiums be in each market, (low risk, high risk)? a. $5000, $10,000 b. $6000, $12,000 c. $7500, $15,000 d. $8000, $11,000

Sarah purchased an individual medical expense insurance policy that included a $250 deductible and an 80-20 coinsurance provision. She required medical care and the cost of the care provided was $40,750. How much of this amount must Sarah pay and how much will her insurer pay? How would your answer change if Sarah's policy included a $3,000 out-of- pocket limit that applied to coinsurance payments? . HINT (Coinsurance is calculated after you pay your deductible)

BN7.1 Explain the First Welfare Theorem & why it does not apply to Health Care Markets?

Briefly analyze & discuss the advantages and disadvantages of adopting a single-payer system for a National Health Insurance policy. (Please create a table to compare)

Suppose consumers consume and gain utility from two types of goods and services – (1) health care and (2) all other goods & services. Using this information, derive the demand curve for health care.

i.  i.   Distinguish between the medical definition of heath and the economic definition of health.     ii.  Which definition you like better? Explain.