FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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One of the major difficulties facing the health insurance industry is that the people who are young and healthy see no need to buy insurance. The result of this tendency is that the people who want health insurance are the people that the insurance companies have the least desire to insure. The government's solution, under the Affordable Care Act (also known as Obamacare), was to simply mandate that all people must have health insurance. Unfortunately, this mandate did not yield the hoped for results of keeping one's doctor and cutting medical expenditures by $2,500 per family per year. (Infact, premiums have been rising.) Thus more reform is being talked about
Please explain the economic impact of the following reform proposals:
1. Decouple insurance from employment (allowing people to shop for their own insurance like we do for car insurance).
2. Allow insurance companies to screen applicants.
3. Allow consumers to signal that they are low-risk through the purchase of high-deductible policies.
4. Allow insurance companies to conduct business across state lines.
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- Which of he following stalements BEST describes the primary difference between a Health Maintenance Organizalion (HMO) and a Preferred Provider Organization (PPO)? A.Under a PPO lhe insured may use any medical provider whereas providers are restricted with HMOs. B.Under an tvo the deductibles are higher than are those of PPOs. C.POs do not provide preventive care benefits whereas HMOs do D.HMOs utilize larger cost sharing than do PPOsarrow_forwardThe ACA paid for its coverage expansion with Medicare savings (payment cuts and reforms) and taxes on higher income people. In the long run, the hope is that Medicare savings from payment reforms will increase their share of the financing burden. This will serve to keep all taxes – income and Medicare-specific taxes -- lower than they would otherwise be. Unfortunately, one of the most prominent payment reforms, the shared savings version of accountable care organizations, has been shown to cost Medicare more than it saved, at least through 2016. This was primarily because: a. Less than 1/3 of Medicare beneficiaries chose to be in an ACO b. It takes at least 7 years to save money with payment reforms in health care c. Shared savings with no downside risk impart weak incentives to control total cost of care d. Primary care is the key to saving health care spending and ACOs mostly ignored primary carearrow_forward5. Unemployment insurance and permanent job loss. Workers sometimes lose their jobs due to international trade. These jobs are permanently gone, and many displaced workers have difficulty finding a similar job. The jobs they can find in a few months tend to offer much lower wages than their old job. Consider the following two proposals to provide unemployment insurance for such workers. Explain your arguments for or against each policy. a) Workers displaced from industries identified as impacted by foreign trade receive extended unemployment benefits. They will receive unemployment benefits for an extra 26 weeks beyond the normal 26 weeks eligibility. b) These workers receive unemployment benefits up to 26 weeks. In addition, if they accept a job at a lower pay than their old job, they are guaranteed 50% of the difference in earnings as a wage supplement for two years. (The government pays the supplement to the worker.)arrow_forward
- Why would insurance providers charge more for a policy holder who smokes versus one who doesn't some?arrow_forwardAccording to reports, some of the nation’s largest mortgage lenders have made changes to their lending requirements, making it harder for buyers to be approved for buying a house or refinancing a mortgage. Banks like JP Morgan Chase and Wells Fargo are now raising their borrowing standards to a minimum credit score ranging between 700-720 and requiring a 20 percent down payment. Without meeting these requirements, prospective homeowners in weaker financial positions are now being pushed to a lower priority in the housing market. Given a home being the typical American’s biggest asset, what would you suggest be changed or put into place to allow more individuals from marginalized groups the opportunity to be a home buyer?arrow_forward
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