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Exam 14: The Economics of Health Insurance and Health Care

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Question 21

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One reason why adverse selection problems arise in the market for health insurance is because

A) sick people are more likely to want health insurance than are healthy people.
B) fewer people are choosing careers in the medical field because of increases in the cost of education.
C) as people live longer, a greater portion of their medical bills will have to be paid by younger generations.
D) advances in medical technology are costly, and drive up the price of medical insurance.

E) A) and B)
F) B) and C)

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Question 22

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Match the following countries with the type of health care delivery system each uses: -Canada

A) nationalized health care
B) private health care
C) single-payer system
D) universal health care

E) B) and C)
F) A) and D)

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Question 23

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Deductibles, copayments, and coinsurance are all ways in which insurance companies can address the problem of moral hazard.

Scenario 14.1: Marco and Lisette love to play darts, but both suffer from carpal tunnel syndrome due to excessive play. They are considering how many visits to make to the doctor, and both know that they each get $150 of relief from the first visit, and only $45 of additional relief from the second visit. Neither has health insurance and therefore will bear the full cost of medical care. Each visit to the doctor costs $75. -Refer to Scenario 14.1. Marco and Lisette decide to help each other out and agree to split any medical bills from their doctor. With this new arrangement, this scenario resembles a

In the United States, the market for health care is very competitive, with little variation in price for similar medical procedures.

Since 1960, the price of medical care in the United States has

Prior to the health care reforms passed in 2010, about ________ of all Americans had no health insurance.

Match the following countries with the type of health care delivery system each uses: -Japan

Since 1960, life expectancy at birth has ________ in the United States.

In Canada, the government alone is responsible for paying health care providers for delivering medically necessary procedures.

The health care reforms passed by the U.S. government in 2010 are collectively referred to as

Research by economists Martin Hackmann, Amanda Kowalski, and Jonathan Kolstad indicates that the individual mandate provision of the Massachusetts health care program was responsible for a(n) ________ in premiums and the mandate helped to ________ premium increases in subsequent years.

Which of the following provisions of the Affordable Care Act will work to keep high-risk and low-risk people in the same health insurance pool?

In the United States, government spending (federal, state, and local) on health care services accounts for ________ of all health care spending.

Explain the differences between asymmetric information, adverse selection, and moral hazard.

Scenario 14.1: Marco and Lisette love to play darts, but both suffer from carpal tunnel syndrome due to excessive play. They are considering how many visits to make to the doctor, and both know that they each get $150 of relief from the first visit, and only $45 of additional relief from the second visit. Neither has health insurance and therefore will bear the full cost of medical care. Each visit to the doctor costs $75. -Refer to Scenario 14.1. Lisette's dominant strategy will give her a net benefit of

Match the following countries with the type of health care delivery system each uses: -the United Kingdom

With respect to the insurance market, what is adverse selection?

When Jimmy is shopping for fire insurance for his condo, he finds that the insurance companies all require smoke detectors be installed before they will issue a policy. This is a way for the insurance companies to help reduce the problem of ________.

When comparing the gap in measured health care outcomes between the United States and Canada, the U.S. health care system stacks up poorly in terms of life expectancy and infant mortality. Much of that gap can be attributed to which of the following occurrences in the United States?