Community Rating Is Not Economically Feasible

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Community rating or risk equalization system would be regulated to provide equal service to any risk level consumer. Insurance companies will be forced to under provide at lower costs or provide standard service at rates that are unaffordable for many unless subsidized by government. Lower risk beneficiaries will have to compensate for higher risk consumers making it financially unviable. These would be issues in a normal competitive market, however in an ACA application, the concern for market decisions or risk selection is void anyway. So community rating would probably be appropriate in the type of policy. 2) State and explain whether or not community rating is equitable from the standpoint of both economics and risk - Community…show more content…
In the specific case of healthcare and marginal product, this would be the quantity of medical services divided by change in the variable input. With productivity rising to its optimal level, marginal productivity will then equal average productivity and thus average productivity is maximized. An example of this would be purchasing units of hospital beds. The more bed in inventory the more production will be realized at a certain point. Then productivity would be diminished at a rate specified above. 4) Compare the economic efficiency and the equity of financing national health care with a payroll tax vs. an income tax - The choice between taxing income versus taxing consumption is a key decision in the policy determination. Both payroll tax and income tax are essentially taxation on an individual’s income, as one is shared by the employer. I believe the economic efficiency and equity of financing suggests that the progressive financing of the health insurance system has limited implications for overall income inequality. 5) Hypothesize about the consequences of medical schools becoming more competitive like business schools and law schools - Medical school students should be held to a much higher standard of motive than other trades such as law and business. The importance of their future careers and place in the healthcare industry is of
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