Consider Table 10.1, which has data on insurance status and medical expenditures for different types of professors at Adverse Selection University (ASU). In 2014, every employee of ASU was offered a full insurance contract at no premium. In 2015, ASU charged any employee who wanted to keep health insurance a $4,000 premium. As a result, all history professors dropped their coverage in 2015. Assume that the underlying health of ASU professors did not change much from year to year. Table 10.1: Information from the human resources department at ASU 2014 2015 Insured? Average Expenditures Insured? Average Expenditures Economics Professors Yes $5,000 Yes $5,000 History Professors Yes $3,000 No $2,000 Is there evidence of moral hazard in this market? How do you know? Is there evidence of adverse selection in this market? How do you know?

Consider Table 10.1, which has data on insurance status and medical expenditures for different types of professors at Adverse Selection University (ASU). In 2014, every employee of ASU was offered a full insurance contract at no premium. In 2015, ASU charged any employee who wanted to keep health insurance a $4,000 premium. As a result, all history professors dropped their coverage in 2015. Assume that the underlying health of ASU professors did not change much from year to year. Table 10.1: Information from the human resources department at ASU 2014 2015 Insured? Average Expenditures Insured? Average Expenditures Economics Professors Yes $5,000 Yes $5,000 History Professors Yes $3,000 No $2,000 Is there evidence of moral hazard in this market? How do you know? Is there evidence of adverse selection in this market? How do you know?

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter6: Population Health

Section: Chapter Questions

Problem 9QAP

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Refer to tables 14.4 and 14.5 given in the link “Numerical Problem”. Use information from these tables to discuss the following questions: Which country has the highest proportion of public insurance as a source of health care expenditure? Which country has a higher use of private insurance as a source of health care expenditure? Which country’s numbers shocked you the most? Discuss whether the US has better or worse health outcomes compared to other countries. Which country has a better access to primary care services? Which country has better access to specialist care services?
Indicate whether the statement is true or false, and justify your answer.Health status earlier in life is a good predictor of wealth later in life.
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Which of the following is a reason for the prevalence of employer-sponsored health insurance in the US? It offers a way to pool risk (wrong) Wage controls in WWII made employer sponsored health insurance more common. (wrong) all are possible reasons Firm specific human capital helps reduce adverse selection.
One major premise of the Rothschild-Stiglitz (RS) model is that there is a perfectly competitive market for health insurance. Suppose instead that the market is not perfectly competitive, and in fact competitor ﬁrms have a hard time entering the market. Could a pooling equilibrium occur in this case? What is it about competition that prevents pooling in the RS model? No formal proof is necessary, but do make your reasoning clear. Evaluate the following statement: competition in health insurance markets is harmful.
While it may seem intuitively obvious that health expenditures will increase as a population ages – older people after all are less healthy on average than younger people in fact, several prominent health economists have argued that it is not aging per se, but rather some of the correlates of an aging population that cause health expenditures to rise as a population ages. For instance, Getzen (1992) argues that, at least in part, rising health expenditures with an aging population are due to the higher incomes and resources of the older population; health care is a normal good, so higher incomes lead to higher expenditures. In a similar manner, Zweifel et al. (1999) argue that the real problem with an aging population, at least as far as health care costs are concerned, is that there will be more people who are within a couple of years of dying. Since health care expenditures rise sharply close to the end of life, it is this, rather than population aging by itself, that leads to higher…
In order to change the root causes of health disparity in the US, both popular and political will are needed. Based on what you have learned in this module, imagine how different the US would be if all people living here had social protections like universal health care, secure pensions, guaranteed job training, and placement assistance, 80% unemployment pay, income supports for families and unemployed single adults, paid parental leave, and universal childcare. With this concept in mind, for your initial discussion post, comment on whether or not you would be willing to pay 20% more of your income, to have all these benefits guaranteed to you.
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Which statement about health insurance in the US is false? Question options: 1) Going back to 1940, only about 10 percent of the US population had any health insurance 2) The share of the under-65 population with private health insurance rose until the 1970s and then plateaued—it remained virtually constant until the implementation of the Affordable Care Act 3) Early on, the health insurance market was dominated by Blue Cross plans, which practiced community rating in setting premiums 4) Measured in percentage points, the drop in the uninsured rate in the nonelderly population between 2013 and 2016 was larger than the increase in the share with private insurance
Suppose that there are two countries, Beta and Gamma. Suppose further that everyone in country Beta is on Insurance B and everyone in country Gamma is on Insurance G. Suppose further that both governments use government-set price controls. In 2005, country Beta decided to change the reimbursement rate for pharmaceuticals, but country Gamma did not make this change. You, a researcher, want to study the effect of offering coverage for this drug had an impact on health expenditures. You have average health expenditures for State Beta and Gamma prior to 2005 and post-2005. Using the information in the table below, a quick difference-in-difference calculation suggests covering this drug ____ health expenditures by approximately ____. State Time Periods Pre-2005 Post-2005 State Beta $1000 $1400 State Gamma $1500 $1700 a. decreased; $400 b. increased; $200 c. increased; $400 d. decreased; $200
Suppose that there are two countries, Beta and Gamma. Suppose further that everyone in country Beta is on Insurance B and everyone in country Gamma is on Insurance G. Suppose further that both governments use government-set price controls. In 2005, country Beta decided to change the reimbursement rate for pharmaceuticals, but country Gamma did not make this change. You, a researcher, want to study the effect of offering coverage for this drug had an impact on health expenditures. You have average health expenditures for State Beta and Gamma prior to 2005 and post-2005. Using your finding from the question above, you can infer that country Beta likely _____ reimbursement rates for pharmaceutical drugs. State Time Periods Pre-2005 Post-2005 State Beta $1000 $1400 State Gamma $1500 $1700 a. lower b. did not change c. raised
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Table 10.1: Information from the human resources department at ASU
	2014	2015
	Insured?	Average Expenditures	Insured?	Average Expenditures
Economics Professors	Yes	$5,000	Yes	$5,000
History Professors	Yes	$3,000	No	$2,000