he RAND Health Insurance Study gave every subject a fixed amount of money that covered the maximum possiblee xpenditure that each subject might have. Because of this, all participants could act as if they had full coverage, and thee xperiment was invalid.” Assuming the validity of the first sentence, comment on the inference drawn in the second sentence.
1. “The RAND Health Insurance Study gave every subject a fixed amount of money that covered the maximum possiblee xpenditure that each subject might have. Because of this, all participants could act as if they had full coverage, and thee xperiment was invalid.” Assuming the validity of the first sentence, comment on the inference drawn in the second sentence.
2. In the RAND study, two plans had full coverage for spending within the hospital, but one had a $150 deductible fora mbulatory care. The plan with the ambulatory care deductible had a lower probability of hospital admission (0.115) per year than did the plan with full coverage for everything (0.128), even though both plans covered hospital carefully. (See Table 5.4. Page 120 of the Textbook: Health Economics Charles Phelps) What does this tell you about the use of hospital and ambulatory.
3. For a person who previously had no insurance and received an insurance plan paying for 80 percent of all types of medical care, what increase in use would you expect for hospital care, dental care, and physician services, on average?
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