What would happen if, in order to provide lower-cost health care, the government decided to set a price ceiling (Pmax) in the health insurance market? (Answer questions a, b, and below) a. What is the effect of this maximum price legislation on the market for health insurance? b. Briefly explain the situation for both consumers snd producers (i.e health care providers) c. What might the government do to achieve their intended aims (i.e. lower costs and increased quantity)?

What would happen if, in order to provide lower-cost health care, the government decided to set a price ceiling (Pmax) in the health insurance market? (Answer questions a, b, and below) a. What is the effect of this maximum price legislation on the market for health insurance? b. Briefly explain the situation for both consumers snd producers (i.e health care providers) c. What might the government do to achieve their intended aims (i.e. lower costs and increased quantity)?

EBK HEALTH ECONOMICS AND POLICY

7th Edition

ISBN:9781337668279

Author:Henderson

Publisher:Henderson

Chapter13: Medicaid

Section: Chapter Questions

Problem 5QAP

See similar textbooks

Similar questions

What would happen if, in order to provide lower cost healthcare, the government decided to set a price ceiling (Pmax) in the health insurance market? What is the effect of this maximum price legislation on the market for health insurance? Briefly explain the situation for both consumers and producers (i.e. healthcare providers). What might the government do to achieve their intended aims (i.e. lower costs and increased quantity)?
What would happen if, in order to provide lower cost healthcare, the government decided to set a price ceiling (Pmax) in the health insurance market?
Draw a graph showing how demand for medical care changes under health insurance where the insurance policy pays a % of costs. What happens to demand elasticity? Amount purchased at any price? What does this say about the effect of health insurance on individual vs. social “perceptions” of health care cost and benefit?
Assume that the government decides to subsidize the price of healthcare. The subsidy will be given directly to individual consumers of medical-related goods and services. Who is likely to benefit more from this subsidy: Providers (doctors, nurses, hospital staff, etc....) or Patients? Explain your answer using a supply and demand diagram.
Draw the demand curve in the market for medical care and upload your picture of your diagram, the horizontal axis should represent the number of medical procedures.) Show the quantity of procedures demanded if each procedure has a price of $100. On your diagram, show the quantity of procedures demanded if consumers pay only $20 per procedure. If the cost of each procedure to society is truly $100, and if individuals have health insurance as described above, will the number of procedures performed maximize total surplus? Explain. Consider how health insurance affects the quantity of healthcare services performed. Suppose that the typical medical procedure has a cost of $100, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $80. (The insurance company recoups the $80 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undertake.)
Suppose the government imposes a system of price ceilings in the health care industry as part of an overall health care reform bill. a) draw a graph of the health care market and show equilibrium price and quantity. b) assume the government imposes an effective price ceiling in the health care market. Show the price ceiling in your graph. Indicate what will happen to quantity demanded and quantity supplied of health over time ? c) would a shortage or surplus result ? I llustrate in your graph.
Compare the market for baby products and the market for childbirth (via either vaginal delivery or cesarean section procedure), then discuss the concept of ‘Agreement of Trade’ in both markets. Using illustrations, briefly explain how the following economic concepts find significance in understanding the market for health and health care: Scarcity, Choice and Opportunity Cost Efficiency and Equity Benefit-Cost Principle
The government has introduced an excise duty of 10 percent on mealie meal. This essentially means the price of mealie meal, an essential item in most households, has increased by 10 percent. As the chief economist responsible for managing a social protection programme, you have been asked to make a proposal on how you can minimise the adverse effect of the excise duty on low income households. Using your knowledge of compensating or equivalent variation, show how you would ensure that these households are protected from such a measure. Would Lump sum taxes be better than unit (ad valorem or percentage) taxes in this context?
A short piece from The Economist noted that “A doctor of general medicine in New York typically earns 64% less than a peer in Alabama.” This is despite the fact that there is a significantly higher demand for general medicine in New York compared to Alabama. Use a market supply and demand for general medicine practitioners in both New York and Alabama to depict this situation, and briefly explain why this is the case.
The graph below shows the market for medical services in a country. Initially, there is no government health care system and the price per unit is 200 TL. Then the government decides to provide health care program in which the citizens pay only 40 TL for any medical acre they take. Total health expenditures without any government health care program is …………… The amount of medical services per year when government provides health care is ………….. Total health expenditures with government health care program is ……………… Government’s total health care expenditure is ………………. Citizens’ total health care expenditure after government health care program is ………. The amount of deadweight loss due to government health care program is …………………
The graph below shows the market for medical services in a country. Initially, there is no government health care system and the price per unit is 200 TL. Then the government decides to provide health care program in which the citizens pay only 40 TL for any medical acre they take. Government’s total health care expenditure is ………………. Citizens’ total health care expenditure after government health care program is ………. The amount of deadweight loss due to government health care program is …………………
Economists in Champaign have been studying the local market for pizza. The market is described in the graph below: Some research by the local university shows that eating pizza improves health in several ways. The local government decides to subsidize pizza consumption paying for $2 of every pizza sold(essentially a negative tax of $2). How much will the government spend with this subsidy?