Briefly explain the role of different entities in reducing moral hazard associated with health care.
What will be an ideal response?
Insurance companies or third-party payers attempt to reduce moral hazard
problems by requiring patients to pay higher deductibles or copayments (thereby
compelling the insured to share a greater proportion of incurred costs). The government
might intervene by introducing taxes to curb risky behavior (such as higher taxes on
tobacco and sugary beverages) or introduce subsidies to encourage healthier choices.
You might also like to view...
Which of the following is the BEST example of a private good?
A) a can of Mountain Dew B) fish in the ocean C) cable television D) national defense
The single best indicator of the degree of economic inequality in a country is the
a. top/bottom ratio b. Gini coefficient c. poverty rate d. Kuznets curve e. bell curve
Unemployment compensation programs tend to increase the unemployment rate because: a. they increase the opportunity cost of leisure
b. they provide benefits only to unemployed people under the age of 18. c. they legally fix the minimum wage that has to be paid to labor. d. they allow unemployed persons to become more selective in what job offer they accept. e. they do not provide benefits to labor engaged in the manufacturing sectors of the economy.
Macroeconomics is the study of
A) how households make choices. B) how firms make choices. C) how households and firms make choices. D) the economy as a whole.