WEEK 6 Foundations
Describe a quality of indemnity/fee for service coverage
With this plan you can go anywhere, but with greater expense/coverage limits
Ken Arrow says this for why health insurance is unique
Demand is irregular - no one plans to get sick
In a world of imperfect information and adverse selection, this means:
Low risk individuals often overpay
In the KFF study on dominated health plan selection, what was the set up?
Many plans offered, similar services, only difference were premiums
The individual
With Group Health, describe the insurer, insured relationship.
There is a master contract between the group and the insurer
Amy Finkelstein says what about healthcare consumption.
Individuals consume less healthcare services when cost sharing is higher
With a "separating equilibrium," what does your market selection signal?
Your choice of plan signals your risk profile
What's a key finding the in KFF study on the selection of dominated plans?
Most picked the financially dominated or worse plan
Who is mostly likely to be without insurance
26-34 years olds
Do smaller businesses typically qualify for higher tax credits on health insurance?
This is true!
The RAND Health Insurance Experiment found that, relative to consumption:
People tend to use more healthcare as it becomes free
Why do some select bankruptcy as a health insurance option?
Medical debt can be discharged in Chapter 7 bankruptcy
In this KFF study, because of cognitive bias, lower income employees selected:
The worse plan
Researchers on liquidity consider what to evaluate impacts of challenges:
The number of adults who can't cover a $400 emergency
In choosing a health plan, why should someone healthy consider plan deductible levels?
High deductibles can sometimes save you money if you are healthy
Arrow says ideal insurance should:
Cover you being sick, protect from financial ruin, incent wellness
Can you name a "Pigouvian-like" penalty? Think bad habit...
A cigarette tax
For small businesses, agents and brokers matter because:
They reduce search costs for the best plans
Current problems in U.S. healthcare include
Large numbers of uninsured
Which plans have a gatekeeper physician determining if specialist care is necessary
A Health Maintenance Organization
In the face of moral hazard, beyond bad behavior, it's also about:
Some just reacting to incentives
In liquidity constraint situations, what does our academic paper suggest relative to choices:
Irrational choices could be financially reasonable given cash limitations
According to research, having greater choices of brokers in a market often means:
Smaller firms pay lower premiums for similar plans
Reaching your OOP deductible means what?
Office visits could potentially cost nothing