Econ Quiz 24-25

Employer Mandate

A legal requirement for employers to help pay for their employees' health insurance under the ACA

Economic Immigrants

International migrants who have moved to a country from another to obtain economic gains such as better employment opportunities

Are most immigrants legal or illegal?

Legal

beaten paths

Migration routes taken previously by family, relatives, friends, and other migrants

Remittances

Money migrants send back to family and friends in their home countries, often in cash, forming an important part of the economy in many poorer countries

defensive medicine

Ordering more tests and procedures than are necessary in order to protect oneself from a lawsuit.

insurance exchanges

Organizations that facilitate structured and competitive markets for purchasing health coverage

illegal immigrant

Someone who has moved to their destination country without going through any legal procedures

List the special characteristics of the U.S. health care market, and specify how each affects health care problems.

The health care market has many characteristics that differentiate it from a perfectly competitive market. (1) There are ethical questions connected with health care services that don't arise when people are unable to afford other types of goods and services—in general, society regards access to basic health care as a right. (2) Buyers of health care typically have little information about the services they need and should acquire, creating the unusual situation in which the doctor (supplier) orders the services for the patient (consumer). (3) There are significant spillover or external benefits connected with health care, suggesting that society should be willing to pay more than the amount coming from the private sector alone. (4) Third-party payments are common because the patient (consumer) has prepaid for insurance benefits, and about three-fourths of all health care expenses are paid in this way. Consumers directly pay lower "out-of-pocket" expenses than if they were not insured, which causes them to overconsume.

Preferred Provider Organization (PPO)

a health care plan that contracts with health care professionals to provide services at a reduced fee and gives patients financial incentives to use network providers

Copayment

a provision under which the insured pays a flat dollar amount each time a covered medical service is received after the deductible has been met

substitute resources

a resource that takes the place of another resource when the latter is unavailable or becomes too expensive

fee-for-service

a system under which doctors and hospitals receive a payment for each service they provide

Health Savings Account (HSA)

a tax-free savings account—funded by employees, employer, or both—to spend on routine medical costs. Usually combined with a high-deductible policy to pay for catastrophic care

efficiency gains from migration

additions to output from immigration in the destination nation that exceed the loss of output from emigration from the origin nation

Health Maintenance Organization (HMO)

an organization that provides comprehensive medical care to subscribers for a fixed fee

compensating wage differentials

differences in the wages received by workers in different jobs to compensate for the nonmonetary differences between the jobs

Diagnosis-related groups (DRGs)

payment for hospitalization, surgery, or other treatment is specified according to the diagnosis under Medicare

complementary resources

resources and assets not directly involved in the production of the product but required for success, such as marketing, management, financial assets, and reputation

The primary reason most people immigrate to the United States

Economic, family reunification

tax subsidies

- Enable the government to offer programs free or at a reduced cost - Support bonds for construction (69% of costs) - Support operations (52% of revenues)

National Health Insurance

A plan to provide universal health insurance under which the government provides basic health insurance to all citizens. In most such plans, the program is funded by taxes on wages or salaries.

H1-B Visa

A visa classification that provides employers with the ability to hire workers with specialized training from the global labor market to meet critical, but usually temporary, business needs.

Deductible

Amount you must pay before you begin receiving any benefits from your insurance company

self-selection

As it relates to international migration the idea that those who choose to move tend to have greater motivation for economic gain or greater willingness to sacrifice current consumption for future consumption than those with similar skills who choose to remain at home

Briefly discuss the demand and supply factors that contribute to rising health costs. Specify how (a) asymmetric information, (b) fee for service payments, (c) defensive medicine, and (d) medical ethics, might cause health care costs to rise.

Asymmetric information refers to the fact that consumers of health care often have very little understanding of or access to the information about the health care services that they need. Fee-for-service payments can contribute to rising health care costs by making it possible for providers to increase their incomes by simply ordering more services for the patient. Defensive medicine refers to the practice that physicians follow to avoid malpractice charges. To defend against such concerns, they may order more tests and procedures than would be warranted medically or economically. Medical ethics, which require the "best practice" techniques, may result in the use of costly medical practices with only marginal benefits.

Briefly describe the main features of Medicare and Medicaid, indicating how each is financed

Medicare is a nationwide Federal health care program available to social security beneficiaries and the disabled. It consists of a hospital insurance program and certain other coverage for post-hospital care. It also includes a subsidized medical insurance portion ($58.70 per month in 2003) for physician services, lab tests, and other outpatient services. The hospital portion is covered through payroll taxes, the same as social security. The medical portion is covered as stated, with about three-fourths of the cost being covered by the government. Medicaid provides payment for medical benefits to certain low-income people, including the elderly, blind, disabled, children, and adults with dependent children who qualify. Nevertheless, it covers less than half of those in poverty.

personal mandate

The requirement under the Patient Protection and Affordable Care Act (PPACA) of 2010 that all U.S. citizens and legal residents purchase health insurance unless they are already covered by employer-sponsored health insurance or government-sponsored health insurance (Medicaid or Medicare).

legal immigrant

refers to any immigrant who goes through the correct legal procedure to live and work in a country

backflows

the return of workers to the countries from which they originally emigrated

Patient Protection and Affordable Care Act (PPACA)

2010 federal legislation designed for comprehensive health reform, with an intent to expand coverage, control health care costs, and improve the health care delivery system

Why would increased spending as a percentage of GDP on, say, household appliances or education in a particular economy be regarded as economically desirable? Why, then, is there so much concern about rising expenditures as a percentage of GDP on health care?

Because it is reasonable to assume that health care spending varies positively with output and incomes, but that doesn't account for the higher U.S. health expenditures as percentage of GDP.. -- for how much money we put in not that many results and household appliances are totally different because that would boost the economy for someone buying items-- with healthcare it is more a necessity --may have to raise taxes to keep expenditures low

What are the estimated income and price elasticities of demand for health care? How does each relate to rising health care costs?

Income elasticity is 1.0, suggesting that health care spending will rise proportionately with income. Some studies indicate that it might be 1.5 in the U.S. Price elasticity is only 0.2, meaning higher prices for health care services will increase total health care spending.

What are the implications of rapidly rising health care prices and spending for (a) the growth of real wage rates, (b) government budgets, and (c) offshoring of U.S. jobs?

The real total compensation package, wages plus benefits, can only rise as fast as productivity does. If health insurance benefits rise more rapidly than productivity, then the real wage component of the compensation package is squeezed and it must fall. Workers feel the burden of rising health care costs as their take-home wages fall.

Who are the main groups without health insurance?

The working poor, those who work for small firms or part time, and young adults

negative self-selection

as it relates to international migration, the idea that those who choose to move to another country have poorer wage opportunities in the origin country than those with similar skills who choose not to emigrate

What are the twin problems of health care and how are they related?

rising prices for all and limited access (lack of insurance) for about 16 percent of the population (46 million). The problems are related since rising costs make insurance unaffordable for many individuals and families, and make it difficult for some businesses to insure their workers.

skill transferability

the ease with which people can shift their work talents from one job, region, or country to another job, region, or country

Brain Drain

the loss of highly educated and skilled workers to other countries