Economics CH 22

According to most experts, which of the following factors is most important in causing health care costs to rise?

Fee-for-service health insurance and cost-increasing technology.

The number of Americans without health insurance (as of 2011) is approximately:

49 million, or about 16 percent of the population.

Approximately what percentage of U.S. health care spending is financed by public insurance?

50%

What was the primary goal of the proponents of the Patient Protection and Affordable Care Act?

Extend health insurance coverage to all Americans.

Given the availability of the Medicaid program, why are so many poor people uninsured?

Because many poor people earn enough that they do not qualify for Medicaid.

Insurance tends to drive up health care costs by encouraging greater use of health care resources. Why has this occurred in the United States but not in Canada or the United Kingdom?

Canada and the United Kingdom use nonprice rationing to contain costs.

Suppose you go to a doctor, but your health insurance plan reimburses you for only 80 percent of the bill. This is an example of:

a copayment.

Suppose you go to a doctor but your health insurance plan does not reimburse you because you have not yet paid enough out of pocket for the year to qualify for insurance benefits. This is an example of:

a deductible.

It is generally agreed that in the long run the cost of private health insurance provided by employers is:

at the expense of real wages.

Employer-provided private health insurance began in the United States because:

during World War II, wage and price controls forced employers to use nonwage forms of compensation to attract workers.

A tax subsidy is involved in employer-financed health insurance because:

employer payments for health insurance are not subject to income or payroll taxes.

The problem of asymmetric information is that:

health care providers are well-informed, but buyers are not.

The two main types of managed care organizations are:

health maintenance organizations (HMOs) and preferred provider organizations (PPOs).

As a percentage of GDP, U.S. health care spending is:

higher than for any other major industrial country.

The availability of health insurance tends to:

increase the quantity of health care demanded and cause an overallocation of resources to the health care industry

Health care:

is a normal good

Employer-provided private health insurance:

is unique to the United States and not typically found in other countries.

Between 1960 and 2011, U.S. health care spending as a percentage of domestic output:

more than tripled

Defensive medicine refers to the idea that:

physicians may require unnecessary testing as a means of protecting themselves against malpractice suits.

The major purpose of Medicare is to:

provide health care services to people on Social Security.

The major objective of Medicaid is to:

provide health care services to those receiving public assistance.

The twin problems of the U.S. health care industry are:

rapidly rising costs and unequal access to health care

Insurance companies use deductibles and copayments to:

reduce health care costs by discouraging overuse of the health care system.

If an individual is less careful about avoiding accidents or illness because she has health insurance, this is an example of:

the moral hazard problem.

When the United States is described as having a dual system of health care, this means that:

those Americans with good insurance or substantial wealth receive world-class health care, while those without insurance receive no or low-quality health care.