Health Econ Final Exam 2023 with quality solutions
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Course
Health Econ Fi
Institution
Health Econ Fi
What is the hallmark of the American Model of health insurance? correct answersIt is a mix of private and public insurances:
private insurance is typically obtained from employers
public insurance is provided to vulnerable subpopulations
T/F: Employer-sponsored health insurance is free to emp...
Health Econ Final Exam
What is the hallmark of the American Model of health insurance? correct answersIt is a mix of private and public insurances:
private insurance is typically obtained from employers public insurance is provided to vulnerable subpopulations
T/F: Employer-sponsored health insurance is free to employees. correct answersFALSE, it is a part of the worker's total compensation package and the cost of the premiums is taken out of the worker's wages
What are the two consequences of employer-sponsored health insurance? correct answers1. wage pass-
through
2. job lock
What is wage pass-through? correct answersWage pass-through is the costs of insurance coming out of the worker's wages
For the same type of job and skill-level, a job without employer-sponsored health insurance plans will offer a (higher, lower) wage than a job with them correct answershigher
What is the advantage of wage pass-through for employees? correct answersthis part of their wage is tax-free
Employer-sponsored insurance limits adverse selection by __________ correct answerspooling employees together
i.e. healthy employees subsidize unhealthy coworkers and premiums are lower due to presence of healthy employees in the pool
Firms sometimes want to charge sicker employees more than healthy ones, how might they do that (2 primary ways)? correct answers1. Larger wage pass-through for the sick than for the healthy
2. Offering different health plans for employees to self-select into according to health status T/F: Passing lower wages through to sicker workers is illegal in the US. correct answersTRUE
T/F: Information asymmetry between employers and employees will lead to differential wage pass-
through. correct answersFALSE, there must NOT be information asymmetry for differential wage pass-
through
Is there evidence that people who have higher expected medical expenditures earn less than their healthier counterparts? correct answersYes
What are the two most common examples of wage pass-through in the US? correct answersMaternity benefits: women of childbearing age earn less compared to men due to maternity care coverage being required by law
Obesity: obese individuals earn much less than their thin coworkers
What is job lock? correct answersJob lock is the confluence of employer-sponsored health insurance, wage pass-through, and sticky wages
Job mobility is hindered by employer-sponsored health insurance causing people to stay in jobs where they may be less productive than they could be
T/F: In the 1985 COBRA act, it was mandated that employees must be allowed to keep their health coverage up to 18 months after leaving their job with the employee covering 100% of the premium costs. correct answersTRUE
T/F: Medicaid increases economic efficiency. correct answersFALSE, it reduces economic efficiency by creating a disincentive to work as hard as possible because rising incomes could mean disqualification from Medicaid
What is the Medicaid notch? correct answersThe point at which a worker becomes ineligible for Medicaid (L1), therefore causing their assets to drop due to the loss of Medicaid benefits, they would have to work up to a certain point above that (L2) to match the assets they had prior to losing Medicaid benefits What is managed care? correct answersManaged care is a set of tactics intended to reduce moral hazard,
physician-induced demand, and premiums
T/F: Fee for service does little to contain moral hazard. correct answersTRUE
T/F: Fee for service provides no incentive for physician-induced demand. correct answersFALSE, FFS provides a great incentive for physician-induced demand
What is Fee-for-Service? correct answersFee-for-Service is when the insurance company pays the doctor or hospital a fee for each service provided
What are the five tactics of managed care (describe each one)? correct answers1. Gatekeeping: patients can only see specialists after referal from their PCP
2. Coverage networks and vertical integration: patients can only see providers within the insurance company's network, in vertical integration, the insurance company employs those providers
3. Monitoring: doctors and hospitals are monitored for costs and health outcomes
4. Salaries and fixed payments: insurers pay a fixed amount for care, i.e. capitation
5. Denials of coverage: care that is not cost-effective may not be covered
What is the most extreme version of a manged care organization? correct answersVertical integration is the most extreme version of managed care.
Managed care patients are (more, less) often hospitalized and use (more, less) expensive technologies. correct answersless, less
Through what means does managed care reduce health care expenditures? correct answers1. negotiating price reductions or seeking low-cost providers
2. reducing quantities of care consumed through utilization review and payment type
3. reducing the rate of costly technology adoption
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