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Chapter 20 - The Economics of Health and Healthcare, 7/E

University of Louisville
Uploaded: 5 years ago
Contributor: Dennisronja
Category: Economics
Type: Solutions
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Filename:   Folland_EHHC7_CH21_IM.doc (76 kB)
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Credit Cost: 1
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Last Download: 2 years ago
Description
Contains multiple choice questions @ the end!
Transcript
Chapter 21 – Social Insurance Key Ideas Social insurance and private insurance are different. Private insurance develops to protect its purchasers against risk. Social insurance, provided through taxes or regulations, addresses particular needs of those who may require resources due to poverty, old age, disability, health problems, or unemployment. Comprehensive health insurance programs started in Western Europe in the late nineteenth century. Medicare and Medicaid began in the United States in the 1960s. Medicare relates fundamentally to health care for the elderly, whereas Medicaid focuses on health care for the poor. Medicare and Medicaid have accompanied improvements in access to care by the lower—income population, as evidenced by higher utilization rates, both absolutely and relative to higher income groups. Teaching Tips This is another good place to introduce students to important websites regarding social insurance. The Centers for Medicare and Medicaid Services web site is _www.cms.gov/_. The Social Security Administration web site is _www.ssa.gov/_. Both of them provide up to date information on the programs, including program features (benefits and expenditure limits), as well as research on the systems. Policy-makers in the United States have debated the appropriateness of privatizing at least part of the system through individual investments. Discussing this in class may clarify the distinction between social insurance and investments. Figure 21-4 looks at the economics of state participation in Medicaid. It shows how social programs may desirable even if they constrain individuals or governments to purchase more of good than they might have otherwise preferred. Figure 21-7 looks at the economics of “crowd-out.” It is a subtle application using indifference curves with nonlinear budget constraints and “corner solutions”. Instructors may want to work through it carefully with less sophisticated students. Chapter 21 – Social Insurance – Multiple Choice Social insurance originated in ____, focusing on _____: the United States; elderly. Germany; the unemployed.* Egypt; the poor. France; the disabled. Under the Patient Protection and Affordable Care Act, passed in 2010: all residents will get health insurance by 2013. all residents will get health insurance by 2016. about 32 million of the 50 million uninsured (in 2010-2011) will be get health insurance by 2020.* there is no firm timetable for universal health insurance. Among social insurance programs in the United States, Medicare refers most often to the _____ and Medicaid to the ____: elderly; poor.* poor; elderly. disabled; homeless. disabled; elderly. Between 1965 and 2010 the number of Medicare beneficiaries. more than tripled. more than doubled.* increased by a factor of ten. remained constant. Between 1970 and 2009 (in constant dollars), Medicare outlays grew by a factor of ____ while Medicaid outlays grew by a factor of ____. 2.1; 4.5. 4.7; 4.9. 8.5; 12.4. 10.8; 11.8*. The elderly often buy “Medigap” insurance because: Medicaid does not pay all of their expenses. Medicare is not available to all of those in the Social Security system. Medicare Parts A and B do not pay all of their expenses.* answers (a) and (b) are correct. Medicare Advantage Programs refer fundamentally to _____ programs. poverty-related pharmaceutical chronic illness managed care* Medicare Part D provides improved coverage focusing on ________. nursing home care. pharmaceutical expenditures.* chronic illness. managed care. Medicare Part D helps the elderly by: covering all pharmaceutical expenditures with a constant copayment. negotiating lower payments with the pharmaceutical manufacturers. Providing extensive coverage at low levels and high levels of drug expenditures.* Answers (a) and (b) are correct. The Medicare Part D “doughnut hole” means that: diet plans are not covered. at a specified level of expenditures, the consumers’ incremental share jumps to near 100 percent.* the costs will put the system in financial jeopardy. Answers (a) and (b) are correct. Medicaid programs: are uniformly administered across all of the states. vary in eligibility standards among the states.* represent entitlements, available to all who qualify. Answers (a) and (b) are correct. Medicaid is particularly attractive to the states because: it provides additional funds for the purchase of services for the poor. it effectively lowers the price per unit of medical care to the poor. it increases the size of state governments. Answers (a) and (b) are correct.* Figure 21-4 shows that one way that Medicaid may be less attractive to the states than a simple monetary block grant: it forces them to help pay for those who are dually-enrolled in Medicare. it forces them to provide more services per person than they might otherwise choose.* it increases the sizes of state bureaucracies. it limits the reimbursement to physicians. In 2010 and 2011, some states scaled back their Medicaid programs, or considered withdrawing because: they found widespread fraud in the programs. physicians were refusing Medicaid clients. they found nursing home payments to be onerous. budget troubles made it difficult for them to pay their match.* Within the past 20 years Medicaid has increasingly become the source of payment for: pharmaceuticals. children. long-term nursing home care. answers (b) and (c) are correct.* “Crowd-out” refers to a situation in which program benefits: lead recipients to replace private insurance with public insurance.* lead recipients to replace public insurance with private insurance. cause long waiting lines for services answers (b) and (c) are correct. “Take-up” refers to a situation in which: previously insured households drop their insurance. additional households move to a location to take advantage of a program. previously uninsured households become insured.* households stop working in order to qualify for benefits.  Referring to the diagram above, suppose that UA and UB represent the preferences of Persons A and B for health insurance and all other goods. If I0 represents the minimum coverage available: both will buy the minimum insurance. Person A will buy more than I0 and Person B will be uninsured.* Person A and Person B will both buy health insurance. Person A will buy the minimum insurance and Person B will be uninsured. Referring to the diagram above, suppose that UA and UB represent the preferences of Persons A and B for health insurance and all other goods. If Medicare offers insurance package Z: both will buy package Z. Person A will be crowded out of private insurance and Person B will take up the Medicaid. both will be crowded out of private insurance. answers (a) and (b) are correct.* Referring to the figure below, increased insurance coverage (more recipients and more generous coinsurance) leads to a shift from: point A to point B and a decrease in health expenditures. point A to point B and an increase in health expenditures.* point B to point C and an increase in health expenditures. point A to point C, and a decrease in health expenditures. Davis and Reynolds found that public assistance related to Medicare and Medicaid _____ health care utilization for recipients relative to those who did not receive public assistance. increased.* decreased. had no impact on. accelerated. Analysts who have studied universal health care have determined that the incremental costs may not always be as high as people would expect. This is because: most people will not use the care provided in universal health care plans. many who do not have health insurance already consume health care.* universal health insurance plans would not cover all of the poor. answers (a) and (b) are correct. Many expect Medicare costs to rise as a proportion of GDP because: the costs of health care services are expected to rise. an increasing portion of the population will be in the Medicare program. new technologies are expensive. Answers (a), (b), and (c) are correct.* Currie and Gruber have found that Medicaid programs often lead to improvements in measures of health such as infant mortality rates. They tend to be expensive, however leading to questions of program viability as measured by: cost-benefit ratios. economic efficiency. cost-utility analysis cost-effectiveness.* Analysts expect the total number of Medicare beneficiaries is expected to rise between the years 2010 and 2040, by approximately __________ million people. 14. 21. 37. 40.* By 2040 the expected number of Medicare beneficiaries will likely be: as large as it was in 1970. twice as large as it was in 1970 four times as large as it was in 1970* ten times as large as it was in 1970 By 2030, Medicare is projected to equal ______ percent of the GDP. _____ percent of this total is projected to be the Prescription Drug Benefit. 4.4; 20 4.9; 5 5.2; 20 * 5.9; 30. Analysts believe that Medicare’s share of GDP will rise because of: increased numbers of beneficiaries. increased costs per beneficiary. fraud in the Mediare system. Answers (a) and (b) are correct.* Analysts believe that in the economic downturn of 2000-2003: the number of uninsured did not change much because people bought more private insurance. the number of uninsured did not rise much because employers provided more health insurance. Medicaid take-up provided insurance for many who would have otherwise gone without insurance.* many households voluntarily reduced their health insurance. The Hawaii’s Keiki (Child) Care insurance program was halted because. the program apparently crowded out other insurance coverage. the program turned out to be too expensive. there was extensive fraud in the program. Answers (a) and (b) are correct.*

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