Article Summary
The Center for Medicare and Medicaid Services (CMS) projects that between 2014 and 2022, over $2.7 trillion will be spent for private insurance overhead and administering government health programs, including more than $270 billion in new administrative costs for the Affordable Care Act, which averages to $1,375 per newly insured person every year, or almost one-quarter of the total federal government expenditures for the program. Government programs account for over $100 billion of the increase in overhead, and most of that will go to private Medicaid HMOs, which will account for 59 percent of total Medicaid administrative costs in 2022.
Source: David Himmelstein and Steffie Woolhandler, " The Post-Launch Problem: The Affordable Care Act's Persistently High Administrative Costs," healthaffairs.org, May 27, 2015.
Refer to the Article Summary above. The article discusses the rising administrative costs of health care. Even if private insurance companies were more efficient and brought administrative costs down, consumers would still pay less than the full cost of medical treatment. This would result in the market equilibrium price of medical services being ________ than the efficient equilibrium price, and the market equilibrium quantity of medical services being ________ than the efficient equilibrium quantity.
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less; less
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greater; greater
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greater; less
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less; greater
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