Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. economics
  3. 1) demand for medical care and moral hazard: some

1) Demand for medical care and moral hazard: Some argue that providing full insurance for routine...

60.1K

Verified Solution

Question

Economics

1) Demand for medical care and moral hazard: Some argue thatproviding full insurance for routine mental health care will notsignificantly enhance social welfare and will lead to large socialloss from moral hazard.
a) Using a graph and a few sentences, explain why providingfull insurance for routine mental health care may lead to largesocial loss from moral hazard. Would you make the same argument foremergency mental health care? Explain in 1-2 sentences and show ona graph.
b) Suppose that instead of full insurance, the consumer had amental health insurance plan that
covers routine mental health care with a co-insurance rate of10%. Is this type of insurance plan likely to eliminate the socialloss from moral hazard? Explain why using a graph and 1-2sentences.
c) Using a graph and a few sentences, explain why providingfull insurance for routine mental health care may not enhancewelfare (e.g. increase a person’s total utility) much for a typicalconsumer. Would you make the same argument for emergency mentalhealth care? Explain why or why not in 1-2 sentences.

Answer & Explanation Solved by verified expert
4.2 Ratings (682 Votes)
Sol 1 aProviding Full insurance for routine mental health care maylead to large social loss from moral hazard as follows A person with a full insurance will likely to take expensivemedical care facility because the price for the medical carefacility for him is cheaper than before taking the medicalfacility As he will take the facility even it is not necessaryfor him which we called as social loss As in the    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

A standard iodate solution is prepared at 22.0 °C by dissolving 0.9123 g (uncorrected mass) of...

Chemistry
Q

A person presented with low back pain spreading along the distribution of S1 spinal nerve on...

Medical Sciences
Q

Achondroplasia is a dominant trait that causes a characteristic form of dwarfism. In a survey of...

Physics
Q

ng figure shows two blocks A and B pushed against the wall with a force...

Physics
Q

7 Peter Pantz invests 1000 in an account earning 7 3 annually How many years...

Algebra
Q

Tanya Williams is the new accounts manager at Southpac Bank. She has just been asked...

Accounting
Q

PB10-5(Algo) Recording and Explaining the Early Retirement of Debt [LO 10-3] ...

Accounting
Q

If a company, sells dog food and each bag cost $5 to produce with the...

Accounting
Q

pls help Required information Use the following information for the...

Accounting
Q

In class, we've looked at many examples of PCAOB reviews, where the auditor did not...

Accounting
Q

A corporation has 13,000 shares of 12%, $103 par noncumulative preferred stock outstanding and 24,000...

Accounting
Q

answer 23-31 FINC3310 Corporate Financial Management Dr. HJ. Abraham Lin Department of Finance...

Finance