PH 122 FINAL EXAM QUESTIONS AND
ANSWERS 100% VERIFIED
Moral Hazard - ANSWER --Not about morals or hazards
--People make suboptimal decision because when they have insurance they do not face the
full cost of the insured event
--"Moral hazard" refers to the additional health care that is purchased when persons become
insured. Under conventional theory, health economists regard these additional health care
purchases as inefficient because they represent care that is worth less to consumers than it
costs to produce.
death spiral - ANSWER Death spiral is a condition of the insurance market in which costs
rapidly increase as a result of changes in the covered population. It is the result of adverse
selection in insurance policies in which lower risk policy holders choose to change policies or
be uninsured.
how to address death spiral - ANSWER --Excluding prior conditions
--Experience rating vs. community rating
--High risk pool
--Risk pool that come together for reasons other than health insurance
---- Mostly through employers
----Chamber of commerce
---- AARP
,Government subsidies for employer based insurance
To buy $1,000 of health insurance you have to earn: - ANSWER to earn $1,000 - because
there is no income tax on it.
Government subsidies for employer based insurance
To buy $1,000 of vacation you need to earn: - ANSWER --1000/(1-tax
rate)=1000/(0.70)=$1,428.57.
--Because for every $1 you earn, you get to keep only $0.70 after taxes.
Employer Based Insurance (2015)
Annual premiums: - ANSWER --Single $6,251 - workers share 1,071
--Family $17,545 - workers share 4,955
--81% of workers have a deductible:
1,318 - 1,836 for single coverage
, Trends - ANSWER --Premium increases:
-1999 - 2005 : 11% per year
-2005 - 2015 : 5% per year
--Deductibles:
--% of workers with deductibles and deductible size increased since 2010
---Faster than single premium
---Faster than wages inflation
Health Reform & The Patient Protection and Affordable Care Act of 2010 - ANSWER
-Individual and employer mandates
-No exclusions
-Premiums based only on 3 age categories, geography and smoking status
-Regulated Healthcare Market Places
-Exchanges
-10 Essential requirements for qualified health plans:
--Ambulatory, emergency and hospital care
--Acute, chronic, and preventive care
--Maternity, newborn, and pediatrics
--Mental health and substance abuse
--Prescription drugs
ANSWERS 100% VERIFIED
Moral Hazard - ANSWER --Not about morals or hazards
--People make suboptimal decision because when they have insurance they do not face the
full cost of the insured event
--"Moral hazard" refers to the additional health care that is purchased when persons become
insured. Under conventional theory, health economists regard these additional health care
purchases as inefficient because they represent care that is worth less to consumers than it
costs to produce.
death spiral - ANSWER Death spiral is a condition of the insurance market in which costs
rapidly increase as a result of changes in the covered population. It is the result of adverse
selection in insurance policies in which lower risk policy holders choose to change policies or
be uninsured.
how to address death spiral - ANSWER --Excluding prior conditions
--Experience rating vs. community rating
--High risk pool
--Risk pool that come together for reasons other than health insurance
---- Mostly through employers
----Chamber of commerce
---- AARP
,Government subsidies for employer based insurance
To buy $1,000 of health insurance you have to earn: - ANSWER to earn $1,000 - because
there is no income tax on it.
Government subsidies for employer based insurance
To buy $1,000 of vacation you need to earn: - ANSWER --1000/(1-tax
rate)=1000/(0.70)=$1,428.57.
--Because for every $1 you earn, you get to keep only $0.70 after taxes.
Employer Based Insurance (2015)
Annual premiums: - ANSWER --Single $6,251 - workers share 1,071
--Family $17,545 - workers share 4,955
--81% of workers have a deductible:
1,318 - 1,836 for single coverage
, Trends - ANSWER --Premium increases:
-1999 - 2005 : 11% per year
-2005 - 2015 : 5% per year
--Deductibles:
--% of workers with deductibles and deductible size increased since 2010
---Faster than single premium
---Faster than wages inflation
Health Reform & The Patient Protection and Affordable Care Act of 2010 - ANSWER
-Individual and employer mandates
-No exclusions
-Premiums based only on 3 age categories, geography and smoking status
-Regulated Healthcare Market Places
-Exchanges
-10 Essential requirements for qualified health plans:
--Ambulatory, emergency and hospital care
--Acute, chronic, and preventive care
--Maternity, newborn, and pediatrics
--Mental health and substance abuse
--Prescription drugs
