1.Medi-gap insurance policies, available in the private market, are designed to cover many expenses that Medicare does not cover. Can such policies lead to an inefficient amount of health care? Explain.
- Most private health insurance plans have out-of-pocket limits, which limit the total amount an insured individual must pay in any given year. For example, a plan may have a 10% copayment on all medical services and a $5,000 out-of-pocket limit. If an individual insured under that plan incurs $60,000 of medical expenses in one year, the individual will pay 10% of the first $50,000 ($5,000), after which the insurer will pay 100% of expenses. Medicare does not have an out-of-pocket limit. Suppose the government is considering adding an out-of-pocket limit. What are the advantages of doing so? What are the disadvantages of doing so?
- How are the providers of health care services to Medicaid recipients paid? Has this affected the health care experiences of Medicaid recipients? Explain.
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