ECON 1201 Lecture Notes - Lecture 17: Health Insurance Mandate, Opportunity Cost, Risk Pool
ECON 1201 – Lecture 17 – Economics of Health Care Cont./Production and Costs
How do you ‘signal’ in a world of asymmetric information?
• Adverse selection insurance pool
• Moral hazard within people’s economic incentives
• PPA – very complicated bill
• Economic perspective of American healthcare issue
o Under-coverage
▪ Relatively small penalty compared to insurance premiums
▪ Not enough healthy in risk pool to subsidize those who need health
insurance
o Over-expenditure
Over Expenditure Issue
• Issues arise because third party payer system
• Avenues for insurance companies to receive more from the government
Peacemeal Dismantling of the ACA
• Dismantling of the ACA state by state
• Individual mandate tax penalty eliminated
o No incentive to sign up for healthcare
Elimination of Subsidies
• For buyers of health insurance and subsidies to insurers themselves to provide cheaper
insurance
• Insurance market meltdown – adverse selection makes pool smaller and in turn raises
the price of premiums
Canada
• Single payer system
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ECON 1201 Full Course Notes
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Document Summary
Econ 1201 lecture 17 economics of health care cont. /production and costs. Issues arise because third party payer system: avenues for insurance companies to receive more from the government. Peacemeal dismantling of the aca: dismantling of the aca state by state. Individual mandate tax penalty eliminated: no incentive to sign up for healthcare. Elimination of subsidies: for buyers of health insurance and subsidies to insurers themselves to provide cheaper insurance. Insurance market meltdown adverse selection makes pool smaller and in turn raises the price of premiums. Canada: single payer system, prohibited private insurance, people sued accusing of violating human rights because of long wait times, wait times have improved since. Pharmac: government agency in new zealand, have to make choices on buying drugs (costs) England: make decisions to approve or purchase drugs based on quality adjusted life years. Problem: resources are finite, unlimited number of ways to spend the resources, medical decisions become politicized.
