Course Wk #3 1 Government insurance 7 programs frequently involve a subsidy to c
ID: 1135069 • Letter: C
Question
Course Wk #3 1 Government insurance 7 programs frequently involve a subsidy to certain segments of society. To what extent do you feel that this is preferable to the provision of insurance on a subsidized basis through the mandatory participation pools operated by private insurers? 2) lt is generally agreed that unrestricted price competition among insurers could be detrimental to the public, yet some people argue that anti rebating laws represent an unnecessary restriction on price competition among insurance agents and that such laws should be repealed. What is your opinion?Explanation / Answer
1. Subsidy is a payment for something and is financial assistance. Government subsidy is available to some segments of the society. Some people cannot get access due to non-availability of subsidies. Private insurers can provide and help such people to access insurance provided government allows them to do so.
2. Price competition among insurers encourage them to improve service an efficiency. If the prices are restricted the there will be no competition and insurers will not show any interest to improve the service. Hence unrestricted price competition gives the customer chance to switch and insurers get a chance to improve.