Since Charles doesn’t pay the true cost of a doctor’s visit, he is likely to vis
ID: 1166972 • Letter: S
Question
Since Charles doesn’t pay the true cost of a doctor’s visit, he is likely to visit the doctor (Less , More) frequently than he would if he didn’t have health insurance. This issue in the health insurance market is known as (Adverse selection , Moral hazard).
3. Imperfections in the health insurance market Suppose Charles pays a monthly premium for health insurance through his employer. After paying the monthly premium, all subsequent medical costs, such as doctor's visits, would be paid for by the insurance. The cost of a doctor's visit without insurance is $450. Since Charles doesn't pay the true cost of a doctor's visit, he is likely to visit the doctor frequently than he would if he didn't have health insurance. This issue in the health insurance market is known as True or False: In part owing to such incentives, the United States pays more for health care, as a percentage of GDP, than other developed countries O True FalseExplanation / Answer
3.
Correct Answer:
More
Moral Hazard
Charles will visit more, because he has not to pay the cost in the form of doctor’s fee. It is the case of moral hazard as the cost of the action of Charles is paid by someone else (insurance company) in the given scenario.
Correct Answer:
True
Cost of Healthcare in the USA is highest among all the developed and OECD nations.