ECON 1051 1nd Edition Lecture 15 Outline of Last Lecture I. Consumer Surplus and Demand Curve Outline of Current Lecture I. Five Ways ACA is Helping Market II. Health Facts in the US III. In Comparison IV. Issues Insurance Companies Face V. Externalities Current LectureI. Five Ways ACA is Helping Market a. It puts money into families pockets i. Brings down unemployment levels b. Helps slow growth of health care costs i. This boosts hiring in near term and increases paychecks c. Reduces long term deficit i. It has reduced the deficit by $109 billion so far d. Reduces “job lock” i. Some people don’t want to leave their jobs for fear of giving up their heath insuranceii. Encourages job mobility and entrepreneurship e. Improves financial security in the face of illness II. Health Facts in the USa. Life expectancy i. 18501. 38.3 yearsii. 2015 1. 78.9 years b. Height i. 1850 These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.1. 5’7”ii. 2015 1. 5’9”c. The gap issue:i. Some people make too much money to qualify for Medicaid but not enough for insuranceii. There are 24 states with this issue1. Missouri is one of the thema. Voted down Medicaid expansionIII. In Comparison a. Canada i. Single-payer health care systemb. Japani. Universal health careii. Citizens can either enroll in non-profit insurance or use the government provided insuranceiii. Long life expectancy c. UKi. Doctors are paid by the government so people seeking health care aren’t turned away d. Types of systems: i. Fee-for-service1. Doctors/hospitals receive a fee for each service providedii. HMOs1. Flat rate fee for patients2. Doesn’t allow for people to be turned away (for lack of insurance/money)IV. Issues Insurance Companies Face a. Adverse Selectioni. One party to a transaction takes advantage of knowing more than the other party to the transaction 1. Insurance faces this because sick people are more likely to want insurance than healthy peopleb. Moral Hazard i. The actions people take after they have entered into a transaction that makes the other party to the transaction worse off c. Principal-Agent Problemi. A problem caused by agents pursuing their own interests rather than the interests of the principals who hired themd. To deal with these issue insurance companies use deductibles and co-pays to reduce adverse selection and moral hazard problemsV. Externalitiesa. Positive Externalities i. Vaccinationsii. Prevent communicable disease b. Negative Externalities i. Obesity ii. Those who are not obese must pay for those who
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