Which of the Following Contributes to the Poor Performance of the Healthcare

question 227

Multiple Choice

Which of the following contributes to the poor performance of the healthcare industry?

• A) An increasing share of healthcare costs is paid for directly by consumers.
• B) The tax system discourages the purchase of healthcare through employers, while offering advantages to those who purchase healthcare plans directly.
• C) State regulations often force insurers to cover items such as in-vitro fertilization, drug rehabilitation, and marriage counseling, which drive up insurance costs.
• D) State regulations make it attractive for health insurers to provide only low-cost, catastrophic health insurance.

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Definitions:

Public Goods

Goods that are non-excludable and non-rivalrous, meaning that individuals cannot be effectively excluded from use and where use by one individual does not reduce availability to others.

Nonexcludable

A characteristic of a public good where no one can be prevented from using it.

Nonrival

A characteristic of a good or service whereby one person's consumption does not diminish the utility or availability for others.

Free-Rider Problem

A situation where individuals consume a public good without contributing to its cost, potentially leading to underproduction or depletion of that good.