A Mandatory Health Insurance Plan
1 Why is the idea that value depends on consumers’ preferences radical?
2 Mechanics usually have better information about how to fix automobiles than their customers do. What problems does this advantage create? Can mechanics or their customers do anything to limit these problems?
3 A mandatory health insurance plan costs $4,000. One worker earns $24,500 in employment income and $500 in investment income. Another worker earns $48,000 in employment income and $2,000 in investment income. A third worker earns $68,000 in employment income and $7,000 in investment income. A premium-based system would cost each worker $4,000. A wage tax–based system would cost each worker 8.5 percent of wages. An income tax–based system
obesity have increased costs by hundreds of bil- lions of dollars (Biener, Cawley, and Meyerhoefer 2017).
Discussion Questions • Why are prices so much higher in the United States?
• Why is the intensity of care higher in the United States?
• Should Medicare negotiate drug prices?
• Why does the history of health insurance matter?
• How does obesity increase costs?
