Income, Risk, and Consumer Demand for Healthcare, assignment help

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This is the assignment which I already answered the questions but I needed an intro and conclusion per the professor.

Income, Risk, and Consumer Demand for Healthcare

1.The depreciation of capital good is a cost of society because time and money are essential if the revenue brought in covered its opportunity cost of capital and the depreciation.A person’s health may depreciate as certain joints may wear out, certain organs may function less well than before, or we may become more forgetful.

2.Older people’s healthcare expenditures increase in the Grossman model due to health stock which may depreciate faster during some periods of life and more slowly during others.

3.Three factors that might increase an individual’s marginal efficiency of investment in health capital include: 1) obesity; 2) income; 3) education

4.A relatively small deductible will have no effect on individual usage.A large deductible makes it more likely that individuals will self-insure and consume the amount of care they would have purchased with no insurance.

5.People willingly buy insurance, taking on additional costs to themselves, to protect against the risk of possibly substantial losses.

Insurance policies impose increased costs on society because they lead to increased health services expenditures in several ways:

  • Increased quantity of services purchased due to decreases in out-of-pocket costs for services that are already being purchased;
  • Increased prices for the services that are already being purchased;
  • Increased quantities and prices for services that would not be purchased unless they were covered by insurance; or
  • Increased quality in the services purchased, including expensive, technology-intensive services that might not be purchased unless covered by insurance.Any procedures that raise the coinsurance rate will tend to reduce the costs of excess insurance but also will reduce the benefits of decreased risk bearing.6.People who buy lottery tickets are aware of the chances that they may or may not have the winning numbers but frequently take that chance.Similar to people who purchase health insurance are aware that they may or may not have an existing condition but want to make sure they have coverage in the event the need arises to cover the treatment for those healthcare issues.Some people with pre-existing conditions take the chance of searching for insurance that may cover their conditions and often have to deal with the realization that the company won’t cover them due to the high payouts.

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