Question 1: In 1986, the US federal income tax system changed marginal tax rates so that the top marginal rate fell from 50 to 33 percent. Given the way that fringe benefits are negotiated, what would you expect to happen to the demand for health insurance as a fringe benefit? Why?
Question 2: Suppose, as a worker, your health insurance currently allows you to buy whatever prescription drugs you wish for $2 per prescription. In contract negotiations it is proposed to change this benefit to "10-20", that is you pay $10 for generic drugs and $20 for name brand drugs. What would be your reaction by? What would ?economic analysis predict.
Question 3: Suppose that a company pays its workers $20 per hour and provides and additional $2 per hour worth of fringe benefits, including the basic health insurance policy. Discuss the firm's reaction to state mandate that requires it to expand the items covered in the health insurance policy. What is likely to happen to the number of people employed?
Question 4: Blue Cross plans typically have practiced community rating. If other insurance firms are seeking healthier patients at reduced rates, what impact will this have on Blue Cross net revenues? Why?
Why is selection bias such an important issue in measuring HMO performance?
Question 4: Discuss ways that managed care organizations provide lower-quality care that FFS plans? Evaluate this possibility from a societal perspective.
Question 5: Why is the growth of managed care plans a relatively recent phenomenon? Describe governmental policies and practices that have encouraged managed care organizations and inhibited them.