Question: You are watching a television news story about the AIDS crisis with a friend Your friend says, "I think it is terrible that people infected with AIDS often can't buy health insurance. People who are ill are the ones that really need health insurance. Even worse, once someone gets health insurance, they often have to pay a deductible equal to 20 percent of the first $3,000 of their medical bills each year. Only then does the insurance company coyer the remainder of the medical bills."
How might public policy address the problems in the market for health insurance? What are some of the shortcomings of a public policy solution?