Many employers offer their employees a choice of plans, paying a fixed share of the cost of

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Many employers offer their employees a choice of plans, paying a fixed share of the cost of each. What inefficiencies does this introduce ? Some employers, such as Stanford University, have instead offered a fixed payment, regardless of the plan chosen, and have insisted that all programs offer identical coverage. Within three years, the cost of providing this standard coverage fell by 20 percent in real terms. Explain why this may have happened.

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Economics Of The Public Sector

ISBN: 9780393925227

4th Edition

Authors: Joseph E. Stiglitz, Jay K. Rosengard

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