If the government decides to subsidize health insurance (like Obamacare), what subsidy will achieve the efficient coverage?

The marginal cost of health insurance is a constant $8,000 a year and the figure shows the marginal benefit and willingness and ability to pay curve. Suppose that the marginal social benefit of insurance exceeds the willingness and ability to pay by a constant $2,000 per family per year.

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FIGURE 16.6 Problems 20 to 22 12 10 D = MB 10 20 30 40 50 Quantity (millions of families insured) Premium (thousands of dollars per year) 2.