1.Bernie Sanders has become a popular presidential candidate, in part, by advocating for a particular form of Medicare for All, one with zero premiums, deductibles, copays, and coinsurance.

a.Assuming the demand for all health services on average has an elasticity of -.25, and that Americans today pay about 15% of the cost of health care out of pocket at the point of service, how much would you expect total demand for health services to increase, on average, if Bernie's version of M4A comes into being?

b.Now think about the supply and demand tools you learned in this course so far, and Bernie's version of M4A coming into being.

i.Would market forces lead to pressure for price increases or price decreases for doctors, hospitals, and prescription drugs?

ii.Would taxes rise more or less than the rise in total health spending ?How do you know this?

c.Suppose Bernie decides to require all doctors and hospitals to accept Medicare payment rates for all patients, and that he lowers drug prices to OECD average levels.

i.Would that change your answer in b.ii? why?

ii.What would be some likely market consequences of such a set of requirements?In particular, think about specialist physicians and hospitals in less competitive markets now, and wait times for care.

d.Some would say that Bernie's M4A (with Medicare payment rates) and lower tax increases than many economists expect is possible only by imposing a rather large implicit tax on the health care delivery system.Explain why this may be true.

e.What would have to be true about physician and hospital supply curves, compared to today's supply curves, for the "implicit tax claim" to be false under a Bernie Sanders' presidency?What, if anything, could cause such a shift in supply curves, post-election?