Question
a. Consider government-provided health insurance, such as OHIP in Ontario, and government-mandated health insurance, such as Obamacare in the United States. Which problem are such
a. Consider government-provided health insurance, such as OHIP in Ontario, and government-mandated health insurance, such as Obamacare in the United States. Which problem are such programs intended to combat: adverse selection or moral hazard? Very briefly characterize the tradeoff between adverse selection and moral hazard as it relates to health insurance public policy.
b. Auto insurance policies often require deductibles and health insurance policies often require copayments. Which problem are such deductibles and copayments intended to combat: adverse selection or moral hazard? Very briefly explain how deductibles and copayments, respectively, address the two distinct channels through which this problem works.
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