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Barry met with his company's benefit manager to sign up for the health insurance provided through his employer. He had worked for the firm for

Barry met with his company's benefit manager to sign up for the health insurance provided through his employer. He had worked for the firm for over 2 years, but was one of many who chose not to take the offer to participate in the plan, because he considered his share of the premiums too expensive. In the intervening interview the subject turned to pre-existing conditions. Yes, Barry's wife was eight months pregnant. Yes, he wanted insurance to cover the expenses of the impending childbirth (expected to cost $10,000). Barry was incredulous when he found out that there was a 90 day waiting period before any preexisting condition could be covered. "Well, something is reallywrong with this country if you can't even buy insurance when you need it."

  1. Is Barry justified in his criticism?
  2. What is the purpose of insurance? Is Barry looking for insurance in this instance? What is he looking for?
  3. Why doesn't insurance cover preexisting conditions?
  4. Using the appropriate terminology explain how the ACA deals with pre-existing conditions? Does it work?

  1. It has been argued that medical practitioners have the ability to generate demand for their own services.
    1. What is the theory behind this hypothesis?
    2. What assumption of the perfectly competitive model must be violated?

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