Ben Handel, Amitabh Chandra, and Jon Kolstad looked at the impact of a firm shifting its employees from a first-dollar coverage plan onto a high deductible health insurance plan (HDHP).

They compare the group moved to the HDHP (primary sample) to a market average (Truven). What type of agency problem is evident in this graph? Would this problem be solved by government provided health care? Explain in at most 3 sentences.

Individual Mean Spending 350 400 Dollars, CPI Adjusted 200 250 300 t_,m1 to.m1 tom6 Month Primary Sample Truven