lege X Student Home Page - LookingGl. X B Create Thread - (Active) Spring 2 x G Think about the Affordable Care x + sunyjefferson.edu/webapps/discussionboard/do/message?action=create&do=create&requestType=thread&course_id=_27460_1&nav=discussion. X U G E ... As we begin this discussion, let's keep in mind that we all act -even subconsciously- as if we are utility maximizers in our daily decision- making even though utility itself is completely subjective. So then, utility maximization becomes the underlying framework for much analysis. Many Americans receive government-subsidized medical care. The problem with giving something away is that a beneficiary consumes it to the point where the marginal value reaches zero, although the marginal cost to taxpayers can be sizeable. This is not to say that people derive no benefit from these programs. Although beneficiaries may attach little or no value to the final unit consumed, they likely derive a substantial consumer surplus from all the other units they consume. One way to reduce the cost to taxpayers without significantly harming beneficiaries is to charge a token amount-let's say, $1 per doctor visit. Beneficiaries would eliminate visits they value less than $1. This practice would yield significant savings to taxpayers but would still leave beneficiaries with abundant health care and a substantial consumer surplus. Also, a 10 percent increase in the average travel time to a free outpatient clinic might reduce visits. Another problem with giving something away is that beneficiaries are less vigilant about getting honest value, and this may increase the possibility of waste, fraud, and abuse. People would not tolerate padded bills and fake claims if they had to pay their own bills. Another source of inefficiency is the tendency of recipients to use the emergency room for nonemergency care (an emergency room visit usually costs the government much more than a visit to the doctor's office). Finally, program beneficiaries might have less incentive to pursue healthy behavior themselves through a good diet, sufficient exercise, and the like. All this does not mean that certain groups are not deserving of heavily subsidized medical care. The point is that when something is free, people consume it until their marginal value is zero, they pay less attention to getting honest value, they overuse the more costly emergency room, and they may do less personally to pursue a healthy lifestyle. NOTE: Think about the Affordable Care Act - government-provided health care for all U.S. citizens. Might charging a higher fee for an office visit or prescription co-pay be considered an excessive burden on beneficiaries? How might increasing fees offset the cost of medical care to State and Federal governments? What other changes might be beneficial to both beneficiaries and the government? [1] The Budget for Fiscal Year 201 1 Cancel Save Draft Submit Click Save Draft to save a draft of this message. Click Submit to submit the post. Click Cancel to quit. 10:49 PM 2/27/2020 IN O U
