This assignment asks you to do a basic analysis of a scenario in which you have been assigned a hypothetical income, expenses, and risk of illness. You wi. make a decision about buying hesilth insurance in the scenario, and to explain why you decided to buy (or not buy) health insurance. Purpose The purpose of this assignment, is for you to leam about economic incentives and budget constraints through experience with a realistic, but hypothetical, -scenario. Working through the activity, will also give you experience evaluating health policy, by examining how a change in pelicy changes incentives, and thereby affects your decisions and the decisions of your peers. In addition to practice working within a budget, this activity will get you to consider how people facing different constraints (like income and prices of necessities like rent) might make a different decision-this is useful in life now and beyond university. The activity creates an opportunity for you to learn about risk aversion and adverse selection (a source of health insurance market failure) in a trypothetical market foc health insurance. In doing so, this sets the groundwork for the next module--Market Fallure in Health irisurance. Scenario Say that, until now, you had health insurance provided for you- that could mean, for example. that you were covered by your parents' insurance. your. spouse's insurance, or Medicalid. However, you no longer have any health insurance coverage unless you buy it. You have been assigned a hypethetical Kenario describing your monthily income and expenses. You hive also been assigned a risk of becoming sick and the cost of health care should you become sick. Your scertarlo includes the following infocmation relevant for making decisions within your manthly budgeti - income (atter tax) - irnst fincludes utilitiest Say that, until now, you had health insurance provided for you-that could mean, for example, that you were covered by your parents' insurance, your spouse's insurance, or Medicaid. However, you no longer have any health insurance coverage unless you buy it. You have been assigned a hypothetica scenario describing your monthly income and expenses. You have also been assigned a risk of becoming sick and the cost of health care should you become sick. Your scenario includes the following information relevant for making decisions within your monthly budget: - Income (after tax) - rent (includes utilities) - food cost (and other necessities) - transport - cost of tuition - entertainment - health insurance premium - risk of getting sick each month - cost of health care IF YOU GET SICK The details of your scenario are described in the following tables. Your scenario assignment depends on the first lotfer of your last name Your scenario gives you a risk level (low, medium, or high), an income, and expenses. Your peers may have the same scenario as you, or a different ane You will need to use the details of your scenario to complete this activity. Table 1. Living Expenses (monthly) Firstletter of last name Income Rent + utilities Food Transport Tuition Entertain Savings N.B. Income is after tax income, You can allocate any amount within your budget to Entertainment or Savings, but you cannot find a cheoper apartment to rent an you are already careful about what you spend on food (so not much wiggle room there). Table 2. Scenario Details Pecotit " Part of the expentie would be paid by you + part by insure, lf youget tick. Guide that your premlum does NOT count toward your Out-ol pochef Masifruml. Schtol of Liberal Nrts Rhik Level is the probubility thot rou will set siok. Syitibus Supplement iUpui Academie 6. Student Suppert INSTRUCTIONS Powient Question 1. Rank Your Priorities \& Calculate your Expected Health Care Costs. Stument f.ngagnment (a) Rank your monttly expenses, Poster CStudent Kaptura My Meda orpertant first (1) and the item you are most wiling to ge mithout lant. For paimsie, 1. Hent $1.500:2. Fotd =$500; ete Ilased ea the information in year ucenario, calculate your expected tealth care coret WiTHout lrauracce. Question 1. Rank Your Priorities \& Calculate your Expected Health Care Costs. (a) Rank your monthly expenses, important first (1) and the item you are moit willing to go without the. For evample. 1. Fent =51.500, 2. Food =5500, elf Based on the information in your scenaria, calculste your expected heat care conts withour insurance. Expected health care costs Withour invurance - Rak $20.000 (b) Calculate your expected health care costs WITH insurance; Expected heath care costs With insurance = pisk x (inswed cost is att sid) Riak (deductible + i520000= deductale) 0.2 | Renemter that your poley has an out of pociet marimam. (c) Calculate Inwerance Premiums ptus your expected health care costs with inuranse. vour decision as to whether or not to bey isiorance: (d) Calculate your jetual health care costs WITH insurance if you Eet sick: Question 2. Add up your expenses. Using the information in your scenaria, add up your total experses, and calculate your income minus those expenses. What woald you declide to bey? If you bought health insurance. What did you have to give up to buy it that is, what would you have spent that money on if pout had not tooght heith insurance)? Question 3. Now there has been a health policy change. You must pay a fine of 5100 per month if and only y you do not buy heazth insurance. Would you purthase inatance onder the cow heats policy? in one sentence, oxplain why of why not. Submit your answers in text or as a file upload, This assignment asks you to do a basic analysis of a scenario in which you have been assigned a hypothetical income, expenses, and risk of illness. You wi. make a decision about buying hesilth insurance in the scenario, and to explain why you decided to buy (or not buy) health insurance. Purpose The purpose of this assignment, is for you to leam about economic incentives and budget constraints through experience with a realistic, but hypothetical, -scenario. Working through the activity, will also give you experience evaluating health policy, by examining how a change in pelicy changes incentives, and thereby affects your decisions and the decisions of your peers. In addition to practice working within a budget, this activity will get you to consider how people facing different constraints (like income and prices of necessities like rent) might make a different decision-this is useful in life now and beyond university. The activity creates an opportunity for you to learn about risk aversion and adverse selection (a source of health insurance market failure) in a trypothetical market foc health insurance. In doing so, this sets the groundwork for the next module--Market Fallure in Health irisurance. Scenario Say that, until now, you had health insurance provided for you- that could mean, for example. that you were covered by your parents' insurance. your. spouse's insurance, or Medicalid. However, you no longer have any health insurance coverage unless you buy it. You have been assigned a hypethetical Kenario describing your monthily income and expenses. You hive also been assigned a risk of becoming sick and the cost of health care should you become sick. Your scertarlo includes the following infocmation relevant for making decisions within your manthly budgeti - income (atter tax) - irnst fincludes utilitiest Say that, until now, you had health insurance provided for you-that could mean, for example, that you were covered by your parents' insurance, your spouse's insurance, or Medicaid. However, you no longer have any health insurance coverage unless you buy it. You have been assigned a hypothetica scenario describing your monthly income and expenses. You have also been assigned a risk of becoming sick and the cost of health care should you become sick. Your scenario includes the following information relevant for making decisions within your monthly budget: - Income (after tax) - rent (includes utilities) - food cost (and other necessities) - transport - cost of tuition - entertainment - health insurance premium - risk of getting sick each month - cost of health care IF YOU GET SICK The details of your scenario are described in the following tables. Your scenario assignment depends on the first lotfer of your last name Your scenario gives you a risk level (low, medium, or high), an income, and expenses. Your peers may have the same scenario as you, or a different ane You will need to use the details of your scenario to complete this activity. Table 1. Living Expenses (monthly) Firstletter of last name Income Rent + utilities Food Transport Tuition Entertain Savings N.B. Income is after tax income, You can allocate any amount within your budget to Entertainment or Savings, but you cannot find a cheoper apartment to rent an you are already careful about what you spend on food (so not much wiggle room there). Table 2. Scenario Details Pecotit " Part of the expentie would be paid by you + part by insure, lf youget tick. Guide that your premlum does NOT count toward your Out-ol pochef Masifruml. Schtol of Liberal Nrts Rhik Level is the probubility thot rou will set siok. Syitibus Supplement iUpui Academie 6. Student Suppert INSTRUCTIONS Powient Question 1. Rank Your Priorities \& Calculate your Expected Health Care Costs. Stument f.ngagnment (a) Rank your monttly expenses, Poster CStudent Kaptura My Meda orpertant first (1) and the item you are most wiling to ge mithout lant. For paimsie, 1. Hent $1.500:2. Fotd =$500; ete Ilased ea the information in year ucenario, calculate your expected tealth care coret WiTHout lrauracce. Question 1. Rank Your Priorities \& Calculate your Expected Health Care Costs. (a) Rank your monthly expenses, important first (1) and the item you are moit willing to go without the. For evample. 1. Fent =51.500, 2. Food =5500, elf Based on the information in your scenaria, calculste your expected heat care conts withour insurance. Expected health care costs Withour invurance - Rak $20.000 (b) Calculate your expected health care costs WITH insurance; Expected heath care costs With insurance = pisk x (inswed cost is att sid) Riak (deductible + i520000= deductale) 0.2 | Renemter that your poley has an out of pociet marimam. (c) Calculate Inwerance Premiums ptus your expected health care costs with inuranse. vour decision as to whether or not to bey isiorance: (d) Calculate your jetual health care costs WITH insurance if you Eet sick: Question 2. Add up your expenses. Using the information in your scenaria, add up your total experses, and calculate your income minus those expenses. What woald you declide to bey? If you bought health insurance. What did you have to give up to buy it that is, what would you have spent that money on if pout had not tooght heith insurance)? Question 3. Now there has been a health policy change. You must pay a fine of 5100 per month if and only y you do not buy heazth insurance. Would you purthase inatance onder the cow heats policy? in one sentence, oxplain why of why not. Submit your answers in text or as a file upload
