Question

Discuss the following – What feature(s) of Medicare would cause an economist to say that “Medicare stinks as insurance”? Medicare supplement insurance is available from the commercial market and most commonly covers ‘up-front’ deductibles and least commonly covers “high-end” risks. Does this model of coverage afford well or poorly with the model of demand for insurance ? What should we conclude from this?

Answer 1

The White House released a new estimate of the 10 - year cost of the Medicare prescription drug benefit. The bill comes to a whopping $ 720 billion. The habitually estimates which started off at $ 400 billion and then $ 530 billion force us to examine just what the bill does and is the prescription drug benefit is worth its eye - popping price tag. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 sets up a prescription drug benefits for senior citizens. The benefit starts next year when private firms will be able to offer senior citizens an annual prescription plan that is subsidized by the government. The benefit will cost $ 420 in premiums and up to $ 250 in deductibles. In turn, insurance will cover 75 percent of prescription drug costs up to $ 2,250. Between $ 2,250 and $ 3,600, there will be a gap, or a do nut hole, where no coverage is provided. Then for costs