Can the Ills Be Cured?

In: Other Topics

Submitted By scheek555
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Good health plays a key role in determining the quality of our lives. However, proper treatment is expensive and it requires specialized skills.

Suppose the government were to enact universal coverage with $2,500 deductibles. What problems would that policy solve? What problems would it cause?

First, the problem would be for those less fortunate. They would not have the means to pay the deductibles. Secondly, we would all be in the same group. Simply put, we would all have the same coverage regardless of health conditions. More importantly, the policy would cause moral hazard. According to Collinge & Ayers (2004), “moral hazard lowers the price of healthcare for patients and thus causes the quantity demanded of healthcare to exceed the efficient quantity.” In contrast, the policy would save the government a lot of money. They would no longer provide Medicaid for the poor or Medicare for the elderly (Collinge & Ayers, p. 213).

One of the most significant costs of modern medicine involves malpractice insurance. Should the government limit the amounts that juries are allowed to award victims of medical malpractice, so as to reduce malpractice insurance premiums and thereby lower healthcare costs?

Limiting the amount juries are allowed to award a victim can impede their ability to care for themselves financially. Would you want your award limited to $15,000 and you were left paralyzed for the remainder of your life, resulting in not being able to earn a living? The amount of awards should be based on the situation. In addition, if the government were to enact universal coverage, there would likely be a rise in medical malpractice due to a decline in physician competition and patient surplus for those healthcare providers in demand.

References

Collinge, R.A., & Ayers, R.M. (2004). Economics by Design: Survey and Issues, Third…...

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