Explain the effect of Federal tax policy on the cost of health insurance
What will be an ideal response?
Federal tax policy contributes to increased costs and demand for health care. Health insurance financed by employers is exempt from both Federal income and payroll taxation. This tax subsidy increases the demand for health care.
You might also like to view...
In the above figure, the long-run average cost curve exhibits constant returns to scale
A) between 5 and 10 units per hour. B) between 10 and 20 units per hour. C) between 20 and 25 units per hour. D) along the entire curve.
Automobile insurance companies have a problem with people who buy insurance and then drive recklessly or take less care to avoid losses after being insured. In other words, the automobile insurance market is subject to
A) moral hazard. B) adverse selection. C) asymmetric information. D) market signaling.