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Mathematics & Economics
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Read Chapter 15 and comment on the following question: (Essay Sample)

One of the most significant policy changes in the United States in recent memory was the passage of the Affordable Care Act (ACA) in 2010 and the legal and legislative challenges that have followed. Do a quick search on the internet and read up on the basics of the law and then use the concepts of adverse selection and moral hazard to explain some of the features of the ACA. This discussion is particularly timely with the removal of the so-called individual mandate in 2019. source..
The Affordable Care Act (ACA) Name of the Student Institution Name Introduction This act (ACA) was passed to reduce the cost of health insurance for those who qualify, eliminating moral hazard and confusing dual selection. To help low-income people and families save money, the proposal's basic elements include premium tax rebates and efficiency improvements. Obama signed the Affordable Care Act, sometimes known as the Protection and Affordable Care Act after the 111th Congress passed it in 2010 (Schwarcz, 2017). The flow is a breakdown of medical insurance schemes whose coverage has been expanded to encompass an additional million Americans. Critique This legislation expanded medical eligibility, created a market for health insurance, and allowed children to remain on their parent's coverage until they aged 26. The premium credit tax reduces healthcare expenditures, which has resulted in lower thresholds and insurance prices. Perverse incentives and externalities are two more issues confronting the insurance industry. The individual is contacted because the insurance company knows the insurance provider's health status. Favorite phrases could be the source of the problem of unpleasant choices (Schwarcz, 2017). When there is asymmetric knowledge, the insurance provider may elect to enroll more unhealthy people in the insurance program, which would boost insurance premiums. People in good health will want to avoid buying insurance. As a result, more unhealthy people will be added to the insurance pool. It will have a negative influence on the insurance company's earnings. As a result, the risk is higher for both healthy people and this. The insurance sector can avoid the problem of bad selection caused by unequal information by undertaking routine medical checkups. People can also choose a basic insurance plan, which pays half of any medical bills directly and the other half through the health insurer. Regular medical checks enable health insurance providers to distinguish between healthy and unwell consumers. When estimating the typical person's insurance premium, an insurance company uses adverse selection because healthy people are more likely to be insured than sick people. This is because the individual will be much more aware of their wellness than the insurance provider, even if the insurance company receives the findings of a medical checkup (Schwarcz, 2017). To address the problem, the insurance company must boost insurance premiums. One of the most serious issues confronting the healthcare industry today is moral hazard, which stems from the fact that those with health insurance get sick more frequently than those without. Thi...
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