For Expert Researcher ONLY Assessment 2-4
Mr1970B
Assessment2-4TheMarketforHealthInsurance.docxThe Market for Health Insurance
Production Function
Identifies how various inputs can be combined and transformed into a final output.
Diseconomies of Scale
An increase in all inputs results in a less than proportionate increase in output. A state which occurs when long-run average costs increase to the point where inefficiency results.
Increasing Returns
Occurs when an increase in all inputs results in a more than proportionate increase in output.
Cost Function
A relationship that measures the total costs of a particular provision of services.
Community Rating
Applies when each member of an insurance pool pays the same premium per person or per family for the same coverage.
Adverse Selection
Exists when people with high risk health-related characteristics increase the total cost of health insurance provided.
Experience Rating
Occurs when insurance companies base premiums on past levels of payouts, which is often done for car or homeowners insurance.
Private Insurance
Usually supplied by providers for profit, although it can also be offered by public bodies or by nonprofit organizations.
Moral Hazard
Refers to the risk of an individual’s behavior being influenced by potential financial gain.
Managed Care Organizations
Groups providing coordination and delivery of services to improve quality and outcomes while containing costs. These types of plans typically involve contractual arrangements with providers, and enrollment on behalf of consumers.
Social Insurance
A plan in which taxpayers (either individual or corporate) fund health care services which are distributed by the government.
The Market for Health Insurance
Production Function
Identifies how various inputs can be combined and transformed into a final output.
Diseconomies of Scale
An increase in all inputs results in a less than proportionate increase in output. A state which occurs when
long
-
run average costs increase to the poi
nt where inefficiency results.
Increasing Returns
Occurs when an increase in all inputs results in a more than proportionate increase in output.
Cost Function
A relationship that measures the total costs of a particular provision of services.
Community Rat
ing
Applies when each member of an insurance pool pays the same premium per person or per family for the
same coverage.
Adverse Selection
Exists when people with high risk health
-
related characteristics increase the total cost of health insurance
provided.
Experience Rating
Occurs when insurance companies base premiums on past levels of payouts, which is often done for car or
homeowners insurance.
Private Insurance
Usually supplied by providers for profit, although it can also be offered by public bodies or by nonprofit
organizations.
Moral Hazard
Refers to the risk of an individual’s behavior being influenced by potential financial gain.
Managed Care Organizations
G
roups providing coordination and delivery of services to improve quality and outcomes while containing
costs. These types of plans typically involve contractual arrangements with providers, and enrollment on
behalf of consumers.
Social Insurance
A plan in
which taxpayers (either individual or corporate) fund health care services which are distributed
by the government.
The Market for Health Insurance
Production Function
Identifies how various inputs can be combined and transformed into a final output.
Diseconomies of Scale
An increase in all inputs results in a less than proportionate increase in output. A state which occurs when
long-run average costs increase to the point where inefficiency results.
Increasing Returns
Occurs when an increase in all inputs results in a more than proportionate increase in output.
Cost Function
A relationship that measures the total costs of a particular provision of services.
Community Rating
Applies when each member of an insurance pool pays the same premium per person or per family for the
same coverage.
Adverse Selection
Exists when people with high risk health-related characteristics increase the total cost of health insurance
provided.
Experience Rating
Occurs when insurance companies base premiums on past levels of payouts, which is often done for car or
homeowners insurance.
Private Insurance
Usually supplied by providers for profit, although it can also be offered by public bodies or by nonprofit
organizations.
Moral Hazard
Refers to the risk of an individual’s behavior being influenced by potential financial gain.
Managed Care Organizations
Groups providing coordination and delivery of services to improve quality and outcomes while containing
costs. These types of plans typically involve contractual arrangements with providers, and enrollment on
behalf of consumers.
Social Insurance
A plan in which taxpayers (either individual or corporate) fund health care services which are distributed
by the government.
