1) How might employers respond to the existence of health care exchanges under t
ID: 1112195 • Letter: 1
Question
1) How might employers respond to the existence of health care exchanges under the Affordable Care Act
A) Large employers with more than 1000 employees may continue to drop health insurance coverage because coverage offered by these firms has been declining over the past 10 years
B) More small employers with fewer than 50 employees will offer health insurance coverage in the future than today because they will otherwise face a financial penalty
C) Small employers with low income workers may stop offering health insurance coverage because their employees can obtain subsidized coverage through health exchanges
D) Only small employers located in areas with state-run health insurance exchanges will stop offering health insurance coverage because their employees can obtain subsidized coverage through the exchanges
2) Which of the following statements about the Patient Protection and Affordable Care Act (ACA) is true
A) The ACA will dramatically change how and where employed people get health insurance
B) The ACA places price ceilings on hospitals and physician fees
C) The ACA provides incentives for individuals to buy insurance and for business to offer insurance.
D) All of the above are true.
3) One of the reasons that having an insurance coverage is made mandatory in the ACA is to
A) Reduce instances of moral hazard, which may occur from healthier people selecting themselves out of the insurance pool.
B) Reduce instances of adverse selection, which may occur from healthier people selecting themselves out of the insurance pool.
C) Reduce instances of moral hazard, which may occur from healthier people selecting themselves into the insurance pool.
D) Reduce instances of adverse selection, which may occur from healthier people selecting themselves into the insurance pool.
4) Theoretically, an expansion of the dependent coverage from age 18 to 26, a part of the ACA, can lead to
A) A reduction in premium in the long run by adding healthier populace into the pool
B) An increase in premium in the long run by adding healthier populace into the pool
C) A reduction in moral hazard in the long run by adding healthier populace into the pool
D) A reduction in moral hazard in the short run by adding healthier populace into the pool
5) ACA majorly uses all the provisions listed below to increase insurance coverage in the U.S. except:
A)Medicaid
B) Medicare
C) Employer mandate
D) Individual mandate
A) Large employers with more than 1000 employees may continue to drop health insurance coverage because coverage offered by these firms has been declining over the past 10 years
B) More small employers with fewer than 50 employees will offer health insurance coverage in the future than today because they will otherwise face a financial penalty
C) Small employers with low income workers may stop offering health insurance coverage because their employees can obtain subsidized coverage through health exchanges
D) Only small employers located in areas with state-run health insurance exchanges will stop offering health insurance coverage because their employees can obtain subsidized coverage through the exchanges
Explanation / Answer
1. Option C.
The small employers now would not face any financial penalties for not offering coverage and they do not necessarily have to provide it in order to attract workers.
2. Option C.
Obamacare focussed on increasing the coverage of the entire population of the country. It provided incentive to the employers to employers to offer employees and those without an employer shall purchase at a lower cost.
3. Option B
Adverse selection of not getting themselves insured, so low premiums are set to cover a larger set of population.
4. Option C.
Moral hazard is the incentive not to guard against risk when insured by an insurance. When there is healthier population, there would be less moral hazard.
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