The fact that most medical care purchases are financed through insurance

A) has no effect on health care consumption because aggregate costs are the same regardless of payment method.
B) reduces the amount of health care consumed by raising the price of additional units of care.
C) has decreased health care costs and therefore reduced aggregate health care expenditures.
D) increases the amount of health care consumed by reducing the price of additional units of care.

Question

Halla Jabaieh · Accepted Answer

Final Answer : D, Explanation :  When most medical care purchases are financed through insurance, it reduces the out-of-pocket cost for individuals, making them more likely to consume additional units of care. This is because the direct financial burden on the consumer is lessened, leading to an increase in consumption.

Definitions

Learning Objectives

Learning Objectives

Related questions