What is the basic assumption underlying concept of a free market and how is it challenged by the theory of "bounded rationality?" (Mod 1.1) Rational customers will make informed decisions about value, quality and price, while producers who meet consumer's demands will be rewarded with market share and profit. What are economic benefits of a free market? (Mod 1.1) If an individual does not like their provider or health plan, the should be able to "vote with their feet" and select other options. This choice empowers customers, regulates producers and drives efficiency. Describe several ways the US Healthcare market does not function like a normal market. (Mod 1.1) Healthcare market has significant asymmetry in information between consumers, providers and insurers. Moral hazard is a problem because the marginal cost of covered care is zero, causing some to over consume medical care. List several recent initiatives in the US that purport (to claim, often falsely) to use market forces to increase efficiency in the healthcare system. (Mod 1.1) 1) Employers are offering more HDHPs with some as high as $10,000. 2) ACA is creating marketplaces that employ a form of managed competition where standardized health plans compete on cost and quality. 3) Public Medicaid and Medicare programs are moving towards requiring or making choices available for managed care products that structure care within provider networks. Indicate the approximate percentages of the population covered by major health programs. (Mod 1.2) Largest portion of Americans (48%) receive health insurance through an Employer, 16% through Medicaid, 15% through Medicare, 6% purchase insurance on their own How did ACA change Medicare? (Mod 1.2) ACA expanded Medicare's wellness and prevention benefits, improved prescription drug coverage and financed experiments to control health care costs by testing alternative payment methods and delivery systems. How did ACA change eligibility for Medicaid benefits? (Mod 1.2) ACA shifted program eligibility from category based (ex: single parents with dependents or people w/disabilities) to an income-based standard