Consider how health insurance affects the quantity of health care services performed. Suppose that the typical medical procedure has a cost of $120, yet a person with health insurance pays only $20 out of pocket. Her insurance company pays the remaining $100. (The insurance company recoups the $100 through premiums, but the premium a person pays does not depend on how many procedures that person chooses to undergo.)
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Consider how health insurance affects the quantity of health care services performed. Suppose that t...
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