ECON 4000 – Poverty and Health Insurance

| February 14, 2018

Assignment 11 Due
5.17. Please Type. Poverty and Health
Insurance

1. Poverty in the USis defined as having insufficient
resources to meet one’s basic needs.
A. In your view, what are the five most
important basic needs?
B. Did you include health care/medical care
among them? Explain why or why not.
C. Two interesting poverty concepts for
policy purposes are the “pre-transfer” poverty rate and the “post-transfer”
poverty rate.
The pre-transfer rate tells us what % of
people would be poor based on their family’s “market” income (mostly labor
market earnings).
The post-transfer poverty rate tells us
what % of people would be poor based on their family’s market income PLUS
government benefits they receive.
i. Why might we be interested in the
pre-transfer poverty rate?
ii. Why might we be interested in the
post-transfer poverty rate?
iii. Suppose the pre-transfer poverty rate
is 23% and the post-transfer poverty rate is 11%. How would you interpret the
difference between the pre-transfer and post-transfer poverty rate (of 12%)?
iv. (somewhat challenging): What
assumptions are you making in your answer to part iii? Explain.

D. No current US poverty measure currently
includes health insurance benefits provided by government (Medicaid, Medicare,
etc.) or by employers as part of a family’s income.
i. Given your answers to part A and B, is
this exclusion problematic for measuring poverty?
ii. What are the implications of this
exclusion for evaluating the impact on poverty of the Affordable Care Act
(which resulted in greatly expanded eligibility to the poor for Medicaid in
more than half the states and subsidies for low-income families to purchase
insurance nationally)?

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