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a. On a market diagram illustrate the size of social loss with full insurance for outpatient visits. (Note outpatient visits are not perfectly elastically supplied.)
b. Suppose the insurer implements 25% coinsurance. On the same diagram add a line indicating the new demand curve with coinsurance. Illustrate the change in social loss.
c.Given that we can reduce social loss with coinsurance why don't we charge coinsurance for Medicaid?
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