Provide bigger effective health insurance subsidies

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1a. Describe three of the most important, different factors that determine by how much an approximately pay-as-you-go pension system like US Social Security (SS) reduces personal saving. Explain why and in what way each of these factors matters.

b. Answer this problem in ordinary English understandable by someone who has studied principles of microeconomics, but not taken this course. Explain why having a pension system like US SS is likely to reduce personal saving, but not by more than 20%.

2a. How do the sizes of the effective US subsidies for health insurance vary on average with the subsidy recipients' ages and incomes? For each effective subsidy that is not a direct payment or a provision of service, explain why it is an effective subsidy.

b. Describe three of the most important factors supporting the claim that it is socially efficient to provide bigger effective health insurance subsidies for people with low income than for people with higher income.

Reference no: EM132689628

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