Possibly, the most serious flaw in the Medicare system is the fact that
a. the deductible is too high for most elders to afford.
b. it provides no real protection against catastrophic losses resulting from unusually long hospital stays.
c. the definition of an episode of illness can lead to patients paying the deductible more than once during the calendar year.
d. coverage for outpatient drugs is poor.
e. elders are required to pay monthly premiums to participate in Part B.
Question 2
Suppose a family has saved enough for a 10 day vacation (the only one they will be able to take for 10 years) and has a utility function U = V1/2 (where V is the number of healthy vacation days they experience). Suppose they are not a particularly healthy family and the probability that someone will have a vacation ruining illness (V = 0) is 30. What is the expected value of V?
a. 10
b. 7
c. 3
d. 0
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