Q. Adverse Selection also the Individual Mandate also The Requirements to Buy Coverage under the Affordable Care Act. Use the data in the table below when indicated. The table assumes four potential health insurance populations (groups) in the US. These groups have the following population sizes also expected average annual healthcare costs per capit1)

Level of Health Population Average healthcare cost per capita
Very Healthy 1,000,000 $2,000
Moderately Healthy 500,000 $4,000
Moderately Unhealthy 300,000 $10,000
Very Unhealthy 200,000 $20,000

You will now Elucidate how the death spiral in a free market for insurance that allows for consumer choice. Use data in the table. Assume there is no individual mandate. Elucidate how all work also calculations also use proper units.

a. Round 1:
i. Illustrate is average per capita healthcare cost per capita for round 1 with everyone in the pool? You can calculate this as demonstrated in one of the articles. (This is the same as the EL we calculate in class.)
ii. Assume that the gross premium for the current pool is $700 dollars per month. Are insured's paying the AFP? Explain why or explain why not.
iii. Explain who is overcharged also who is undercharged for health insurance?

b. Round 2: Explain Illustrate happens in the risk pool also Illustrate happens to the EL when the risk pool composition changes. You MUST use the data provided in the chart also your answers in Round 1 to support your analysis. Elucidate how all work also includes all units.

c. Round 3:
i. Explain Illustrate happens in the risk pool also Illustrate happens to the EL when the risk pool composition changes. You MUST use the data provided in the chart also your answers in Rounds 1 also 2 to support your analysis. Elucidate how all work also includes all units.
ii. Assume the insured's who remain in the pool were ask to pay a premium that was 150% of the Round 3 AFP. Illustrate is the GP? Would anyone stay in the risk pool? Explain.

d. Now assume that it is 2014 also the Affordable Care Act is being enforced. Assume Pat - a 27 year old full-time worker with a college degree who is very healthy with no significant family history of illness also is in a low risk job. Pat's annual income is $50,000. Assume Pat engages in a rational cost benefit analysis regarding his purchase of health insurance. Illustrate will Pat do in round 1? Support your analysis using the answers to your questions in part 1) also your reading of all assigned papers for this question.