Question

Americans over the age of 65 are covered by Medicare. For them, the medical market is a third-payer market. What is a third-party payer market? How does total quantity of medical services provided in a third-payer market, such as Medicare, compare to a market in which the purchaser of medical services pays the full cost? How does price of medical services provided in a third-part payer market, such as Medicare, compare to the price in a market in which the purchaser of medical services pays the full cost? If third-payer markets, such as Medicare, benefit buyers by providing a greater quantity of services and sellers by yielding a higher price, who is hurt by such a payments system?

Answer 1

The third party payer market is a such kind of market where the entity or the individual who actually receives the services do not pay for that directly. The payment is made by the third party who takes the certain money and payment is made by that agency. More clearly when we do some health insurance more example Medicare then we pay the certain amount money which is called premium to the insurance agency. Actually the insurance agency pay the cost medical service provided to me. So payment is made by party. So this market is called third party payer market.