Question

According to the health care life cycle, in the absence of government or employer-sponsored health coverage, workers in middle age would

Multiple Choice

• save an enormous amount of money to pay for health expenses in old age.

• stop paying for the catastrophic care insurance they purchased when they were young.

• have fewer out-of-pocket medical expenses than when they were young.

• use the money that they saved when they were young to pay for routine medical expenses.

Answer 1

The correct answer is - Use the money that they saved when they were young to pay for routine medical expenses

Explanation -

In general, when an individual is young, there are lesser healthcare problems and hence expenses. With age, the healthcare cost increases for an individual or household. With an ageing demographic, the healthcare cost increases for a country.

When there is no government or employer-sponsored health coverage, the strategy is to build reserves in terms of savings. This buffer helps later when medical cost escalates. Therefore, the healthcare cycle for an individual is represented by a gradually upward trending cost. Initial savings are absorbed in healthcare costs at a later age.