Question

Name and describe three rationales for government intervention in markets. Provide one example of each rationale in health insurance or health care markets.

Answer 1

1. Growth: government intervenes in the market to ensure the growth of the nation. In health care market, government makes sure that improvements take place in terms of better medical facilities.

2. Equality: Government also intervenes in the market to promote equality and to see that there is no descrimination. For example, in health care market, it checks if equal facilities are provided to everyone.

3. Social welfare: One very important reason for government intervention in the market is to improve social welfare. It sees whether or not the lives of people are improving and makes policies accordingly.