The mode of payment that is considered to be regressive is.

Question

Options

• AOut-of-pocket payment.
• BIndividual private insurance
• CEmployment-based group private insurance.
• DGovernment financing.

• A
  93% (25)
• B
  4% (1)
• D
  4% (1)

Explanation

Out-of-pocket payment is regressive because individuals pay a fixed amount regardless of their income - meaning a low-income person spends a far greater proportion of their earnings on the same medical service than a wealthy person does, placing a disproportionate burden on the poor.

Individual private insurance (B) is less regressive because premiums are risk-rated and people self-select based on perceived need, providing some degree of financial planning. Employment-based group insurance (C) spreads risk across a pool of workers and often includes employer contributions, making costs more distributed and proportional. Government financing (D) is typically progressive - funded through income-based or payroll taxes where higher earners contribute more, and benefits are broadly accessible regardless of income.

Memory tip: Think of "out-of-pocket" as "one price, all pockets" - a flat dollar amount hits a thin wallet much harder than a fat one. Whenever payment ignores income, it's regressive.

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