Final answer:
Individual patients do not necessarily pay prices far higher than the actual costs of health care services, as insurance plans are designed to share risks and alleviate direct costs through deductibles, co-payments, and co-insurance. Additionally, insurance can influence health service utilization and overall costs for society and insurers. The fee-for-service model and HMOs represent different approaches to organizing payments and provisioning of health care.
Step-by-step explanation:
The question asks whether individual patients pay a price far higher than the actual cost of the service, whether their health care is funded by private insurance or government programs. This statement is largely false. The actual situation is more complex due to the structure of insurance plans which include deductibles, co-payments, and co-insurance, which may result in cost-sharing between the insurer and the patient. For example, with a deductible, patients must pay an initial amount before insurance coverage begins. With co-insurance, a patient might pay a certain percentage of the service costs, while the insurer covers the rest. With a co-payment, the patient pays a fixed amount per visit.
While these mechanisms can increase the out-of-pocket cost for patients, they are part of insurance plans designed to make health care more affordable by spreading out risks and costs across a larger pool of insured individuals. Insurance does lead to increased utilization, and therefore higher overall costs for society and insurance companies, which can affect insurance premiums or taxes. Importantly, the fee-for-service model may incentivize overutilization of services, while structured insurance payment models like HMOs aim to manage costs and care distribution more effectively.