Pat, Jamie, and Taylor and are three individuals who are identical in every relevant way except one: they differ in their health insurance coverage. All three have just been diagnosed with a fully treatable and non-life-threatening illness. Treatment costs $20,000. Pat's health insurance will cover 100% of these costs, if Pat elects to be treated. Jamie has no health insurance coverage: Jamie will have to pay $20,000 out of pocket to get treated. Taylor's insurer paid $20,000 to Taylor as soon as the diagnosis was made; Taylor can now freely choose whether to spend the $20,000 on treatment or whether, instead, to pocket the money. You will observe who chooses to get treated and who chooses not to get treated. What observations would lead you to conclude that health insurance leads to increased health care usage? What observations would lead you to conclude that health insurance causes moral hazard?