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Policy Watch: Medicare

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  • Joseph P. Newhouse

Abstract

The forecast growth for Medicare spending has created a highly visible budgetary impasse between the president and Congress. Both favor the growth of health plans that accept risk and would promote them by creating less restrictive options than heretofore. Nonetheless, the conference bill the president vetoed for other reasons did not envision price competition among plans but relied upon administered prices instead. The bill allowed Medical Savings Accounts; because of selection, the Congressional Budget Office estimated they would slightly increase Medicare costs. By eliminating the subsidy at the margin to hiring a resident, the bill's provisions would shift demand for residents down.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.10.3.159
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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 10 (1996)
Issue (Month): 3 (Summer)
Pages: 159-167

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Handle: RePEc:aea:jecper:v:10:y:1996:i:3:p:159-67

Note: DOI: 10.1257/jep.10.3.159
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  1. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 6(3), pages 3-21, Summer.
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Cited by:
  1. De Fraja, Gianni, 2000. "Contracts for health care and asymmetric information," Journal of Health Economics, Elsevier, Elsevier, vol. 19(5), pages 663-677, September.
  2. Barros, Pedro Pita, 2003. "Cream-skimming, incentives for efficiency and payment system," Journal of Health Economics, Elsevier, Elsevier, vol. 22(3), pages 419-443, May.
  3. Dennis Heffley & Thomas J. Miceli, 1997. "The Economics of Incentive-Based Health Care Plans," Working papers, University of Connecticut, Department of Economics 1997-05, University of Connecticut, Department of Economics.

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