IDEAS home Printed from
   My bibliography  Save this article

Policy Watch: Medicare


  • Joseph P. Newhouse


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.

Suggested Citation

  • Joseph P. Newhouse, 1996. "Policy Watch: Medicare," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 159-167, Summer.
  • Handle: RePEc:aea:jecper:v:10:y:1996:i:3:p:159-67
    Note: DOI: 10.1257/jep.10.3.159

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
    2. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Liran Einav & Amy Finkelstein & Raymond Kluender & Paul Schrimpf, 2016. "Beyond Statistics: The Economic Content of Risk Scores," American Economic Journal: Applied Economics, American Economic Association, vol. 8(2), pages 195-224, April.
    2. Schillo, Sonja & Lux, Gerald & Wasem, Juergen & Buchner, Florian, 2016. "High cost pool or high cost groups—How to handle high(est) cost cases in a risk adjustment mechanism?," Health Policy, Elsevier, vol. 120(2), pages 141-147.
    3. Wasem, Jürgen & Buchner, Florian & Lux, Gerald & Schillo, Sonja, 2017. "High Cost Pool in a Health Status Based Risk Adjustment System – Some Conceptional and Empirical Considerations," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168122, Verein für Socialpolitik / German Economic Association.
    4. De Fraja, Gianni, 2000. "Contracts for health care and asymmetric information," Journal of Health Economics, Elsevier, vol. 19(5), pages 663-677, September.
    5. Dennis Heffley & Thomas J. Miceli, 1997. "The Economics of Incentive-Based Health Care Plans," Working papers 1997-05, University of Connecticut, Department of Economics.
    6. Barros, Pedro Pita, 2003. "Cream-skimming, incentives for efficiency and payment system," Journal of Health Economics, Elsevier, vol. 22(3), pages 419-443, May.

    More about this item

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:10:y:1996:i:3:p:159-67. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael P. Albert). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.