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Public Policy and the U.S. Health Insurance Market: Direct and Indirect Provision of Insurance

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  • McGarry, Kathleen

Abstract

In this paper I examine the twin challenges of providing coverage for the uninsured and addressing the issues of high and rising costs. I focus particularly on the role of government intervention in the marketplace both directly, through the provision of health insurance itself, and indirectly via the subsidization of private expenditures. My goal is to describe the basic structure of government involvement in private health insurance, as well as the Medicare and Medicaid programs, and to provide a guide to the issues surrounding these forms of coverage. Throughout the paper I pay particular attention to the role of public policy in affecting the prevalence of health insurance coverage and the cost of care. The following section describes the current health insurance system in the United States. It presents a number of statistics on insurance coverage and health care costs. The third section examines the private health insurance market and the government’s role in its development while the fourth section turns to a discussion of public programs. This study of public programs is divided into two parts focusing in turn on Medicare and Medicaid. I also briefly discuss the new State Children’s Health Insurance Program (SCHIP). A final section summarizes the current status of the health care system and highlights the challenges facing the nation.

Suggested Citation

  • McGarry, Kathleen, 2002. "Public Policy and the U.S. Health Insurance Market: Direct and Indirect Provision of Insurance," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(4), pages 789-827, December.
  • Handle: RePEc:ntj:journl:v:55:y:2002:i:4:p:789-827
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    References listed on IDEAS

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    1. Melissa A. Thomasson, 2003. "The Importance of Group Coverage: How Tax Policy Shaped U.S. Health Insurance," American Economic Review, American Economic Association, vol. 93(4), pages 1373-1384, September.
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    7. John Ham & Lara Dawn Shore-Sheppard, 2000. "The Effect of Medicaid Expansions for Low-Income Children on Medicaid Participation and Insurance Coverage: Evidence from the SIPP," JCPR Working Papers 164, Northwestern University/University of Chicago Joint Center for Poverty Research.
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    10. Julie Lee & Mark McClellan & Jonathan Skinner, 1999. "The Distributional Effects of Medicare," NBER Chapters,in: Tax Policy and the Economy, Volume 13, pages 85-108 National Bureau of Economic Research, Inc.
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    13. Bhattacharya, Jay & Lakdawalla, Darius, 2006. "Does Medicare benefit the poor?," Journal of Public Economics, Elsevier, vol. 90(1-2), pages 277-292, January.
    14. Jonathan Gruber, 2000. "Tax Subsidies for Health Insurance: Evaluating the Costs and Benefits," NBER Working Papers 7553, National Bureau of Economic Research, Inc.
    15. Glied, Sherry A. & Remler, Dahlia K., 2002. "What Every Public Finance Economist Needs to Know About Health Economics: Recent Advances and Unresolved Questions," National Tax Journal, National Tax Association;National Tax Journal, vol. 55(4), pages 771-788, December.
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    Cited by:

    1. Hsu, Minchung, 2008. "Health Insurance, the Social Welfare System and Household Saving," MPRA Paper 21281, University Library of Munich, Germany, revised 2010.

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