Strategies for financing national health insurance: who wins and who loses.
Two sources of funds are available to underwrite the costs of any national health-insurance plan: prepayments (premiums, payroll taxes and income taxes) and out-of-pocket payments (coinsurance and deductibles). The extent to which taxes rather than premiums are used to finance an insurance program will be the major determinant of how large a share of the costs of health care will be borne by higher-income groups. The extent to which coinsurance and deductible provisions are reduced or waived for low-income persons will have a less important, but still substantial, role in determining how the costs of a program are distributed. These financing principles, once understood, provide a basis for the design of health-insurance legislation that will achieve any pattern of income redistribution that may be desired.
D003669:Deductibles and Coinsurance; D005191:Family Characteristics; D005380:Financing, Government; D007182:Income; D007183:Income Tax; D007348:Insurance, Health; D007883:Legislation, Medical; D009313:National Health Programs; D014481:United States