The Medicare mix: efficient and inefficient combinations of social and private health insurance for U.S. elderly.
This paper explores two theories about the reason why the United States provides mixed public (Medicare) and private (Medigap) insurance for the elderly: that this represents an efficient combination of financing methods for a public good, or that it represents public provision of a private good for distributional reasons. It is argued that the first theory has more support than the second, but that the current configuration of Medicare and Medigap is not optimal. Two main problems are identified: the absence of coordination between public and private insurers, and the provision of overly generous coverage to the well off. Recent Medicare reforms have helped with the first problem, but the second remains to be solved.
Pauly
M V
MV
Health Care Systems Department, Wharton School, University of Pennsylvania, Philadelphia, USA.
D000368:Aged; D005069:Evaluation Studies as Topic; D006801:Humans; D019458:Insurance Coverage / Q000191:economics* / Q000639:trends; D017054:Insurance, Medigap / Q000191:economics* / Q000639:trends; D008329:Managed Care Programs / Q000191:economics / Q000639:trends; D006278:Medicare / Q000191:economics / Q000458:organization & administration* / Q000639:trends; D017149:Private Sector; D013660:Taxes; D014481:United States