Kimberly J. Morgan and Andrea Louise Campbell
- Published in print:
- 2011
- Published Online:
- January 2012
- ISBN:
- 9780199730346
- eISBN:
- 9780199918447
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199730346.003.0004
- Subject:
- Political Science, American Politics
This chapter examines the ideational and political movements advocating market-based forms of delegated governance since the 1970s. In part, the embrace of marketizing reforms reflected the ...
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This chapter examines the ideational and political movements advocating market-based forms of delegated governance since the 1970s. In part, the embrace of marketizing reforms reflected the refinement of ideas about the inefficient and oppressive nature of government as juxtaposed with the dynamism, efficiency, and liberating qualities of markets and individual choice. Some conservative and centrist policy-makers also believed the American state was inherently weak—a self-fulfilling prophecy given their longstanding resistance to building effective bureaucratic capacity at the federal level. In a context of rising health care costs, some policy-makers sought ways to make private insurers do the tough work of disciplining health care interests, delegating to these non-governmental authorities responsibility for meting out pain to medical providers. We trace this impulse through the push for allowing HMOs to administer Medicare benefits; the gathering enthusiasm for managed competition and the Clinton health care reform effort of 1993/94; proposals that emerged in the 1990s for complete Medicare voucherization; and the movement for Health Savings Accounts.Less
This chapter examines the ideational and political movements advocating market-based forms of delegated governance since the 1970s. In part, the embrace of marketizing reforms reflected the refinement of ideas about the inefficient and oppressive nature of government as juxtaposed with the dynamism, efficiency, and liberating qualities of markets and individual choice. Some conservative and centrist policy-makers also believed the American state was inherently weak—a self-fulfilling prophecy given their longstanding resistance to building effective bureaucratic capacity at the federal level. In a context of rising health care costs, some policy-makers sought ways to make private insurers do the tough work of disciplining health care interests, delegating to these non-governmental authorities responsibility for meting out pain to medical providers. We trace this impulse through the push for allowing HMOs to administer Medicare benefits; the gathering enthusiasm for managed competition and the Clinton health care reform effort of 1993/94; proposals that emerged in the 1990s for complete Medicare voucherization; and the movement for Health Savings Accounts.
Mark V. Pauly
- Published in print:
- 2008
- Published Online:
- August 2013
- ISBN:
- 9780262195775
- eISBN:
- 9780262283816
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262195775.003.0005
- Subject:
- Economics and Finance, Econometrics
This chapter explores two key issues in the health insurance market: adverse selection and moral hazard. It first describes ideal insurance to serve as a benchmark for comparing insurance in the ...
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This chapter explores two key issues in the health insurance market: adverse selection and moral hazard. It first describes ideal insurance to serve as a benchmark for comparing insurance in the presence of moral hazard and adverse selection. Given moral hazard, there is a rationale for high-deductible plans, such as the typical Health Savings Accounts, but the tax treatment of employer-provided health insurance benefits poses an impediment to the diffusion of such plans. These employee benefits are currently excluded from employees’ income for the purposes of the U.S. federal personal income tax. In contrast to moral hazard, adverse selection is a “paper tiger,” more important in theory than in practice in in health insurance. Nevertheless, adverse selection may be a significant phenomenon in other markets, depending on their specific characteristics. The chapter also considers the effects of cost sharing on health care.Less
This chapter explores two key issues in the health insurance market: adverse selection and moral hazard. It first describes ideal insurance to serve as a benchmark for comparing insurance in the presence of moral hazard and adverse selection. Given moral hazard, there is a rationale for high-deductible plans, such as the typical Health Savings Accounts, but the tax treatment of employer-provided health insurance benefits poses an impediment to the diffusion of such plans. These employee benefits are currently excluded from employees’ income for the purposes of the U.S. federal personal income tax. In contrast to moral hazard, adverse selection is a “paper tiger,” more important in theory than in practice in in health insurance. Nevertheless, adverse selection may be a significant phenomenon in other markets, depending on their specific characteristics. The chapter also considers the effects of cost sharing on health care.
