Question

Health Policy Issues: An Economic Perspective 6th edition by Paul J. Feldstein ISBN 978-1-56793-696-4

From Chapters 1 to 3 Need help identifying what Feldstein's view of government involvement in the US healthcare system.

Answer 1

The American health care system suffers from 3 problems first it is costly and the cost is rising more than income,secondly majority of people do not have private or public insurance,thirdly the rising cost lead to bankruptcy.The government spends $700 on medicaid and medicare and gives tax subsidy of $200 for purchasing private health insurance provided by employer but the problem still exist.. Feldstein suggests that instead of giving health insurance tax subsidy the government should provide insurance which will protect Americans from rising health cost. The government should give a voucher to each family or individual which will allow them to buy insurance from private insurer. The private insurer will pay all medical cost in excess of 15% of the income of the family.Lower income families will receive this voucher because their health spending would be above 15%of their income. As a result of substitution of voucher for employer paid insurance ,there will be higher wages for all.However there may be certain problems related to this,the problem of finding cash by the families to pay the bills and again the doctors may not be sure that the patients will pay the bills.The government can give a health care credit card to each family with the voucher. So Feldstein points out that, out of pocket health spending ie which is 15% more than the income and credit card will go along way to solve America's health care problem.The government will not be involved in giving health care. The national debt will not increase and there will be no need to increase tax rate.