Question

Answer the following questions for the U.S. and Russia:

Does the government provide national healthcare? What is the overall quality of healthcare in the country? How is healthcare paid for?

Does the government actively impose price controls (price ceilings and floors)?

Answer 1

1. The Affordable Care Act (ACA), enacted in 2010, established “shared responsibility” between the government, employers, and individuals for ensuring that all Americans have access to affordable and good-quality health insurance. However, health coverage remains fragmented, with numerous private and public sources, as well as wide gaps in insured rates across the U.S. population. The Centers for Medicare and Medicaid Services (CMS) administers Medicare, a federal program for adults 65 and older and some people with disabilities, and works in partnership with state governments to administer both Medicaid and the Children’s Health Insurance Program (CHIP), a conglomeration of federal–state programs for certain low-income populations.

Private insurance is regulated mostly at the state level. In 2014, state and federally administered health insurance marketplaces were established to provide additional access to private insurance coverage, with income-based premium subsidies for low- and middle-income people. In addition, states were given the option of participating in a federally subsidized expansion of Medicaid eligibility.

Russian healthcare might seem similar on paper to the health system back home, with both state and private health insurance available for accessing healthcare in Russia. In truth, though, understanding how the Russian healthcare system works and ensuring you have adequate health insurance coverage can be a confusing and time-consuming business for expats relocating to Moscow or elsewhere in Russia.

The Russian Ministry of Health  oversees the Russian healthcare system, and the sector employs more two million people. There is a wide range of clinics and hospitals in Moscow and no shortage of dentists and Russian pharmacies around the country.

The public Russian healthcare system has faced a great deal of criticism both inside Russia and from farther afield. Due to its poor organisational structure, lack of government funds, outdated medical equipment and poorly paid staff, many Russian citizens fail to access an acceptable level of healthcare in Russia.

While it is by no means perfect, healthcare in Moscow is far better than in many parts of Russia, where some 17,500 towns and villages across the country have no medical infrastructure to speak of. This service gap could be exacerbated if the government realises its plans to cut an already-stretched healthcare budget by a third in 2017.

2. Price control in US

Governments have been trying to set maximum or minimum prices since ancient times. The Old Testament prohibited interest on loans to fellow Israelites; medieval governments fixed the maximum price of bread; and in recent years, governments in the United States have fixed the price of gasoline, the rent on apartments in New York City, and the wage of unskilled labor, to name a few. At times, governments go beyond fixing specific prices and try to control the general level of prices, as was done in the United States during both world wars and the Korean War, and by the Nixon administration from 1971 to 1973.

The appeal of price controls is understandable. Even though they fail to protect many consumers and hurt others, controls hold out the promise of protecting groups that are particularly hard-pressed to meet price increases. Thus, the prohibition against usury—charging high interest on loans—was intended to protect someone forced to borrow out of desperation; the maximum price for bread was supposed to protect the poor, who depended on bread to survive; and rent controls were supposed to protect those who were renting when the demand for apartments exceeded the supply, and landlords were preparing to “gouge” their tenants.

The incentives to evade controls are ever present, and the forms that evasion can take are limitless. The precise form depends on the nature of the good or service, the organization of the industry, the degree of government enforcement, and so on. One of the simplest forms of evasion is quality deterioration. In the United States during World War II, fat was added to hamburger, candy bars were made smaller and of inferior ingredients, and landlords reduced their maintenance of rent-controlled apartments. The government can attack quality deterioration by issuing specific product standards (hamburger must contain so much lean meat, apartments must be painted once a year, and so on) and by government oversight and enforcement. But this means that the bureaucracy controlling prices tends to get bigger, more intrusive, and more expensive.

Price controls in Russia

After a 20-year hiatus, direct Soviet-style price controls on the retail sector may be coming back, as the government strives to fight price hikes in supermarkets following Moscow's decision to ban swathes of Western food imports in retaliation for sanctions over the crisis in Ukraine.

The Federal Anti-Monopoly Service — the government's go-to body for browbeating retailers — is showing new vigor in the aftermath of the ban, which barred the import of meat, fish, fruit, vegetables and dairy products from the U.S., the European Union, Canada, Norway and Australia — all of which have slapped sanctions on Russia in response to Moscow's annexation of Crimea and support of separatist rebels in eastern Ukraine.

But it is not the state's only tool to fight price rises caused by the sudden rupture with European and North American suppliers.

After a series of top-level meetings involving Cabinet ministers, retailers, food suppliers and producers, the government this week produced a list of 40 food categories including meat, dairy products, bread, fruits and vegetables — together accounting for up to half what supermarkets sell. Retailers will have to report daily to the state the quantity and price of these goods, newspaper Vedomosti reported Wednesday, citing sources at two major retail chains