Medicare reform: fundamental problems, incremental steps.

This paper presents an overview of the Medicare reform debate. I begin by reviewing some of the features of Medicare and then turn to a discussion of reforms, both on the benefits side and on the financing side of the program. The reform proposals raise difficult policy and political issues, and could have important implications for the federal budget, the efficiency of the health sector, and the well-being of the elderly and disabled.     

Medicare for all or medicare for none? A macroeconomic analysis of healthcare reform

In this study, I develop a novel general equilibrium life cycle model composed of finitely-lived households that differ according to age, skill level, and access to employer-provided health insurance. After introducing a “Medicare for all” health insurance system to the model, I examine how the welfare response to this policy change will differ according to household characteristics. Then, I compare this system to a completely privatized health insurance system that achieves universal health insurance coverage through the creation of utilization-based premium subsidies. In general, both systems tend to improve the welfare of young households at the expense of old households. However, when using average value-of-life as the primary measure of welfare, Medicare for all either benefits unskilled households at the expense of skilled households, or makes both worse off. In contrast, the privatized system improves the average value-of-life of all household groups, regardless of skill level or prior access to employer-provided health insurance.     

Policy watch: Medicare.

Public policies are often made without much recourse to economic reasoning. Economists are sometimes unaware of what is happening in the world of public affairs. As a result, both the quality of public decision making and the role that economists play in it are less than optimal. This feature contains short articles on topics that are currently on the agendas of policymakers, thus illustrating the role of economic analysis in illuminating current debates. Suggestions for future columns and comments on past ones should be sent to Daniel Weinberg, c/o Journal of Economic Perspectives, HHES Division, Bureau of the Census, Department of Commerce, Washington, D.C. 20233.