A Skeptic's View of Global Budget Caps

James Poterba

Journal of Economic Perspectives, 1994, vol. 8, issue 3, 67-73

Abstract: This brief paper explores the likely effects of government-imposed global budget caps, such as those in the Clinton administration proposal, on health care spending. It argues that health reform proposals that guarantee universal access to a basic package of medical benefits create a substantial new constituency for higher health care outlays. Political and potential legal pressures to expand rather than limit the set of guaranteed benefits, coupled with an expansion of the number of individuals with health insurance coverage, make it unlikely that global budget targets will succeed in reducing the rate of health care spending growth.

JEL-codes: I11 I18 (search for similar items in EconPapers)
Date: 1994
Note: DOI: 10.1257/jep.8.3.67
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Citations: View citations in EconPapers (3)

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