Government Role in Health Care Policy
Describe the characteristics of the uninsured? Additionally, why are concentrated interests and diffuse costs important when predicting legislative outcomes?
The uninsured are usually less wealthy, less healthy, and less educated than the insured. Unlike the insured, who typically receive health care coverage through their employer, the uninsured bear the burden of health care coverage with no institutional support, save that of the government. Because many health care services are priced with insured consumers in mind, the price of health care services is often inflated far beyond the means of the average uninsured individual.
Concentrated interests and diffuse costs affect legislative outcomes through political lobbying and its effect on legislation. Concentrated interests, such as health care insurers, are very conducive to lobbying because they share very narrow and clearly defined economic interests that can be achieved through legislation. This allows lobbyists for concentrated interests such as health care insurers to present specific recommendations or even suggested legislative proposals to the legislators that they are in contact with.
Lobbying revolves around the objective of legislators to maximize probability of election or reelection to office. Concentrated interests further their own interests by paying for legislative benefits, such as the introduction of a particular bill in congress. Concentrated interests typically "pay" through campaign donations but also through political endorsements from the corresponding trade union.
2). What are the economic rationales for different types of
In the market for health care services, consumers are often limited to licensed providers, meaning that consumers, as well as providers, lack perfect information about the market, which is necessary for a true efficient market.
Also, there does not exist a mobility of resources within the health care services industry. The provision of health care services is tightly regulated through professional licensure procedures as well as state and federal law. The barriers to entry limit the number of options available to consumers in the health care services market.
As a result of these market inefficiencies, health care is extremely inefficient and unaffordable for a large portion of Americans. Considering such a market, the government subsidizes the training of health care professionals as well as the provision of health care services to consumers lacking the means to afford health care services on their own.
Programs such Medicare and Medicaid exemplify the other major rationale for government intervention in health care, the redistribution of resources from the relatively well-off to the economically disadvantaged. These programs, as well as tax exemptions for employers who offer health insurance, are considered demand subsidies for the consumers who benefit from the programs.
The rationale for the mandatory health insurance provision is that it helps the government offset the cost of subsidizing health insurance, especially in the context of an expanded Medicaid program. Requiring people to carry at least basic health insurance coverage reduces long-term overall health…
