The problem is that the payments to remedy the situation would, essentially and intrinsically, largely be “wasted” on paying subsidies to currently insured people who do not need subsidies and who are not poor. Roughly speaking, for me to transfer one dollar to pay for additional medical care for the nonpoor currently uninsured using new subsidies, it will cost me up to twenty dollars. The reason is that four out of five subsidy dollars will go to people who are currently insured and, of the money that goes to the uninsured, three out of four dollars will go to replace free care from the provider. I prefer carrots to sticks as instruments of social policy, but, for many Americans, these carrots may just be too expensive. […]
Finally, let me say a word about […] cost control. Suppose the government did make health insurance coverage compulsory. […] Is it then not morally incumbent upon the government to worry about the cost of the thing whose purchase it has mandated-in this case, about the cost of health care and of health insurance? If government itself offered the public a government-run fail-safe insurance policy-e.g., opened the Medicare program to all Americans who wanted to buy into it-then government’s cost-control tentacles would not need to reach beyond those public insurance programs. Government could then pursue […] tight cost control over the government-run programs through centrally administered prices coupled with expenditure targets that are enforced through unilateral cuts in future fees if past expenditure targets have been exceeded. On the other hand, if government-mandated insurance coverage is to be provided through private health insurers, […] then government cannot any longer take a hands-off posture vis-it-vis the private sector. Government then automatically is accountable for the cost of health care in the private sector, unless it wishes to take the irresponsible posture of mandating insurance coverage but letting the individual citizen bear fully the financial risk of that policy.
[Reproduced with permission from “Looking Back, Looking Forward: ‘Staying Power’ Issues in Health Care Reform,” 1996, by the National Academy of Sciences, Courtesy of the National Academies Press, Washington, D.C.]
One of those paragraphs was written by Mark Pauly, the other by Uwe Reinhardt, both discussing health reform. The year was 1995. Their words are published in a National Academy Press book, which I cannot find online. I’ve asked NAP to post a copy of the Pauly-Reinhardt discussion. If they do, I’ll let you know.
Can you guess which paragraph was written by whom?