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  5. Issues Every Plan to Reform Health Care Financing Must Confront

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Issues Every Plan to Reform Health Care Financing Must Confront

  • Henry J. Aaron
Journal of Economic Perspectives
vol. 8, no. 3, Summer 1994
(pp. 31–44)
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Abstract

This paper focuses on three main issues of fundamental health care reform. First, should experience rating--the linkage of premiums to actual loss experience--be retained? Despite widespread support for experience rating among economists, the paper argues that it should be abandoned for reasons of efficiency and equity. Second, would abandonment of experience rating cause much redistribution? The paper shows that redistribution among industries could require significant transitional adjustments. Third, should companies or individuals be subject to an insurance mandate? The paper calls for combining individual mandates, which have long-term advantages, with employer mandates, which have short-run pluses.

Citation

Aaron, Henry J. 1994. "Issues Every Plan to Reform Health Care Financing Must Confront." Journal of Economic Perspectives, 8 (3): 31–44. DOI: 10.1257/jep.8.3.31

JEL Classification

  • I18 Health: Government Policy; Regulation; Public Health
  • I11 Analysis of Health Care Markets
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