Amichai D. Kilchevsky's Entry For The 2004 Moffatt Prize in Economics
The United States is the only industrialized nation that does not provide universal access to basic health care.(1) Indeed, the absence of universal health coverage has been called "one of the great unsolved problems facing the United States at the onset of the 21st century."(2) The problem affects Americans regardless of age, education, or place of residence. According to the Census Bureau, of the uninsured, nearly 20 million are white, 11 million are Hispanic, and 7 million are black.(3) More than half of the uninsured are full time workers or their dependents. Theoretically the only portion of the population guaranteed health care coverage is Americans over the age of 65 through Medicare. Moreover, the numbers of uninsured has been rising for the last 15 years despite extended periods of economic prosperity. Even before the recent recession, real income and purchasing power were falling far behind the growing rates of inflation for insurance, health services, and drugs, which rose by close to 15 percent last year.(4) And with the Centers for Medicare and Medicaid predicting health spending to reach $2.8 trillion by 2011, a figure that represents a 17 percent of the gross domestic product, the predicament of the uninsured is likely to get worse.(5)Before we are quick to turn health care coverage into a single payer system, however, we should note that transferring decision making from the private sector to the public sector substitutes bureaucratic discipline for economic discipline.(6) This is not to say that America should rely solely on the free market to distribute medical care. It is simply intended to show that while a perfectly functioning market may not distribute resources in a totally equitable manner, it is also true that no credible evidence supports government remedies as the answer for the perceived health care inequities either. As this paper will argue, government policies that incorporate elements of both interventionist and free-market strategies will maximize efficiency in production, efficiency in consumption, and equity in the health care market. This paper begins by elucidating the faults of socialized health care by examining other industrialized countries, such as Canada and Great Britain, which have adopted such an approach. This paper will then show that by issuing government tax deductions to individuals and firms who purchase health insurance the general population's access to health care will be greatly improved. This paper will conclude by showing how such a regulated market conforms to the ideas of freedom and democracy envisioned by this country's founding fathers.
Be Sure to Continue to Page 2 of "Universal Coverage: A Bridge Too Far?".
