Title

Economic growth and medicare funding systems

Document Type

Journal article

Source Publication

Contemporary Economic Policy

Publication Date

1-1-2005

Volume

23

Issue

1

First Page

17

Last Page

27

Abstract

This article compares the long-run effects of changes in health conditions, population growth, price of medical care, and Medicare indemnity rate on capital formation and medical expenditures under fully funded and pay-as-you-go Medicare. Surprisingly, it is found that population growth, rising medical prices, and increasingly adverse health conditions may or may not raise medical expenditures in the long run. Moreover, the directions of some of these effects under the pay-as-you-go Medicare system are reversed under the fully funded system. Finally, it is shown that fully funded Medicare results in higher steady-state capital than pay-as-you-go Medicare; however, the welfare effect of the former may or may not be higher than that of the latter in general.

DOI

10.1093/cep/byi002

Print ISSN

10743529

Publisher Statement

Copyright © Western Economic Association International 2005. Access to external full text or publisher's version may require subscription.

Additional Information

Paper presented at the 78th Annual Conference of the Western-Economics-Association-International, 13-Jul-03, Denver, Colorado.

Full-text Version

Publisher’s Version

Language

English

Recommended Citation

Hau, A., & Jiang, L. (2005). Economic growth and medicare funding systems. Contemporary Economic Policy, 23(1), 17-27. doi: 10.1093/cep/byi002

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