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
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
