By Mark V. Pauly
American Enterprise Institute, June 7, 2019
Prof. Pauly also details how government shapes a much larger share of spending than the faction it finances directly. He tabulates the share of government-affected spending in 2016 and shows it is nearly 80% of all spending—“not leaving much in the unfettered, market-based category.” The federal government finances nearly 55% of all “explicit and implicit” health spending, he reports–from Medicare, the federal share of Medicaid, ACA subsidies to tax preferences for employer-based health insurance. But it controls much more through regulations and mandates on alleged private plans. He suggests that policy proposals involving block grants to the states and greater flexibility could lead to better-targeted subsidies and more market competition. Click here to read more.