Individual health accounts: an alternative health care financing approach.
Date of Pub
After examining the major determinants of inefficiency in health care markets and several recent proposals to correct these
problems, this paper introduces a market-oriented alternative which could be highly efficient while meeting all the established
goals of a national health plan. To achieve these objectives, traditional forms of insurance would be replaced by a system
with the following characteristics: (1) instead of buying insurance, individuals and their employers would be required to
contribute into individual health accounts from which each family would pay for medical care; (2) Once accumulations attain
a designated level, any excess accumulations are distributed to the individual; and (3) A national health fund is established
to support those without regular accumulations or those whose accounts have been depleted. This paper develops these principles
to show how everyone would have access to care as well as the financial security normally associated with comprehensive insurance.
But, by inducing many patients to behave as if they were paying for the full cost of care through reductions in potential
earnings from their accounts, the paper explains how significant savings in total spending could also be achieved.
Consumer Participation : Economic Competition : Economics : Insurance, Health : United States