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 Lecture: Role of Government Chapter 19 OutlineGovernment Involvement in US
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| səhifə | 5/7 | | tarix | 23.05.2023 | | ölçüsü | 71,5 Kb. | | #112472 |
| Lec6 RoleGovernment - The Veterans Administration & Champus
- Largest public provider of health care in US.
- Provide care for veterans
- Retired military personal and dependants.
- Food and Drug Administration
- Started in 1906
- Regulates drugs quality.
Government Involvement in US - Mandated Health Insurance Benefits.
- Insurance industry is regulated at the state level.
- Tradition role is to ensure solvency of insurance companies.
- Mandate insurance benefits.
- In 1970, 48 mandates in 1991 1,000, in 1997, 600 new ones.
- Often are due to special interest groups.
- Some research has found that they prevent insurers from offering low-cost alternatives.
Government Involvement in US - Tax Policy
- Employer contribution to health insurance not part of taxable income.
- Individual payments for health insurance and care can be itemized and deducted if amount large enough.
- HAS
- These subsidies do not promote equity, go to those who can afford the most health care.
Government Involvement in US Government Failure - What is the extent and form of government involvement?
- Hard to agree on objectives, choose from different policy instruments, and select the correct value of these instruments.
- These difficulties could lead to government failure.
Government Failure - Economists tend to treat government as a benevolent despot who knows what is good for the economy and regulates accordingly
- Theory of Local Capture:
- Some argue that politicians are like everyone else, they want to maximize how many votes they get.
- So instead of doing what is good for the economy, may do what is good for some special interest group.
- May reward voters with monopoly profits, or public goods (common to build a hospital in your name in developing countries, beneficial regulation
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