Wednesday, February 02, 2005

Public Provision of Health Care, Part 2

In the previous post, I linked to Amartya Sen's arguments in favor of more provision of public health care spending in India. Sen recognizes, however, that it is important to improve the regulation and supervision of the system, which is plagued with corruption.

Here is another real dilemma. The state of Massachusetts has just released a report that details how employers have an incentive to rely on the state for the provision of health care benefits. It turns out that about 35 percent of the uninsured in the state work full time, and should be receiving health care benefits, but do not. Why not? Cost is named as the number one reason. Other employers, like Wal-Mart, make it very difficult for employees to work full time, so that they don't have to provide benefits.

In any case, employers have a strong incentive to free ride on the state's provision of health care benefits and, of course, they do. I don't see a clear solution.


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