Taxation and Its Effect Upon Public and Private Health Insurance and Medical Demand

  • 1 January 1980
    • journal article
    • review article
    • Vol. 1  (4) , 39-45
Abstract
Multiple tax subsidies are available to many buyers and sellers of health insurance. These subsidies have the potential of creating excess demand for health insurance, which in turn can create excess demand for health services. A review of the literature on the effects of the tax subsidies on the price of health care shows that these subsidies, by raising prices in the medical sector, constrain the Medicare and Medicaid programs' ability to provide access to care for their beneficiaries.