Prices set by fee-for-service Medicare have a direct effect on prices paid by private insurers throughout the health care system. While this link is widely recognized, there is disagreement about whether higher Medicare prices lead to lower or higher prices for private health insurance. We...

This paper presents theory that an important source of value is missing from conventional theory of the demand for health insurance, namely, the effect of the transfer of income (from those who purchase insurance and remain healthy to those who purchase insurance and become ill) on purchases of...