Journal of Economic Perspectives: Vol. 8 No. 3 (Summer 1994)


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Two Improvements on the Clinton Framework

Article Citation

Diamond, Peter A. 1994. "Two Improvements on the Clinton Framework." Journal of Economic Perspectives, 8(3): 61-66.

DOI: 10.1257/jep.8.3.61


Under the Clinton proposal, states choose a single payer or large regional alliances, where individuals choose from all plans in the market. This should give the high administrative costs of individual choice, not those of group choice. States should have another option--small alliances offering limited, group-based choice. Clinton proposes comprehensive insurance for all, with courts enforcing coverage for all medically necessary services not explicitly excluded. Covered services are not coordinated with resources available. Eventually, rationing will be needed. Less comprehensive basic coverage is an additional tool for rationing and decreases the government's role in determining health spending.

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Diamond, Peter A. (MIT)

JEL Classifications

I18: Health: Government Policy; Regulation; Public Health
I11: Analysis of Health Care Markets


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