The Affordable Care Act means that health coverage will be required for almost every American and will be partially subsidized. However, it will not change the employer-centric, private-insurer-based system of financing and coverage. Demand for care will increase significantly and rapidly, but the underlying issues that created the need for a safety net in the first place will not be solved in the near future.

Feldstein (2005) argues that if national health insurance is enacted and designed as an efficient in-king subsidy, then it is questionable as to whether in-kind subsidies should be continued. The major in-kind subsidies on the demand side are Medicare, Medicaid, and the tax deductibility of medial expenses in excess of 7.5% of adjusted gross income. According to the new Act, there will not be any abolition of any of these, but there will be reductions to all of them.

Taking a closer look at all...
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