NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Benedic N. Ippolito

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NBER Working Papers and Publications

September 2017Implications of Medicaid Financing Reform for State Government Budgets
with Jeffrey Clemens
in Tax Policy and the Economy, Volume 32, Robert A. Moffitt, editor
August 2017Uncompensated Care and the Collapse of Hospital Payment Regulation: An Illustration of the Tinbergen Rule
with Jeffrey Clemens: w23758
Hospital payment regulation has historically been introduced to meet multiple policy objectives. The primary objective of "all-payer" rate setting regimes was to control costs through consistent, centrally regulated payments. These regimes were often linked, however, to an ancillary goal of financing care for the uninsured. We show that this secondary objective made states' all-payer regimes economically and legally unstable. Their economic instability reflected a feedback loop from surcharge rates to insurance coverage rates and back to the quantities of uncompensated care in need of being financed. The erosion of all-payer regimes' surcharge bases was particularly pronounced when health maintenance organizations were exempted from surcharge collections, creating a regulatory arbitra...
 
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