The Medicaid Program: The Low-Income Health Care Subsidy

Abstract

While these data are inadequate to empirically test the foregoing three hypotheses, they are sufficient to caste doubt on the validity of the assumption upon which the design of the low-income medical care subsidy is based; i.e., that the private medical care market is efficient and therefore adequate to meet the health needs of all low-income groups. Further, analysis of the supply side of the market may show in-kind demand subsidies insufficient to improve the health status of the poor. A coordinated demand and supply subsidy may be necessary.