Effects of Cost Sharing in Health Insurance

In 1970, personal health expenditures in the United States totaled $65 billion. In 1980, this figure had risen to $218 billion.1 It is therefore not surprising that discussions about existing health-insurance coverage and possible alternative ways of financing medical care have been concerned not only with how these costs might be shared but also with how they might be contained.Since total costs are affected by the degree to which services are used, various devices designed to restrain the use of services have been suggested. Third parties (insurance and government) pay for most health-care costs, and so cost-sharing proposals, such . . .