Universal Public Health Insurance and Private Coverage: Externalities in Health Care Consumption

Inequality in access to health care services, through private purchase, appears to pose policy challenges greater than inequality in other spheres. This paper explores how inequality in access to health care services relates to social welfare. I examine the sources of private demand for health insurance and the ramifications of this demand for health, for patterns of government spending on health care services, and for individual and social well-being. Finally, I consider a novel policy approach to addressing the externalities of health service consumption.