Financing health care: out of whose pocket?

Health expenditures have grown steadily in the United States, but though United States spending is the highest in the world, it may not be as far out of line as is often assumed. However, although the economy is capable of absorbing an increasing amount of health care without reducing other consumption, financing mechanisms are breaking down. That part of Medicare financed through payroll taxes will be insolvent by the year 2003; the rest of Medicare and all of Medicaid adds to a growing budget deficit. And, the free market fails to provide rational long-term financing of long-term care.