Addressing Crowd Out
March 2008
In health policy, “crowd out” or “substitution” occurs when public funds substitute private dollars that otherwise would have been spent on health care. It is an inevitable consequence of any effort to subsidize coverage for people in America’s voluntary health care system where individuals and their employers can drop private coverage when better, more affordable public options are available. This issue brief highlights that crowd out is not an issue linked only with expansions in publicly-subsidized health insurance programs, but rather occurs whenever the government takes steps to subsidize coverage, including through the tax code.
Downlaod report (PDF)