Defined Contributions Define Health-Care Future: Peter Orszag
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Dec. 7 (Bloomberg) -- Over the next decade, we are likelyto see a shift in health insurance in the U.S.: So-calleddefined-contribution plans will gradually take over the market,shifting the residual risk of incurring high health-care costsfrom employers to workers.
The market today is dominated by “defined-benefit” plans,under which companies determine a set of health-insurancebenefits that are provided for employees. These will graduallybe replaced by defined-contribution plans, under which companiespay a fixed amount, and employees use the money to buy or helppay for insurance they choose themselves.