In designing a sensible system of national health insurance we need to avoid a repetition of the built-in inflationary pressures that followed the adoption of Medicaid and Medicare. Medicaid and Medicare eligibility encouraged many to increase their use of health care services, in part because they no longer needed to bear the costs (or full costs) or services. This increased demand, exceeding the supply of health care services, predictably produced price hikes. Other factors undoubtedly have contributed to the escalation of health care costs, including the tendency of some doctors to order unnecessary diagnostic tests, over-reliance on high technology, and the general unresponsiveness of medical costs to competitive pressures. But the increased demand produced by Medicaid and Medicare probably played a role. This is simple economics.
Bruce J. Winick, Rethinking the Health Care Delivery Crisis: The Need for a Therapeutic Jurisprudence, 7 J.L. & Health 49 (1992-1993)