The Medicare program incorporates a number of functions that go beyond providing health insurance to its beneficiaries. These activities, which we refer to as “collateral” functions, may have important health consequences but are also an increasing source of controversy. In this essay we develop a conceptual framework for categorizing these involvements,introduce some additional options that might complement Medicare's current collateral functions, assess the reaction of policy elites and Medicare's current beneficiaries to these alternatives, and evaluate the role that collateral activities play for Medicare's core mission. A case can be made for expanding some collateral involvements, but only if the Health Care Financing Administration has the strategic direction and administrative capacity to effectively implement these activities.

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