Wednesday, July 08, 2009

Medicare's Administrative Costs

 The other Karl, at Patterico's Pontifications, has links to discussions about the real overhead costs for Medicare.

However, the same day Pres. Obama said that, the Heritage Foundation issued a report by Robert A. Book, Ph.D., showing that:

[O]n a per-person basis Medicare's administrative costs are actually higher than those of private insurance–this despite the fact that private insurance companies do incur several categories of costs that do not apply to Medicare.

Elsewhere, Merrill Matthews notes:

Public figures for Medicare's administrative costs count only what it takes to print reimbursement checks. Normal operating costs — rent, management, health insurance, taxes, capital to start a business and new equipment — which private insurers must include in their administrative costs, are counted elsewhere in the federal budget.

Official Medicare administrative costs simply exclude what most companies must include. No administrative cost savings exist in the public plan, and the true costs will never be counted because they'll be hidden in the federal budget.

I'd kinda thought so.  Bottom line:

In short, Medicare — our already-existing government-run health insurer — does not have lower adminsitrative costs. That myth is based on fuzzy math, the program's own laxity, and the fact that it gets to hide its costs elsewhere in the federal budget. Indeed, that last factor is the sort of unfair competition that is essential to the government-run plan envisioned by the Left. Pres. Obama claims he wants to keep private insurers honest, but he's not being honest himself.

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