Medicare is much more efficient than private insurance, so we should expand it to people who want to buy in.
So what’s the answer? For starters, allow anyone at any age to join Medicare. Medicare’s administrative costs are in the range of 3 percent. That’s well below the 5 to 10 percent costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it’s way, way lower than the administrative costs of individual insurance (40 percent). It’s even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.
In addition, allow Medicare – and its poor cousin Medicaid – to use their huge bargaining leverage to negotiate lower rates with hospitals, doctors, and pharmaceutical companies. This would help move health care from a fee-for-the-most-costly-service system into one designed to get the highest-quality outcomes most cheaply.
Note how switching away from fee-for-service is key. This is another case where Massachusetts is leading the way, as Gov. Patrick has proposed. Massacusetts should lead on this, but the Federal Goverment needs to start this reform soon, too!
theloquaciousliberal says
You’re right to emphasize that the underlying costs of health care (and the inefficient fee-for-service system underlying the cost growth) is the real problem here and certainly not the administrative costs of government-run health care.
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p>Finding more and more efficient ways to provide health care is and should be job #1.
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p>Job #2, though, is and should be payroll tax reform to ensure that Medicare (and Social Security and government itself) has enough to survive our ever decreasing birth rates, ever expanding life expectancies and the ever-growing cost of real health care innovations (we need “payment reform” but effective prescription drugs that take large teams of highly educated people to produce and complex machinery is always going to cost more than herbs and leeches).
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p>Fortunately, ObamaCare takes huge strides in the revenue direction. Starting in 2013, the Medicare payroll tax was raised for high-earners (those making over $250,000) and a high-income households ($200,000 for an individual) would also be subject to a new 3.8% Medicare tax on investment income starting in 2013. The combined effect is an increase of $210 billion over the next ten years. Not a complete solution but a very good start.
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p>For almost all of us, Medicare provides or will provide much more in benefits than it costs the large majority of seniors (shhh… it’s welfare. double-shhh… it “spreads the wealth”). In the end, we need real cost control (shhh… rationing. double-shhh… death panels) and higher taxes to keep this essential program in place.
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p>It has its problems (fraud, abuse, greed, etc) but overall Medicare a great program that must be truly preserved and not eliminated through privatization.
ryepower12 says
You do realize that Medicare will be solvent for some time going into the future, and Social Security — of all things — will be able to deliver all of its obligations until the 2040s, and even then, only make minor cuts to benefits if we didn’t raise the threshold. Social Security’s “solvency” as far as I’m concerned is a distraction, and Medicare’s solvency will not require anything more than a little intelligence to maximize efficiencies and quality, including Reich’s comments about moving away from fee-for-pay and allowing bulk bargaining to reduce costs.
millburyman says
“Thank you Masshealth/Medicaid for my new free cell phone. 250 free minutes a month, I can handle that!”
They gave to him unsolicited.
stomv says
I’ve written about this before, and rarely get a nibble. I’ll do it again đŸ˜‰
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p>Why not put all pregnant women on Medicare? After all, every single person benefits while in the womb. It’s true that some women have zero children and some have more than three, but the vast majority of women have “a few” children over their lives, and every single child was fathered as well. In that sense, there are no major winners and losers if we just provide Medicare to pregnant women. Of course, that includes delivery and a bit of infant care.
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p>The Republicans talk about the sanctity of life in the womb — why not ensure that all babies get quality prenatal care? It would take a risk off of insurers, and help to reduce the M/F cost discrepancy for customers aged 18-45. It would allow the parents to focus on delivering a healthy baby, not worry about the details of billing. Same goes for the hospitals, birthing centers, midwives, training classes, etc. This is the motherhood in “motherhood and apple pie.”
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p>The reason why Americans aren’t crying out to expand Medicare is because they don’t know how much better it is than private insurance. So, start giving it to Americans for a year, than taking it away. Watch as Americans start screaming to expand Medicare even further. They’ll argue for Medicare for all children under five. Cut SCHIP, expand Medicare. Shouldn’t all children have good health care? Then, expand to 12, to 18. Etc.
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p>Putting pregnant women on Medicare is good policy and good spirited. It will result in better outcomes, and I’d bet at a lower overall cost. It won’t result in a significant shift in wealth since most Americans become the parents of one to three kids. That it will result in even more people pushing for even more expansions of single payer is a happy side effect.