Also, Medicare’s operating margins are a crock. The cost of administering an an insurance program does not vary linearly with the cost of care. Insurance companies insure lots of people who consume no care, but still inflict an administrative cost, thus making them look ‘inefficient’ when they are not.

Thus an insurance program populated entirely with older, sicker patients (like Medicare or Medicaid) who consume copious amounts of care will look comparitively cheaper or ‘efficient’ in percentage terms. Medicare’s cost per beneficiary was $509 in 2005, compared to $453 for private insurers. Also consider that insurers are subject to a number of regulatory costs and taxes that Medicare is not.

As for lower reimbursement rates, that’s why may doctors stop taking Medicare or just retire early, why go to the trouble.

Since I don’t have employer-provided insurance, I actually subsidize all of these with my tax dollars. And none are included in the 3-4% “profit” reported by the industry. (BTW, the employer-insured get around $2,000 each of tax breaks compared to me and other entrepreneurs). So the more relevant number is “overhead plus profit.” According to the insurance industry itself, theirs is 16.7%, while Medicare’s is 3.3% Private insurance goes up by 7% a year, doubling every 10 years (doubled in the last 9). You think in 10 years your employer will pay twice what they do now for this “benefit?” And that it won’t come right out of salary increases? Furthermore, Medicare pays 19% less for doctors and 25% less for hospitals, v.s. private insurers. Add the two, and a “Medicare for all model” has a current and documented savings of over 30%. Where else can you find a 1/3 savings on health care?

“Tort reform” is such a GOP talking point. It’s 0.5% of health care dollars. Set that up against the 16.7% overhead and profit and see what impact such reform would have, even if 100% of malpractice cases were fraud (obviously, they’re not). 4 states have implemented stringent award caps. In every case, malpractice insurance went UP, not down. There are no savings there, though the insurers would be glad to have another limit on their risk.

Don Levit

The reason given for the delay of principal and interest, is that the loans from the Treasury create an asset for the trust funds, thus, from an accounting perspective, it is a wash.
This is the creating something out of nothing I referred to.

A few excerpts will be helpful:
In these excerpts, intragovernmental loans are loans from the trust funds to the Treasury.
From the GAO report entitled “United States Federal Debt,” on page 15 it states “Treasury incurs interest cost on debt held by the public, but government spending does not reflect cash used to retire the principal of outstanding debt. When it matures, the principal that comes due is paid off in cash raised by issuing new securities, and the debt is rolled over. If the budget is in deficit, the government must both issue new debt to the public and roll over maturing debt.”

Regarding intragovernmental loans on page 24 it states “Trust funds are credited with interest on their debt, since they are lending their surpluses to the Treasury. This interest of $158 billion in 2003 is an accounting transaction that does not require cash payments from the current budget or represent a burden on the current economy.
The interest received on debt held by government accounts is a future priority claim on the Treasury.”
http://www.gao.gov/new.items/d04485sp.pdf.

Regarding intragovernmental principal payback, in a paper entitled “Social Security and Medicare Trust Funds and the Federal Budget,” it states on page 3, “The general fund has the obligation of repaying the principal of the (intragovernmental) loans with interest when trust fund income falls below expenses.”
http://www.treas.gov/offices/economic-policy/reports/budget_trust_fund_perspectives_2008.pdf.
Don Levit

It’s like the story about the salesman who went on a sales call to Texas. To fit in, he decided to buy a cowboy hat. Bought a real nice one for $50 and listed on his expense report. The payroll accountant called up the salesman and told him that the company wasn’t going to pay for the hat. So for the next four months, he kept listing the hat on his expense report. The payroll accountant was just about ready to read him the riot act and called him one last time to inform him that the company still wasn’t going to pay for the hat. So on the next month’s expense report, the salesman put a note at the bottom that said “I challenge you to find where I put the $50 for the hat.”

“Medical malpractice: Medical malpractice is not a major driver of spending trends. Premiums for liability coverage and defensive medicine contribute to health spending at any moment in time but are not considered a recent significant factor in the overall growth of health care spending.15 Put another way, tort reform would lower health insurance premiums but medical malpractice is not currently driving the rate of increase. or medical liability,” (page 9).

I think tort reform should be balanced with adequate consumer protection.

I examined a chart rather recently comparing the health care systems of a number of countries, and the item that I found most notable was that the American health care system has by far the most specialists per capita (I would like to find that chart again).

By the way, the Wellpoint report is quite informative, for those of you who may not have had the chance to read it.