Heritage: Medicare has HIGHER Admin Costs

Over the past couple weeks of the health care debate, I have continually heard the claim that a public option could lower health care costs by reducing administrative costs, and the evidence for this is supposedly that Medicare has much lower administrative costs than private insurance.

However, the fact is that Medicare's administrative costs on a PER PERSON BASIS are actually HIGHER than those of private insurance. All the rhetoric lately of Medicare having lower admin costs is because they are taking the admin costs as a percentage of the total dollar amount spent for admin plus paying claims. Because Medicare pays more in claims per beneficiary, the admin costs are divided into a much larger denominator than private insurance's. In fact, the more fraud, waste, and abuse there is in Medicare, the lower their admin costs are as a percentage!

Read the entire Heritage memo here:
http://www.heritage.org/Research/HealthCare/wm2505.cfm
June 25, 2009
Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance

Money quote is:

The fact is that, in recent years, Medicare administrative costs per beneficiary have substantially exceeded those costs for the private sector, this despite the fact that, as critics note, private insurance is subject to many expenses not incurred by Medicare. Contrary to the claims of public plan advocates, moving millions of Americans from private insurance to a Medicare-like program will result in program administrative costs that are higher per person and higher, not lower, for the nation as a whole.

And here's the Heritage graphics:



Hat tip to Tom Bevan at RealClearPolitics where I spotted this first.
http://www.realclearpolitics.com/articles/2009/06/27/the_adminstrative_cost_benefit_myth_97193.html

Deficit Spending & Shedding Jobs

Two graphs I've got to catalog on my blog before I forget where I found them.

First is a graph of the Bush era deficits compared against the CBO and White House estimates under Obama, courtesy of Heritage and the Washington Post.



The second graph is the most recently updated unemployment figures from Innocent Bystanders

VIDEO: Democrats Hypocrisy on Medicare Cuts

Democrats screeched for years while Bush tried to make modest reforms (tens of Billions of dollars) to limit the explosive cost growth of Medicare. Now the Democrats are proposing $622 Billion in cuts!

Check out this montage on YouTube.



Amazing. This is almost as bad as the Democrats hypocrisy on the Iraq War.

IBD: Breakdown of the Health Uninsured

Make sure to read this IBD editorial.

This is in line with analysis I have seen before, that if you take out illegal aliens, those who can afford health insurance but decide not to purchase it, and those who are only temporarily without insurance while between jobs, the number of uninsured drops from 47 million to somewhere in the 10-20 million range, depending on the estimate. You can cut the number down even further if you exclude the people who are eligible for government programs but have not taken advantage of them. After all of this, you end up with 2-5% of the population that is uninsurable or falls into a gap where government assistance still does not help enough to afford insurance in states with expensive health insurance.

If you wanted to attack these reasons for uninsurance, you would:

Enforce immigration laws.

Enact some form of an individual mandate to purchase at least basic catastrophic health insurance (with similar justifiction to mandating all drivers maintain car insurance, although I would be really nervous that this mandate would not be structured right). Withhold employee's portion toward paying for this from paycheck similar to FICA witholdings.

Increase health insurance portability, mainly by breaking the link between jobs and health insurance. The best step to take to achive this is to level the playing field by extending a tax deduction or credit for health insurance to everyone, not only those who receive insurance through their employer (this is what McCain proposed during the 08 presidential campaign). Employers could still provide benefits that helped pay for your insurance, but instead of being stuck with the employer group one-size-fits-all plan, you would have much a better choice to pick the best plan for you from your employer or the private market.

Do a better job educating those eligible for public assistance.

Enact free market reforms to bring down the cost of health insurance. Expand HSA's, encourage insurance companies to increase copays and make them percentage based (so consumers have incentives to shop around for best value) in exchange for lower insurance premiums, and encourage health providers -- and other private groups -- to increase price and quality transparency so that consumers can truly choose the best value for them. Reduce the number of mandates. Allow individuals to purchase health insurance across state lines. Enact tort-reform to cap the amount of non-economic awards in frivolous lawsuits -- every dollar that doctors have to pay in liability lawsuit awards or for liability insurance is a dollar that is passed along to consumers in the form of higher health insurance premiums. Stop cost-shifting the failing Medicare program's costs to the private insurers by underpaying doctors for care provided to Medicare patients -- this forces providers to raise prices for everyone else to stay afloat, inflating health insurance premiums in the private individual and group markets. Allow nurses and physician assistants to provide more care that they are capable of providing instead of mandating that only a more expensive doctor can provide it.

Netanyahu's Vision for Middle East Peace

Israel's Prime Minister Benjamin Netanyahu gave a speech on his vision for peace with the Palestinians. For anyone not familiar, he gives a good overview of the history of the conflict and all the major issues.

For Netanyahu's reputation as a "hardliner", I have trouble finding fault with ANY of his requirements for peace. Given the Arabs' desire to eliminate the state of Israel, it is understandable that he asks for a disarmed & peaceful Palestinian state.

Bush's 2004 D-Day Speech

I ran across this interesting article describing George W. Bush's 2004 D-Day speech, which was barely covered because Ronald Reagan had passed away that very morning. Make sure to read all the way to the end.

"Our boys had carried in their pockets the book that brought into the world this message: Greater love has no man than this: that a man lay down his life for his friends. America honors all the liberators who fought here in the noblest of causes."

Turning then toward Chirac, Bush delivered the speech's kicker. "And America would do it again, for our friends."

The field of green was silent for a moment before the aging audience broke into heartfelt applause. Chirac, clearly moved by Bush's words, approached the American president, grasped both his hands, and for a poignant moment, did not let go.

Dude, Where's My Stimulus?

I know, I know. Unemployment is a lagging indicator, and not the best measure of whether recent stimulus has kicked in. Nevertheless, it is insightful to compare the current numbers against what was promised by Obama and his economic team while pushing the $787 billion Porkulus bill back in January & February. It is becoming much harder for Obama to claim his government spending is doing much good, and all the negative consequences of out of control (and inherently inefficient) government spending -- massive borrowing (higher interest rates) and printing of money (inflation) and raising taxes (obvious negative impact to those who are taxed more) -- will start to be felt more and more all the time.

Hat tips: Innocent Bystanders & HotAir


Also, see my previous post on the Obama administration's claims

Ted Kennedy's Health Care

Here's my comments at the HotAir Green Room post by Karl.