Question on Insurance plans?

Question

“Medicare increased payments to providers and still managed to keep overall spending to 7.8 percent in 2001,” said Representative Pete Stark, Democrat of California. “Meanwhile, private insurance premiums went up 10.5 percent. Given these results, I cannot understand why Republicans continue to devise plans for turning Medicare over to private health insurers.”

What’s the flaw in this argument? (i.e. can it be possible for total spending by private insurance to go up faster than spending on public insurance and yet have the private insurance plan be better?)

Answer 1

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Answer 2

Not all providers will TAKE medicare, because the reimbursement rates are very, very low.  

Keeping spending to 7.8% of WHAT?  The country's GNP?  That's HUGE.  Also, 80% of medicare costs paid by the taxpayers go to OVERHEAD, not medical costs!!

Compare to 20% overhead for private costs, and a drastically smaller fraud cost.  Not to mention a larger provider base, with private carriers.

Anything government can do, private industry can do better, and cheaper.  See, government run anything has NO INCENTIVE to cut costs, to do better, to do more, etc.

Once again, if you love government housing projects, love calling the dmv, are thrilled with the accuracy of the IRS hotline, you'll love government health care.