Support Builds for a Plan to Rein In Medicare Costs

[landover]

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support-builds-for-premium-support-plan-for-medicare

Members of both parties told the panel that Medicare should offer a fixed amount of money to each beneficiary to buy coverage from competing private plans, whose costs and benefits would be tightly regulated by the government​

I don't understand how private insurance will able to deliver better cost than medicare while making profits. This may become like current long-term-care in the future, medicare will pay fix amount and rest will depend on remaining assets, more assets more you pay.

 

[samclem]

.I don't understand how private insurance will able to deliver better cost than medicare while making profits.​

There's not much profit on the business to begin with--in 2009 it was about 4%, most years it's a little more. In the grand scheme of things, that's virtually nothing when compared to the rest of the waste in how we now deliver health care (few incentives to reduce procedure costs, few incentives to maximize patient health, many incentives to maximize expensive procedures, etc). Now, we can disagree about whether less government involvement or more is better, but I can't see how anyone can argue that the profits of the health insurance companies bear a significant share of the blame.

The deficit "supercommittee" may have failed, but if it helped bring us a little closer to action to help reduce Medicare costs through market forces (as this NYT piece says) that would be a silver lining.

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[Nords]

I don't understand how private insurance will able to deliver better cost than medicare while making profits.

I don't either, but I bet the fraud would be a lot lower.

 

[ziggy29]

I don't either, but I bet the fraud would be a lot lower.

That's the $64 question -- the fraud would certainly be lower. Some of the reason Medicare advocates can crow about its "low overhead" is because of its relatively weak fraud prevention. But in terms of cost and cost alone, the question would be: does the cost of fraud prevention plus reasonable profit margin for privatized administration save money compared to no profit but less enforcement and more fraud? Hard to say.

 

[MichaelB]

Lets keep this on Medicare and FIRE and away from politics...

 

[Nords]

Lets keep this on Medicare and FIRE and away from politics...

Sorry. I should've known better than to use the word "fraud" in a topic that's trying to avoid politics...