The Learning Curve

New tricks for an old dog.

The economic efficiency of Federal healthcare

In some circles it is chic to talk about inefficient and bloated government spending, but the last time anyone said that to my face I asked, “Compared to what?” I didn’t get an answer directly, until today.

“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.”

Why Medicare Is the Solution — Not the Problem


Written by Tom Fox

07/23/2011 at 12:05 pm

Posted in Politics

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