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Does anybody know what the admin costs of Medicare are?

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Bravo Zulu Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 11:28 AM
Original message
Does anybody know what the admin costs of Medicare are?
I'm sure they're a lot lower than the for profit insurance companies!
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abelenkpe Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 11:30 AM
Response to Original message
1. Watch the video with Rep. Weiner
that's on the front page titles last word.

I believe he said the admin costs for medicare were 1.5 percent. Could be wrong tho so check what he says. :)
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SlimJimmy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 11:33 AM
Response to Reply #1
3. They're about 2%. (nt)
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abelenkpe Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 11:41 AM
Response to Reply #3
4. 2% is way lower than private insurance companies
Really if you had the choice who would choose to buy insurance from a company that cost 30 percent in administration costs over one that cost 2 percent? Everyone would choose medicare. Republicans like to blather on about choice and free markets but I'd choose the one health insurance plan I am prohibited from buying into because of my age any day. Wouldn't you?

And the whole push to privatize social security. Aren't their administration costs super low as well? But most are forced to purchase their retirement plan on the "open market" mostly using 401ks and IRAs and those administration fees are ridiculous. Again republicans apparently want us to be free to be ripped off. Who are they protecting there? Citizens or corporations?

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SlimJimmy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 10:25 PM
Response to Reply #4
10. It depends. If your private insurance with 30 percent overhead paid out 80/20
and then 100% after 4k out of pocket, it might be a better deal - depending on the premium costs. Operating costs are not the only factor to consider.
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Recursion Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 07:01 AM
Response to Reply #4
16. That's not necessarily true
Edited on Sat May-28-11 07:01 AM by Recursion
Really if you had the choice who would choose to buy insurance from a company that cost 30 percent in administration costs over one that cost 2 percent? Everyone would choose medicare.

Well, it depends. My insurance plan is up there in the 80/20 world but costs significantly less than Medicare. Between me and my employer, the monthly premium is something like $600 (vs $900 for Medicare), the deductible is $500 (vs $1000 for Medicare) and I don't have copays (vs 20% for Medicare). Insurer overhead isn't the only (or even biggest) problem here.
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Motown_Johnny Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 07:09 AM
Response to Reply #16
18. because Medicare covers people who need coverage, your insurer covers people who can pay

If your insurer were covering everyone, and I mean EVERYONE, over age 65 who wanted coverage then their costs would be higher and your premium would be higher.



Medicare for everyone with ~2% (or 3% or 4%) overhead would be much better for everyone, except the people who make profits from the misfortunes of others.
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Recursion Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 07:16 AM
Response to Reply #18
19. That's exactly right
Edited on Sat May-28-11 07:17 AM by Recursion
If your insurer were covering everyone, and I mean EVERYONE, over age 65 who wanted coverage then their costs would be higher and your premium would be higher.

Exactly; this is where a lot of the pushback against single payer comes from.

Medicare for everyone with ~2% (or 3% or 4%) overhead would be much better for everyone, except the people who make profits from the misfortunes of others.

Well, except as you pointed out, right now it would be worse for me and people like me. Medicare faces the same actuarial realities as private insurance, and single payer would cost me more. I'm willing to pay that, but it goes against my short-term economic self interest.

The trust fund hides the consumer's true Medicare costs; they get spread over our entire career. When I look at Medicare levies vs. my insurance premiums, I'm paying for two insurance policies as it is...
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jtrockville Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 09:53 AM
Response to Reply #19
20. If we have young, healthy people paying into the system...
would it off-set the added cost of insuring everyone who's old and/or unhealthy?
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Recursion Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 11:40 PM
Response to Reply #20
21. Well, for the old, unhealthy people, sure
It's still going to cost young healthy people more.
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lumberjack_jeff Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 11:53 PM
Response to Reply #20
25. Yes. n/t
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lumberjack_jeff Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 11:52 PM
Response to Reply #4
24. It's difficult to compare apples to apples
Consider, for instance, that taxes are an administrative cost to private insurers, that obviously don't apply to medicare.
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hifiguy Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 11:33 AM
Response to Original message
2. I have never heard a figure higher than 3-4%
Whereas the vampires at the insurance companies usually run a 20-35% overhead. Gotta pay those multi-million dollar exec salaries and buy those private planes and country club memberships somehow, you know.
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Raven Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 11:45 AM
Response to Original message
5. I just went through the application process... fast, very efficient,
lovely, helpful humans at the other end of the phone. Govenrment at its best.
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rurallib Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 12:03 PM
Response to Original message
6. the 30% overhead for the insurance companies cost us @
$700 billion/ year.
It would be nice to see a side by side comparison of current costs and costs under the Repub plan.
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AldebTX Donating Member (739 posts) Send PM | Profile | Ignore Fri May-27-11 12:05 PM
Response to Original message
7. Much Lower Then Private Insurance
That's why I scoff at my right wing friends when they say it can be run much more efficiently by private industry.

My argument is when insurance companies can run on the same admin margins as medicare come talk to me....

Then its always a fall back from them that government is going to drive hard working businesses out of the market....
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ItNerd4life Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 12:13 PM
Response to Original message
8. Interesting, I've heard 50%. Wouldn't it be nice for Gov't to have
actual facts and figures like this? There is no reason not to have this type of information for every government program/agency.
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madokie Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 11:47 PM
Response to Reply #8
22. Where you heard that 50% is I'm sure from the likes of fox noise, limbrain, beck etc.
Cause I've never heard anything approaching that figure and I never listen to afore mentioned sources.
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lumberjack_jeff Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 11:49 PM
Response to Reply #8
23. You heard it from someone who lied to you. n/t
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Bigmack Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 12:26 PM
Response to Original message
9. Easy to find...
Congressional Budget Office (CBO) has found that administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under Medicare Advantage. This is a near perfect apples to apples comparison of administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population.

(And even these numbers may unduly favor private plans: A recent General Accounting Office report found that in 2006 Medicare Advantage plans spent 83.3 percent of their revenue on medical expenses, with 10.1 percent going to non-medical expenses and 6.6 percent to profitsa 16.7 percent administrative share.)
http://krugman.blogs.nytimes.com/2009/07/06/administrative-costs/

The Medical Benefit Ratio... what percentage of health insurance payments are used for actual care... of health insurance companies averages about 82%. http://www.scribd.com/doc/24524348/Medical-Benefit-Ratio-MBR

I post that stuff regularly on local newspaper opinion boards. I get <crickets> in response.
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applegrove Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 10:55 PM
Response to Original message
11. Absolutely. Public health care is much cheaper than for profit health care.
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Recursion Donating Member (1000+ posts) Send PM | Profile | Ignore Sun May-29-11 05:48 AM
Response to Reply #11
27. Then why does Medicare provision through private insurers? (nt)
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applegrove Donating Member (1000+ posts) Send PM | Profile | Ignore Sun May-29-11 09:21 PM
Response to Reply #27
30. I did not know that. That is a shame. The reason why so many of the western countries
have universal health care is because it is better at keeping costs down.
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Recursion Donating Member (1000+ posts) Send PM | Profile | Ignore Sun May-29-11 10:31 PM
Response to Reply #30
32. Not in all cases
But whole classes of actual provisioning are done by private contractors. Then again even in the UK that is the case; I think the point is that governments are better at administering than provisioning, in general.
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Recursion Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 11:03 PM
Response to Original message
12. Roughly 2% or so -- that's a savings we know we can make, but...
Edited on Fri May-27-11 11:05 PM by Recursion
...the worry is that medical providers (hospitals, doctors, pharma, device manufacturers, etc.) can't afford to treat the whole country at the rate Medicare pays. Which is why the biggest opponents of a public option were not insurance companies but instead hospitals.

Also remember that even with only 2% overhead, the actual unsubsidized premium for Medicare Parts A and B together is something like $900 per month, and that has a $1000 deductible and 20% copay. And if this is expanded to people who haven't paid in to the trust fund for their entire career, that money is going to have to come from somewhere.
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CarmanK Donating Member (459 posts) Send PM | Profile | Ignore Fri May-27-11 11:29 PM
Response to Reply #12
13. That is why we have Community Health Centers !
Medicare is a successful "universal health care plan for the elderly". Doctors serve medicare patients because the program payments are timely and reliable. And if the Bushies had allowed Medicare to negotiate drug prices with big PHarma, Medicare part D would cost a whole lot less. The health care reform act: increased funding for federal qualified community health centers across the country, it increased the number of medical scholarships for physicians and other health care providers and it encouraged the expansion of medical school programs to allow more students to attend college. We have our work to do for sure, because 40 mn more people will be insured under health care reform, but it is not impossible. And medical professionals will still be able to make a very good living with more people covered. In addition, the hospitals will be on more solid ground when it comes to billing for health care services especially for those previously uninsured.
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Recursion Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 11:30 PM
Response to Reply #13
14. FQHC funding was the best part of PPACA
And IIRC was why Sanders ended up supporting it.
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loudsue Donating Member (1000+ posts) Send PM | Profile | Ignore Fri May-27-11 11:53 PM
Response to Original message
15. What I want to know is what is the figure for PREMIUMS paid to health insurance companies
nationwide. Rightwing extremists are always screaming that they don't want to "raise taxes", but if the premiums were counted as if they were taxes paid instead of premiums paid, how much money would be flowing into the IRS coffers? All health insurance companies combined must rake in a HUGE amount of money. There should not even BE health insurance companies! They should not exist.
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Recursion Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 07:03 AM
Response to Reply #15
17. Don't forget that Medicare has premiums too
They're subsidized from the trust fund, but that's actual money that's actually being paid (and if you don't have enough covered employed quarters in your life, they have to be paid by you). And those premiums are pretty high: $500 per month for part A and $300 for part B (give or take). And that's for a level of coverage that most people don't find adequate, which is why there are so many supplemental plans out there.
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MrMickeysMom Donating Member (1000+ posts) Send PM | Profile | Ignore Sat May-28-11 11:53 PM
Response to Original message
26. I don't think 3% can be a convincing argument anymore...
HOWEVER - It's way more efficient and less expensive than private insurance.

Let's also not forget that Medicare is privately administered, and there are a lot of improvements that can be made upon it, if this Congress really was willing to move in the right direction.

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Name removed Donating Member (0 posts) Send PM | Profile | Ignore Sun May-29-11 06:38 AM
Response to Original message
28. Deleted message
Message removed by moderator. Click here to review the message board rules.
 
divvy Donating Member (1000+ posts) Send PM | Profile | Ignore Sun May-29-11 07:01 AM
Response to Original message
29. Dr Atul Gwande
Here is one of Atul Gwande's pieces on what drives cost in our health care system. You can just Google him and find a number of other excellent commentaries.

http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all

More on Atul here: http://gawande.com/about

It is pretty tough to be well versed in medical cost without Dr. Gwande
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Bravo Zulu Donating Member (1000+ posts) Send PM | Profile | Ignore Sun May-29-11 09:41 PM
Response to Reply #29
31. Thanks!
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