Medicare Part C raises health care costs
Contract out Medicare benefits to private health insurance companies and watch competition make the cost of health care fall. That was the theory. Medpage Today’s Emily Walker reports that the reality has turned out to be quite different:
While the intent of the plans was to save Medicare money, the private plans have had the opposite effect, the three reports said.
The Medicare Advantage plans are paid, on average, 13% more than a comparable patient would have cost in a traditional Medicare plan, said the MedPac analysts.
“Expanded choice means that in 2008, the CMS has had to review, approve, and oversee almost 4,000 Medicare Advantage plans under more than 700 different Medicare Advantage contracts from a large number of sponsors, each bearing high administrative costs,” Dr. [Marsha] Gold [a senior fellow at Mathematica Policy Research Institute in Washington] wrote.
Business blogger Sramana Mitra notes:
One of the greatest inefficiencies the U.S. faces is the $250 billion a year that it spends on health care administration, trying to resolve the information flow between providers, patients and insurers.
One simple solution to this is to eliminate the insurers (or government agencies like Medicare) from the equation as best as possible. In other words, pay for your own health care.