The Jaker

Mostly rational politics, with occasional rants about how a few crazy Republicans are ruining the country.

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Tuesday, November 08, 2005
What I learned from the West Wing debate, Part 1 - Healthcare costs
For those who didn't see it (not watching West Wing this year - what's wrong with you?), Sunday's West Wing episode was a live debate between Jimmy Smits, playing Democratic nominee Matt Santos, and Alan Alda, playing Republican Arnold Vinick. In a jab at the formality of these debates (the timing, the flashing lights), the candidates agreed to toss out the rules and just have an open, free-wheeling debate, which would be great in real life but will likely never happen in my lifetime.

Anyway, the reason West Wing is so great this year is because it is incredibly pertinent. And the live episode, especially, seemed like it was absolutely on topic with the issues of the day - oil dependence, gas prices, immigration, etc. - with one expection... there was no discussion of Iraq. (In West Wing, for whatever reason, the U.S. only has foreign disputes with fictional countries).

So here's the first thing I learned from the debate. In discussing the lack of healthcare coverage, Democrat Santos discussed his "dream plan" to offer Medicare to everyone of all ages. Not force them to join it, but offer it. Why? Because its administrative costs are just 2% compared with 15%+ in private healthcare plans.

Is this really true? Is Medicare really so much more efficient than private healthcare? I looked it up, and the answer is YES, but not quite as much as Santos claimed.

The 2% number is correct, but it's low because of the way it's measured. It's calculated as ADMIN COSTS / SPENDING. Because Medicare is a program for old people, spending is obviously high. So the denominator is much bigger than it would be if there were healthier working age people in the program.

Fair enough. The better way to calculate would be administrative costs per enrollee. In this case, Medicare is about half as costly to administer as private insurance, rather than 1/7th. Still, in my opinion, a significant difference.

So isn't Matt Santos's idea worth discussing? It wouldn't create a single-payer system, because people would have the choice. And wouldn't the 45 million uninsured appreciate Medicare as opposed to nothing?

As Bill Gates and Bono and Bill Clinton say, we have to start treating healthcare as a fundamental human right.
posted by CB @ 9:43 AM  
  • At 2:09 PM, Blogger Gina said…

    Well I think there's a really good reason why their admin cost is only 2%, government run programs don't modernize with the time, they are just now getting around to adding drug coverage (and not really good drug coverage at that) let's look at this after the drug benifit kicks in.

    Medicare also has faced issues of underpayment. My husband's family runs a home health company and they don't pay what half of some services are worth (and I'm not even talking about making a profit off of it, just the ACTUAL cost of the service) This is not the program’s fault -- it stems instead from the ebb and flow of Medicare payments relative to private insurance payments. In years when private plans paid less -- such as in the mid-1990s -- health providers did not complain about Medicare benefits. Now, when private plans are paying more, some health providers are beginning to refuse Medicare patients.

    While I do have to agree, being myself a single poor, uninsured girl, I think some coverage is better than none. I fell once and thought I broke my wrist, I couldn't go get it x-rayed for fear I'd have bills for years, having medicare to help cover that bill would have been heaven sent.

    But I don't think it's the answer for all our problems and I fear that if the government starts provide some "universal coverage" even fawed, that companies will stop offering health insurance.

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