“Medicare has lower administrative costs”

Simpsons, Lyle Lanley MonorailI often hear this from people who defeind confiscating taxpayer’s money without their consent to pay for a government run insurance program for the elderly.  They use this argument to justify wanting “Medicare for all.”  How does a defender of individual respond?  Here’s a way:

“If government employees can keep administrative costs down, and you think that’s such a good thing, then why not let Medicare compete with insurance companies?  If Medicare is so good, why do you need to make it crime for people not to fund it?  Or if you view Medicare as a type of charitable organization, why not let it compete with other non-profits?”

This gets to the heart of the issue.  Of course, you can dispute their claim by asking them if low administrative costs are necessarily a good thing.  I mean, why does the Washingtown Post report that “Medicare Pays Most Claims Without Review” and that …”Law enforcement authorities estimate that health-care fraud costs taxpayers more than $60 billion each year”?

The same article reports that

A critical aspect of the problem is that Medicare, the health program for the elderly and the disabled, automatically pays the vast majority of the bills it receives from companies that possess federally issued supplier numbers.

For more on how people defraud Medicare, check out Michael Cannon’s posts here and here.

1 Comment

Filed under Medicaid/Medicare/SCHIP, myths & fallacies

One response to ““Medicare has lower administrative costs”

  1. Plus, the claim of Medicare administrative costs savings has been rebutted — in essence, they just shift the costs onto the physicians’ offices through onerous paperwork requirements.

    As a practicing physician, I’ve seen first-hand the headaches our office staff have to go through in order to comply with all the arcane bureaucratic Medicare paperwork requirements. But this rarely gets mentioned in most analyses.

    http://www.westandfirm.org/blog/2008/06/myth-of-administrative-cost-savings.html

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