Monday, November 07, 2005

Universal Healthcare

In the presidential debate last night, Matt Santos made the claim that Medicare administrative costs are only 2 percent of program costs. I was skeptical but it was not hard to find a citation of the same statistic. Here's what the Medicare Rights Center has to say about it:
Private plans typically have administrative costs eight to ten times that of Original Medicare. Whereas Medicare uses less than 2 percent of funds for administrative costs, Medicare private plans, on average, use 15 percent of funds for administrative costs
Private plans cost more because they employ large bureaucracies with the sole purpose of getting someone else to pay.

What to do? Paul Krugman gives us a model to follow:
Taiwan, which moved 10 years ago from a U.S.-style system to a Canadian-style single-payer system, offers an object lesson in the economic advantages of universal coverage. In 1995 less than 60 percent of Taiwan's residents had health insurance; by 2001 the number was 97 percent. Yet according to a careful study published in Health Affairs two years ago, this huge expansion in coverage came virtually free: it led to little if any increase in overall health care spending beyond normal growth due to rising population and incomes.
Damn you, Harry and Louise!


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