District 7's consummate lair, Raul Grijalva is at it again. Like a credit-card waving teenager, Grijalva is shouting how much the government will "save" through a Medicare-type "public option.":
"I, along with other progressive members of the House, argued strongly during the past few months that a successful public option would structure its payments to doctors and hospitals around Medicare rates. Medicare saves the government money because its purchasing power nationwide is unmatched, giving it leverage to negotiate affordable prices for Americans over the age of 65. It can afford to charge consumers less because it has low overhead and is remarkably efficient at what it does."
No, Raul, the government in all aspects is remarkably inefficient at what it does because it has no accountability and it can siphon off some administrative costs as debt, something private insurance companies are not allowed to do for any length of time. An article by Dr. Robert Book at the Heritage Foundation explains Grijalva Progressive lies:
Advocates of a public plan assert that Medicare has administrative costs of 3 percent (or 6 to 8 percent if support from other government agencies is included), compared to 14 to 22 percent for private employer-sponsored health insurance (depending on which study is cited), or even more for individually purchased insurance. They attribute the difference to superior efficiency of government, private insurance companies' expenditures on marketing, efforts to deny claims, unrestrained pursuit of profit, and high executive salaries.
However, on a per-person basis Medicare's administrative costs are actually higher than those of private insurance--this despite the fact that private insurance companies do incur several categories of costs that do not apply to Medicare. If recent cost history is any guide, switching the more than 200 million Americans with private insurance to a public plan will not save money but will actually increase health care administrative costs by several billion dollars.
Medicare patients are by definition elderly, disabled, or patients with end-stage renal disease, and as such have higher average patient care costs, so expressing administrative costs as a percentage of total costs gives a misleading picture of relative efficiency. Administrative costs are incurred primarily on a fixed or per-beneficiary basis; this approach spreads Medicare's costs over a larger base of patient care cost.
For the complete article, which takes apart the progressive arguments for a public option piece by piece see Heritage.com.
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