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Many Americans would be surprised to learn that Medicare is the most efficient healthcare provider in the country. It has lower administrative costs than all the health insurance providers and delivers a better quality of service. Rather than increasing the Medicare age as the Republicans aim to do with the Obama Administration willing to have that provisions as part of a “grand bargain” – the actual fiscally responsible action would be to lower the age to bring more Americans into the most efficient and effective healthcare system available.
Steve Brill, who wrote Time Magazine’s cover story on rising healthcare costs, agrees. In a discussion on ABC’s This Week Brill explained to the panel why lowering the Medicare age would go a long way in controlling healthcare spending.
RATTNER: But there’s a fundamental point here, Stephen, I think your piece was great. And I think you’re points are right, but I also don’t want people to be confused. I don’t believe that we can cut our way, change the pricing, do all the things you’re talking about and still save Medicare. The average person who’s at Medicare retirement age has paid in some like $122,000 in the system. They’ll get back $387,000 back in benefits. That’s three times. You’re not going to reduce that $387,000 by hospital cuts and this and that. We have to still have fundamental Medicare reforms to make those numbers work.
BRILL: Well, if you put Medicare in the context of the larger health care system, and this is something that everybody at this table is going to think that I should go to a mental hospital when I get finished saying this, the government and all of us would actually save money if you lowered — I said lowered the age for Medicare. If the Medicare age were 60 instead of 65, the economy and the taxpayers would actually save money. And George, please don’t look at me like that.
RATTNER: You’re potentially right. And part of the argument — you’re taking people out of the Medicare age to 67 is you’re taking people out of the Medicare system.
BRILL: Right. And what you would be doing, is you would be putting the most efficient player, which is Medicare — Medicare spends 80 or 90 cents to process a claim and the health insurance companies spend $18 or $20 or $25 to process a claim. Health insurance companies pay two, three, four times what Medicare pays for various services. So if you lowered the age, you would put more people into the bucket of much more efficient health care.
And the worst part about it is, the reforms that we have now, with the president’s plan, are actually going to raise the costs because all of the people who are 60, or 62, or 63, who can’t afford the premiums that they’re going to have now, are going to be subsidized by the taxpayer.
The opponents of such a plan are obvious, the insurance and pharmaceutical companies who enjoy gouging consumers. But if spending is such an important issue, so vital to America’s national security and future, shouldn’t every plan be on the table? With the “grand bargain” endorsed by President Obama increasing the Medicare eligibility age the spending problem will actually get worse with more Americans staying in a more inefficient healthcare system longer with costs. Costs that will ultimately be paid later by taxpayers.
Washington does have a spending problem, it’s called private insurers.
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There is no question, it’s been studied many times, government provided health universal healthcare costs less.
No advertising, no dividends, no ridiculous salary to the executives, one staff per job instead of one staff per company per job, etc etc.
But facts don’t matter in this discussion.
I haven’t finished reading Steve Brill’s article, even printed it out as it’s so long, but it seems to me he states the crux of the problem is the non-profit hospitals that are anything but non-profit. He quoted one insurance exec claiming they used to pay hospitals what Medicare pays plus a certain percentage, but now they have to negotiate down from the charge master rates, which is why an aspirin costs $25 a piece in the hospital.
Here’s an interesting CNN story on it.
The lower the age to enroll in Medicare, the more healthier people are paying Medicare premiums without using their benefit. It’s a win-win. Which means it won’t happen.
Pssst,George,look over here!
It’s funny because it’s true.
Didn’t that also get the response about single payer? That’s the exact reason why lowering the Medicare eligibility age will never pass – it’s a back door into creating a single payer system in this country!
Once the majority of middle income insured people have gone bankrupt we will implement single payer. At least ten years down the road I would guess. Since Obama ran in 2007 saying health care costs were his number one issue to get under control my premiums have gone from $665 to $1,298. Good job Brownie.
Wonder how they came up with those numbers.
If the average person makes the average wage, 2.9% goes to Medicare. $50,000 x .029 = $1450/yr. x 50 years is $72500.
As it stands, the amount we have all paid in, (plus premiums and co-pays when you hit Medicare age) covers 25% of expenses.
The only way it works is if you take the $1300 you pay the insurance company every month, and give it to the government. Where’s the benefit in that?
Ha!
Medicare is not perfect, but it could be.
When will we come full circle?
Lower the Medicare age to zero.
If this ever happens, then it needs to come at the same time with legislation that forces all doctors to accept MediCare. Right now, only a few stalwart individuals per area are still accepting MediCare.
This goes back to way way back to the mid-nineties, when doctors started seeing that it costs too much to have MediCare patients. One person in the clinic has to handle the billing, and often that one person has to do that activity with no other duties, as it is overwhelming. And remember, part of the legislation inside the ACA states that some 500 billion dollars of cuts to paying out MediCare providers had to come about! Democrats celebrated this part of the legislation – see our Dem leaders, in their infinite wisdom, won’t make patients pay for services, but will instead deprive the providers, those rich fat cats, who already make too much.
Not to defend “rich fat cats” but a lot of decent doctors are hurt by that aspect of the ACA. So they will end up dong early retirment or will stop seeing MediCare patients.
I wish I had your optimism. But I think if a lot of people end up bankrupt, the people at the top will decide to make it illegal to have a nasty credit score, and those of us in that boat will be in prison.
The system always serves the One Percent, not the 99%. Already people are behind bars for not paying off all their medical bills. One lady last year left a hospital where she had treatment for breast cancer, then she got greeted by police several weeks later, for not paying her bill. How could she pay it? She had already lost everything to the medical people!
OK, so lowering the medicare age would make good policy sense. But where’s the cruelty, the brutality, the unmitigated pleasure in harming people? Yuh know, it’s no fun to be powerful unless you can make lots of other peoples’ lives hell.
Why do we assume Medicare costs must be covered by payments from the beneficiaries? We need to understand that the government is not constrained by any such problem. The costs should be covered, as they are now, by taxes paid by everyone. After all we all use it or will one day. Lets just make it Medicare for all and be done with this Bs.
Ps I know some is taken out of our pay, but I would vote we just stop that silly practice and pay it all from general revenue, you know like a civilized society.
It should be. I vote for that.
I saw Steve Brill on Charlie Rose the other night and he made some very good points. At least there are people bringing this topic up. George Will is a waste of time. it is too bad Obama and the GOP don’t listen as they are too busy keeping their hands out for kick backs from Pharma and the insurance companies
I undertand your feelings about George Will. I have not read Will since way way back when he wrote a column extolling the virtues and the low risk of the Nuclear Power Plant Industry. Less than three days later, and Three Mile Island went Kablooie!
Uh, I want to call that kind of sentiment out. Most Americans have a much more favorable opinion of government insurance than private insurance. And not just in hospital insurance (Medicare). Same with old age insurance, survivor’s insurance, and disability insurance (Social Security).
It’s also important to be clear about language. Medicare doesn’t provide healthcare. The waste in the care part of healthcare is an entirely different huge problem :) The VA, for example actually provides care. And there is generally public outrage when VA underfunding comes to light, not because the government is doing too much, but because the government is doing too little.
Finally someone is making sense! . . . I’ve been saying for 4 years now, that the best way to lower health insurance costs is to LOWER the eligible age for medicare to 62 years old. That way you get 62 year old to retire, which frees up jobs for younger people, and they’ll probably take Social Security at age 62, saving money there in the short run 7 years, then costing slightly more if they live to be 70 years old or older. . . It’s really a win / win situation.
Let’s face it Obamacare is a terrible law! it lowers quality of care, increases costs, and still leaves 25 million people uninsured. . .
Please someone stop Obamacare from being fully implemented! It would be cheaper and better to just allow anyone without health insurance to join medicare. It’s a simple, easy and affordable way to insure people.
You silly goose! How would we pay for all the killing, death and destruction we inflict on the world if we used our own tax money for health care? We need that money for the troops, cia, blackwater, mercenaries, embassies, bases, prisons, weapons, drones, etc, etc. Remember – terrorism!!!!
Nope, Amerika is the “bestest” country in the world, and the most civilized – and we’ll kill you to prove it!
Drones, yeah drones. Buy more, kill more. Lets see if they can hit a retirement village.
Most private funds would “invest” incoming premiums all those years, and try to keep them growing beyond the sum of the input amounts. I doubt if this is how they get these figures, but certainly variable annuities assume they’ll have more than just premium sums when one matures, and they have to pay out. Other than something like that, I can’t answer your question. I have heard that today’s new Social Security recipients can expect on average to withdraw less than they paid in, which surprises me.
With more efficient service, Medicare shouldn’t require that whole $1300 dollars to equal the private insurance you refer to …
Heh. My math @ # 8 used big assumptions that aren’t true.
First, Medicare started in 1966, so no one could have paid in for 50 years.
In 1966 payroll deductions were .7%, not 2.9%. They gradually increased to 1%, 1.2%, 2%, etc. to 1986 when they finally hit 2.9%.
For Medicare’s Hospital Insurance (HI) program, the taxable maximum was the same as that for the OASDI program for 1966-1990. So in 1966 the Max Cap was $6600 and the most anyone could have paid in for the year is .007 x $6600 = $42.20. So if you add up the max year over year from 1996 to 1990, the most actual dollar amount anyone could have paid is $7,247.25.
Since then the cap was lifted for 3 years and then went away. So the only way for the average worker to have paid in close to $122,000 is if the average worker made $200,000 per year since 1990.
Loses credibility.
This, of course, is what Obama and the Democrats should have done all along, not only for the sake of policy but because it would have been much better politics than enactment of the grotesque ACA. If Obama lacked the political support to enact Medicare for All, he could have compromised by lowering the eligibility age for Medicare to 55 or 60. Even a reduction to age to 60 would have been a major advance in medical coverage. In future sessions of Congress, the Democrats could have built on this success by further reducing the Medicare eligibility age in incremental steps.
Sadly, Obama and the corporate whores won’t let people out of the private for-profit insurance system that enriches the administrators, not the practitioners!