Originally posted by no1marauder
Good article in the New Yorker pointing out why radical reform of Medicare is unnecessary and may be counterproductive:
1. Traditional Medicare works better, and more cheaply, than most private-insurance plans. With tens of millions of enrollees, Medicare can exploit its bargaining power to pay health-care providers less than private insurers do: that ...[text shortened]... www.newyorker.com/online/blogs/johncassidy/2012/08/privatizing-medicare-a-supporter-recants.html
"1. Traditional Medicare works better, and more cheaply, than most private-insurance plans."
This is a baseless assertion believed by uninformed people. Medicare in its very first year of operation had cost exceeding estimates by 10x. Any private insurance company with that poor actuarial estimates would have gone bust immediately. And in fact Medicare's own actuaries predict its failure.
"Medicare can exploit its bargaining power to pay health-care providers less than private insurers do: that is the great advantage of a single-payer system."
Again a myth not supported by any actual evidence. What we know, is that Medicare has a record of being abused by fraudulent providers, and bureaucratic ineptness increases its costs.
Do I really need to go further and rip the whole piece to sheds?
What's really wrong with American health care, and escalating costs? HMOs were the creation of Ted Kennedy, as the best thing since sliced bread to revamp the "failing health care" system. Instead they made the situation worse.
The real culprit, is attempting to insure what are not insurable interests, or events. Ask an underwriter what insurable means. Predictable expenses are never insurable. Insurability is based on a relatively rare but costly event, where the costs can be shared by the majority who will not experience the event.
The predictable result of insuring the uninsurable is adverse selection, where people who know an expense is coming rush to buy a policy to cover it. The understanding of most people is that insurance companies or the government has a sugar daddy with an unlimited money source to cover any and all risks. Commonly people think that if they pay X in premiums, they ought to get X in benefits. That isn't how it works. The reality is that 100 or 1000 people pay in, to cover the big loss of one, and to cover the administration of the company and its employees, and make a profit for the stockholders or policy holders in the case of a mutual company.
The health care insurance industry has tried to avoid the basics, mostly because of the force of government. Insurance and market in general don't work well with government dictating the rules.