"Medicare is more efficient than private insurance."
If this were true, Medicare Part C wouldn't exist.
What is Part C? Part C is a program where a PRIVATE health insurance company takes your Medicare premium and gives you better coverage for (often) ZERO additional monthly charge. Using my Plan C, for example, I pay ZERO extra per month, and I get no-deductible coverage with tiny copays, no gatekeepers and a $3500 year annual max out of pocket.
MEDICARE HAS NO ANNUAL MAXIMUM. THEY STOP WHEN YOU'RE BROKE.
I also get dental and some vision coverage, a free gym membership, prescription coverage, some monthly freebies at the local pharmacy, all for (I repeat) the same exact same monthly premium as Medicare, which gives me none of that.
How is that possible? Efficiency. My care is delivered through a single hospital/clinic network with 25 or so locations in my local area. Also, emergency coverage is covered anywhere in the world. The only difference in coverage between Part C and Medicare is that if I move out of my locality, I have to switch plans. No big deal.
All for the exact same premium as Medicare. Because efficiency.
"Medicare has roughly a 2% admin overhead and private health insurance about 12% (off the top of my head)."
Yep. Know why? Most of Medicare admin is paid for on other department's budgets. Krugman got reamed for ignoring this rather simple fact. Take a look:
1) Non claims admin processing is done for Medicare by Social Security. You don't sign up for Medicare on medicare.gov, you sign up on ssa.gov. It's all on Social Security's budget, not Medicare's.
2) Medicare's IT processing (which is a HUGE administrative cost component) is on the GSA's budget. It's easy to have low admin costs when somebody else is paying for your IT hardware, software, and staff. :-)
3) Claims processing is handled by private companies on contract to Medicare. It's all outsourced.
So, the real question is this: How is it possible for Medicare to be so incredibly INefficient that Medicare Part C can exist when Medicare doesn't have to pay it's own bills for admin and IT? I mean, how incredibly bad must it be?
Cut to the chase. The Private Insurers in the US run at a profit margin of 2-3%. TWO TO THREE PERCENT. That's down there with grocery stores.; about 50-60 business sectors have higher profit margins than health insurance. And for that 2-3%, they implement state of the art fraud detection, fraud being something that Medicare cannot root out, again because of their inefficiency.
But, to your points:
"Medicare does not have entire divisions dedicated to finding obscure justifications to not provide coverage when it clear coverage should be provided"
Anecdotally, my mother passed away from cancer. She wanted to go to one of the best cancer centers in the country. Medicare said they wouldn't pay. So, don't even begin to tell me that Medicare doesn't control costs by limiting availability.
However, scrutinizing every major outlay is part of fraud detection. If you want rubber-stamping of all expenditures, you're going to have a system rife with fraud, kind of like Medicare is today.
"Medicare is not for profit, so the amount of overhead for profit in private care is spent on actual care in public systems"
Medicare claims administration is done by for-profit companies. Next?
"Medicare employees are all or nearly all public servants. Particularly at the top medicare does not have hundreds (compared with the many private health care providers) of C-level executives pulling down 6, 7 and 8 figure compensation every year. For every private excutive making $10,000,000 you can have 100 medicare experts making $100,000."
First off, there are very few senior executives making > 10M a year in any corporation. Highly unlikely you'd find as many as a dozen. Maybe a dozen and a half, tops. But by law they'd all be listed in the annual report, so you can check that for yourself.
It's also worth mentioning that there are *many* smaller insurers in the US who don't have ANY executives making that kind of income at all. This doesn't allow them to undercut the majors on price, it should be said.
Secondly: if you add up all the crazy compensation amounts earned by senior executives, it's a rounding error to the average annual premiums paid by those insured by private companies. I am not about to do your math for you, but go to any public finance site, pull an annual report for UNH or Cigna or somebody, add up all those crazy compensation numbers, and divide by the number of insured. You'll find that you could lower premiums a dollar a two per month by putting that compensation money to work. Nothing more.
But, more importantly, you don't understand where that executive compensation comes from, so let me enlighten you. Due to a Clinton era law, top executives all earn in cash about $1M a year. That's it. $1M. So, where does the rest of that crazy compensation come from?
The shareholders, who vote to compensate them by diluting their own holdings and creating a special class of stock for the purposes of compensation. So, if you don't give that money to the execs, it doesn't go into operations or the business to lower premiums; it simply disappears.
"This is why EU countries all pay roughly half what the US pays for healthcare, but we are getting - on average - much better care: Meaning we wait less and we live longer."
No, you pay half because you pay your doctors and nurses about half of what they earn here. That's quickly verifiable --- just google up some doctors and nurses salaries in various EU countries and do the currency conversion. Even Crazy Uncle Bernie acknowledged that to make his plan work, everyone in the health care system from professionals to hospitals was going to have to take a major pay cut.
And the reason why you live longer because you're not as fat, not because your systems have a superior ability to deliver care. Those are lifestyle issues which yes, Europeans have over the Americans.
