Sunday, July 24, 2011

Former Labor Secretary: "Allow Anyone To Join Medicare"

A while back I said it would be better to lower the eligibility age for Medicare, not raise it as Obama suggested (from age 65 to 67). Lowering the age is better, in my opinion, because it would administer preventative and maintenance services to a population struggling with chronic conditions ... staving off critical interventions down the road. It costs less to help someone manage their blood glucose than it does to amputate a limb or administer kidney dialysis.

I also thought that Medicare could use their clout to negotiate lower prices for drugs and services. The larger the client pool, the more clout.

Lo and behold, Robert Reich, President Clinton's labor secretary, wrote last Friday:
"So what’s the answer? For starters, allow anyone at any age to join Medicare. Medicare’s administrative costs are in the range of 3 percent. That’s well below the 5 to 10 percent costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it’s way, way lower than the administrative costs of individual insurance (40 percent). It’s even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.
In addition, allow Medicare – and its poor cousin Medicaid – to use their huge bargaining leverage to negotiate lower rates with hospitals, doctors, and pharmaceutical companies.
Estimates of how much would be saved by extending Medicare to cover the entire population range from $58 billion to $400 billion a year. More Americans would get quality health care, and the long-term budget crisis would be sharply reduced."
-Why Medicare Is The Solution — Not The Problem, Robert Reich, July 22, 2011
I didn't realize Medicare's administrative costs were so much lower.

He didn't mention the long-term reduction in health care costs wrought by preventative care. If you could somehow put a dollar figure on that and add it to his $400 billion savings estimate, the decision to extend Medicare to more people would make itself, no?


Ronald said...

I say we should drop medicare and social security altogether. Let those old bastards fend for themselves. If they can't make it so what. It will decrease the surplus population. Let's get on with the Tea Party recommendations and get rid of entitlements, medicare first. I'm big in the Tea Party movement. I'm the one with the top hat and a taste for mercury.

Bix Weber said...

It would be a devastating experiment, wouldn't it.

One more thing...

People who signed up for Medicare who weren't previously insured, and this is a large group of people, would then be purchasing medical services ... which should make drug companies, hospitals, and other heath businesses happy, no? It increases their market.

Laurie Endicott Thomas said...

To work for Medicare for All, join If you live in New Jersey, join the New Jersey One Plan One Nation Coalition

Dr. Mel said...

Great post Bix. And tx for the citation, Laurie.