One of the most common, and least challenged, assertions in the debate over U.S. health
care policy is that Medicare administrative costs are about 2 percent of claims costs,
while private insurance companies administrative costs are in the 20 to 25 percent
range.
It is very difficult to do a real apples-to-apples comparison of Medicares true costs
with those of the insurance industry. The primary problem is that private sector
insurers must track and divulge their administrative costs, while most of Medicares
administrative costs are hidden or completely ignored by the complex and bureaucratic
reporting and tracking systems used by the government.
This study, based in part on a technical paper by Mark Litow of Milliman, Inc., finds
that Medicares actual administrative costs are 5.2 percent, when the hidden costs are
included.
http://www.cahi.org/cahi_contents/resources/pdf/CAHI_Medicare_Admin_Final_Publication.pdf
Huggy, while I tend to agree that healthcare costs are a result of several factors, among them are ones mentioned in previous posts. My feelings are that Govt. intervention into the healthcare insurance business is not the right solution to bring down costs and will further erode healthcare. The Federal Govt. has a role in containing costs they simply need to address the issues that effect costs and and promote and environment that makes healthcare more affordable and accessable to those who wish it.
If there was any clue that the costs are rigged. All you have to do is look at the bill the neo cons passed a few years ago that prevents medicare from negotiating for phamecuticals.
Even if with "hidden" costs medicares ad is up to 5-6% how is that not a 20-30% benefit from hmo's?