Since there is no comparable over 65 group on private health insurance it makes no sense to say Medicare costs 15% less than private insurance.
Of course it makes sense. People over 65 obviously have MORE medical problems than people under 65, and it STILL costs less, per person, than private health insurance.
15% less in fact, per the Department of Health and Human Services, in a study undertaken during the Bush administration.
If you are talking about administrative costs, unless you figure in all the costs footed by SS in keeping track of your Medicare eligibility from the first day you pay payroll taxes to the day you become eligible and all the costs of signing you up and all the costs Treasury assumes for handling all of Medicare's money and investments from the first payroll tax you pay to the current year's expenses, there again is no basis for comparison.
They simply used costs per patient when actually paying the bills. This shows the efficiency of the system.
As far as the rest goes, as medical costs have increased quite a bit since old folks started putting into the system, they are actually saving quite a bit more than 15% in the long run.
With respect to a public plan, unless some of its expenses are paid by other parts of the government, as in the case of Medicare, or it is otherwise subsidized by the government, there is no reason to think its administrative expenses would be significantly lower than a private plan's expenses, and since it would likely invest its reserves in Treasury bonds, as SS and Medicare do, it would earn less on its reserves than private plans do, the only basis for believing its costs would be lower is that it would not have to earn a profit for shareholders, about 3.5% on revenues normally for private plans, but non profit private plans already have that advantage and it has done little or nothing to drive down insurance premiums through competition.
Medicare is, by definition, a government subsidy. There is no undeclared government subsidization, as it is all government subsidization.
So there is no basis in fact or logic for Obama's argument that a public plan would drive down health insurance costs through competition, and that result can only be achieved if the public plan is subsidized by taxes or accompanied by coercive legislation to compel health care providers to accept the plans reimbursement rates even if they want to opt out of the plan. In effect, it can't lower health insurance premiums unless it becomes essentially Canada's plan.
Don't even get me started on Canada.
Canada's plan costs HALF as much as private plans in the US, and is MORE effective at saving lives.
Medicare is only 15% more efficient.
