Monday, December 23, 2013

Privatizing Medicare and abandoning the less fortunate?

If we were to privatize, or at least not subsidize, Medicare, being elderly would be considered a preexisting condition. Coverage would be either real expensive or non existent.

I heard an urban legend that some Eskimo tribes had their version of Medicare which was basically leaving folks who were too ill to keep up with the tribe behind on an ice flow to pass away, or onto the "next life." We could end up having a system similar to that if we don't pay our taxes and watch out. Hopefully we will not migrate into that kind of a system even though, in some cases, people passing away and not suffering some circumstances of disease might be more charitable than just being strung along.

Compared to private insurance, Medicare tends to be the most efficient means to provide healthcare in terms of the ratio of administrative overhead to dollars spent on actual care. I hear that for some private insurance companies, 20%, or more, of the premium dollar goes to insurance company bureaucracy rather than healthcare. In Medicare, it's around 3% for administrative costs.

One of the things that the Obamacare program is trying to do is cap what percent of insurance company revenue that is spent on administration rather than healthcare.

Still, the Medicare program is more expensive than insurance plans that serve younger people even though only 3%, or so, goes to overhead. Why is that true?

Older people, as a population, tend to have higher medical expenses than the younger people who make up the policy holder pools of private insurance companies. This has to do with the people being served, not the administrative costs.

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