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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: studdog who wrote (98782)6/22/2009 6:05:46 PM
From: skinowski  Read Replies (2) of 116555
 
The notion that Medicare administrative costs are 2-3% does not appear to be correct. Those numbers may be true if one only considers the costs of running the operation at the very top - issuing money to private insurance companies that are the actual "carriers" of Medicare. There are many more costs down the road. This study estimates the total costs at 26.9%:

CAHI’s 1994 Study. In 1994, the Council for Affordable Health Insurance (CAHI)
published “Rhetoric vs. Reality: Comparing Public and Private Health Care Costs,”
authored by Mark Litow, a consulting actuary with Milliman & Robertson (now
Milliman, Inc.), and CAHI’s Technical Committee (now the Research and Policy
Committee). The study found that when all of the hidden costs and certain related
unfunded liabilities were included, Medicare and Medicaid administrative costs with
the related unfunded liabilities were significantly higher (26.9 percent) than the private
sector (16.2 percent).

cahi.org

Medicare HMO's usually retain a percentage of funding which in the 20% plus range. There are more costs that remain hidden - like, the costs of billing Medicare (and Medigaps) by physicians. No one even tries to calculate the costs of obtaining various bullshit "pre-approvals" and "pre-certifications" for HMO Medicare programs.

It is puzzling that it's so difficult to find out the real costs of the Medicare system. Perhaps, we should develop a better understanding of this subject before we expand Medicare to many more millions of people.
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