I was reading the latest Thoughts From The Front Line newsletter, Unhealthy, Not Wealthy, and Far from Wise, and could not help wondering whether Medicare costs more than my health insurance. My wife and I are 61 years old and our health insurance premium is $479. According to the Medicare website the 2015 “Part B” premiums is $209.80 per month for a couple earning less than $170,000. That looks nice but it is only the part of the total health care bill. According to the Medicare NewsGroup in “2011, Medicare spent a total of $549.1 billion on health care coverage for 48.7 million beneficiaries” or about $11,275 per person. This is considerably higher than what we are paying for private insurance, $4,764 per person. It sure looks like the vaunted cost efficiency of single-payer health care systems is more sizzle than steak and you have to wonder how many of these services were necessary!
John Mauldin goes on to say that Medicare costs are going to get much worse.
In July, the Medicare trustees issued a report estimating that next year’s Part B premium will have to rise 52% in order to keep the system solvent. That’s right, 52%. This will be an increase of $50 to $175 per month, again depending on your income. So much for 2% inflation.
Some supporters will agree that Medicare has not done a good job of controlling costs but then say at least it is not dysfunctional. I think they are sorely mistaken. Nothing describes how dysfunctional Medicare has become than Health and Human Services Secretary Sylvia Burwell pledging that 70% of Medicare enrollees will be exempt from the rate increase. Now I am beginning to dread the day I become eligible for Medicare because health care costs are growing faster than Social Security Cost of Living Adjustments and I will be part of the 30% who will bear a disproportionate burden of the cost increases. Someday we will have to start thinking outside of the box about cost cutting because this is not a revenue problem. Both the single-payer health care systems and the health insurance exchange rely too much on wealth redistribution. Without intelligent cost cutting to temper our health care abuses and inefficiencies, the system continues to get more dysfunctional.