Private carriers.

The same folks who adjudicate claims for folks like GM, Coca Cola and Home Depot adjudicate for Medicare.

As for the profit motive of carriers vs. the alleged non-profit of government entities, I suspect you do not know how the budgetary process works within government. Any money allocated for a program that is not spent by the end of the fiscal year is then cut from the following years budget.

So what is wrong with that you may ask?

If an entity want’s more money for the following year, including money for pay raises, they must spend MORE than was allocated in order to receive more money for the following fiscal year.

So where is the incentive to save money in government?

It simply does not exist.

And when have you ever heard of a tax decrease?

As for Medicare, the costs in fact are increasing every year in not so subtle ways.

Every year the deductible for Medicare participants increases. CMS also adjusts their reimbursement rates on a regular basis which create more of a disparity between what the rest of the public pays for health care vs. Medicare recipients. As reimbursements fall, or at least fail to keep pace with medical inflation, there are fewer providers willing to accept Medicare patients.

You speak of unnecessary medical treatment and fraudulent claims. You must not be aware of the fraudulent Medicare claims that are filed with regularity and the number of providers that are on the 6 o’clock news as they are hauled off to jail in handcuffs. More often than not they are not arrested for scamming private carriers but Medicare. Wonder why? Could it be because it is EASIER to defraud Medicare than private carriers?

All of these items add to the overall cost of Medicare and must be factored in along with the alleged savings for administration of Medicare claims.

When you focus solely on the administrative costs you ignore the bigger picture. If you truly want to save on the cost of health care you don’t fixate on the 8 – 10% side of the equation but rather the remaining 90%.

And there is the issue of taxes.

Premium taxes hold one of the top 3 spots in state revenue. In some cases they are the largest single source of revenue. Eliminate private carriers from the mix and states have to find a new source of revenue.

So when you want to cut out the private carrier from health care, don’t forget to factor in loss of tax revenue, fewer providers who are willing to serve the Medicare participants which leads to even more rationing, and a larger increase in cost shifting to those in the Medicare system through higher deductibles and fewer covered services.