The Medicare Cost Shift to Private Plans

This report is from Milliman. Milliman reviews claims data and provides analysis. Over the last several years there has been Medicare funding cuts in the federal budget. Well, when that money is cut from the budget hospitals and providers have to make it up from private plans. This is called cost shifting. There is no negotiating with Medicare. Doctors and Hospitals have to accept these below market reimbursement rates. So when you hear someone say if we had a single payer, the US would save 30%. If that would happen we would see a reduction in wages for doctors, nurses, staff, and hospitals. Hospitals would operate at a deficit. People will see rationing because in this type of system you have no choice and no voice. Hospitals and doctors will ration care based on the payment reductions. Obama calls these efficiencies. Remember, as much as we would like to say that Healthcare is not a business, we do have cover costs. Profits fund new technology, expansion, and staff training to name a few things. The other aspect that gets lost is the innovation of the US medical system. We support the world with innovation.

Here are items that you need to take into consideration with the public option and why it would lead to a single payer system.
1. Medicare cost shifts 30% to private plans and public option would be set at Medicare rates. So we will see more cost shifting. The gap between premiums would grow.
2. Taxes for private insurance would not be in the public option. This makes the public option cheaper. Since these taxes go to fund Firehouses, schools, social programs, etc where will the legislators go to find a new source of tax revenue.

3. The public plan would not have to provide state mandated benefits which increase the cost. Some of the mandates are Autism coverage, Diabetic Supplies, IVF, and others.
Our system may not be perfect but we do have a voice and choice. Please take a look at the report on Medicare Cost Shifting.

Milliman Report on Medicare Cost Shift

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One Response to The Medicare Cost Shift to Private Plans

  1. Sammy says:

    All obama will do is outsource anyways. Just think about the all the lobbyists flocking to Washington DC because of obama’s reckless over-spending of $2 TRILLION in just 6 months, which alone is increasing the National Debt by 20%.

    Politicians take people’s money and reward the large corporations, in this case companies in the health care industry, since they have the money to more effectively lobby politicians. In the end smaller businesses will be hurt.

    Politicians will only reward companies that will be in their best political interest. Honestly, when can you really trust politicians since they are basically professional liars, and being president just means you are the best liar of the time. Why not just give the money directly from the people to the companies and take politicians in government out of the equation?

    obama is going to recklessly spend TRILLIONS of tax payers’ money just to give insurance to about 25% of those who do not have it. Over 50% of people’s income go towards taxes, just imagine how many more people will afford health care insurance if their income is almost doubled because of dramatic tax cuts.

    Competition is what is needed. It lowers prices of products and services, along with developing new innovations. All of which will benefit consumers. You need to remember that monopolistic tendencies can also apply to government.

    The reason why the cost of insurance is high is because politicians in government mandate insurance companies to increase their premiums to pay for ridiculous things. In addition, politicians put up regulations so that Americans are not allowed to get insurance from another state and use the coverage in their own state. This reduces competition making it more expensive for people to get insurance. On top of that medical professionals are not allowed to freely practice their profession in any US state without taking a long and tedious licensing process. This again increases the cost of medical insurance.

    In the end, the problem with most economic issues is too much government intervention of the economy by politicians, who will only tend to do things for political self interest. Just like how obama nationalized GM to pander to its unions. Politicians can barely run government, yet people think they can run a multi-national auto manufacturing company?

    The solution is SMALLER government, LESS spending, and LOWER taxes.

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