Funny thing. The people of Greenland also don’t want to pay for it. Instead the people of Denmark pay for it.
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Without getting into the factual debate again….what if it wasn’t? What if your total cost of your health insurance in a government system was more than what you’re paying private insurers now? Would you still have the same opinion?
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Probably not. But that’s not happening. The overhead for Medicare is something like 4%. For private insurance, I’ve seen estimates of anywhere from 8% to 25% (I’m assuming it depends on the carrier). There is no skim in Medicare (which is why Congress passed Medicare Advantage, to let insurance companies get some skim there, too).
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I suspect most folks who have private insurance also would not support the switch if it costs more. Which is why we don’t have it. Despite your confidence that it wouldn’t cost more, all the states that have crunched the numbers find that it does. We don’t have to get into the details again - suffice it to say that private insurance is only a portion of the overall health care market, so those savings aren’t enough to cover the expenses of paying for all the currently uninsured and raising Medicaid coverage rates and scope to the average.
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total cost = per capita cost x number insured
We need to work on per capita cost, that’s what everyone is complaining about.
We do know there are a bunch of hands in the money pot grabbing dollars (including beneficiaries who do their share of dollar grab with unhealthy lifestyles).
Feels like a tragedy of the commons, with the commons being the pot of money (much is federal dollars) and the tragedy being suboptimal (far from optimal?) health outcomes per unit cost and presumably a finite resource of dollars in the money pot.
Do you think in the US this is a problem with no economic solution (set aside politically feasible for the moment)?
Do you think we cannot even do 20% better?
Say 20% better outcome for same cost or same outcome for 20% less cost?
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This is a red herring here. There is no debating a what if scenario. The data I have seen shows that there are inefficiencies in the ENTIRE chain of healthcare and the worst skim is at the insurance level.
I wouldn’t want to bring up the Delay, Deny, Depose topic, no wait I do want to bring it up. We know for a FACT that insurance takes money and then denies treatment. We know for a fact that insurance post record profits at times and Americans are NOT healthier.
So, before you start making stuff up to discuss, let’s look at what is actually, for real, broken in the current system.
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How about taking these costs out of the system…
Insurance CEO pay in 2024–2025 has reached record highs, with top executives at major firms frequently earning over
$20–$30 million annually, driven by substantial stock awards and bonuses, even as consumers face rising premiums. Major health insurer CEOs like UnitedHealth’s Andrew Witty and Cigna’s David Cordani commanded over $20–$26 million in total compensation in 2024
Just take the frikken profit out of the equation and public health care would be cheaper.
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I’ve been seeing videos of Minnesota and the large abuse of welfare. It seems that the taxpayer is fairly generous with handouts or does this vary from state to state?
I’m from the UK, so I don’t know too much about US welfare but it looks OK to me if Minnesota is anything to go by.
No, it wouldn’t. Because no matter how frustrating the “frikken profit” is, it’s very tiny compared to the size of the health care system. It’s only a small part of private health insurance, and private health insurance is only a small part of health care expenditures.
The numbers. In 2024 (last available full year data), here are the total amounts expended in the three large insurance buckets (all numbers in billions):
-
Private health insurance: $1,645
Medicare: $1,118
Medicaid: $ 932
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Total for insurance: $3,694
You can see right away the first issue. Private insurance is already only about 43% of insurance. In 2024, private insurance had a total administrative load (all costs of insurance other than paying for health care) of about 11%, or about $177 billion. If you could reduce that to 1.3% (the public portion of Medicare costs), you’d reduce health insurance spending by a total of 4% by switching to a public option.
But. The uninsured rate in this country is about 8.2%. If you go to a public option, all those people are now added to coverage. More than double what you save in administrative costs.
But. If you go to a public option, all the Medicaid providers will now get paid at a standard rate, rather than the huge discount we now pay them at. Medicaid costs go up by a least a third (they get paid at 75% the Medicare rates) once there’s no longer a separate “Poor Person Program.” Again, almost double what you save in administrative costs.
The cost of providing coverage to the uninsured and eliminating the massive discounts that we force poor people and their providers to accept for Medicaid is 4X the savings you get from completely reducing private provider administrative load to Medicare levels. Because the administrative load is small relative to how much we would have to spend to cover the uninsured, and how much we save by forcing poor people into a program with super-low reimbursement rates.
Note: you would have better outcomes under a public program. The uninsured finally get health insurance coverage! The poor get access to a wider range of providers, and don’t get shuttled into the worst time slots and facilities! But you would have to increase the amount of money going into the system, but much more than you save by cutting out the private provider costs. And you lose a lot of political support if people have to pay more in the public program than they were in private.
Data at: Historical | CMS - download the ZIP file with the 2024 data.
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Your post prompted me to go to google. The results I see are not abuse ‘in’ the system but abuse ‘of’ the system. So that is a clarification I needed and I see you wrote it that way.
The next part I see is that this was mostly prompted during the Covid-19 pandemic where many many people applied for stuff that had low oversight or was sped up to get money out quickly. So, to that point I know that there were similar issues in other states. In my area we all know of a restaurant owner that got funds to make payroll, but then closed down one location anyway. That and all the stories about money that was never paid back because the loans were ‘forgiven’ is another issue from that time.
Trying to find any news on Ground.news and it seems the only articles are listed as right leaning and they seem to have the same age old arguments.
I would say that picking the height of a crisis and impacts to welfare and then trying to correlate that to universal healthcare is disingenuous and misleading.
Ok, so we are getting into the weeds on what we mean by saving money I guess.
If a person’s ‘taxes’ go up, but their out of pocket to healthcare goes down…that is not an increase to me. Once there is universal healthcare then we cut out thousand$$ of dollars in personal spending.
This is what I mean…
Universal health care can be cheaper than private insurance, with studies indicating that a single-payer system in the U.S. could save money by reducing administrative overhead, negotiating lower drug prices, and eliminating high insurer profits. While taxes might increase, overall costs for individuals—including premiums, deductibles, and out-of-pocket expenses—are generally lower.
and
Lower Per-Person Cost: Projections indicate that universal health care could reduce per-person annual costs to $6,000–$8,000, compared to the current $12,914 in private-based systems.
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I know that’s what you mean, but it’s probably not true. You didn’t provide links to your quotes, but that’s the general position of advocates of single-payer health programs. The problem is that there just isn’t enough money that can be saved out of the private insurance system to result in those kinds of dollar changes. Total health care expenses in the U.S. in 2024 were about $5,000 billion, of which only $1,644 billion was private insurance, of which only $177 billion was all of the costs of private insurance.
You can’t possibly save enough money in reducing the profits of private insurance companies, or even reducing their administrative load down to Medicare levels, to cover the cost of providing insurance to the currently uninsured, or the costs of giving people who currently have Medicaid access to the same insurance as everyone else. Private insurance is just too small a portion of health care expenditures for that to be true.
Which is why when states have tried to make the numbers work, they’ve failed. Their voters’ taxes have to go up more than their out of pocket to health care goes down. Because they’re not just paying for their own health insurance coverage, but they have to foot the bill to add the uninsured in and to upgrade the currently-discounted Medicaid program.
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I wasn’t concentrating on the abuse, but the generous welfare system that seemed on a par with that in Western Europe.
The post from dlbuffy wondered, paraphrasing, “how much can we save by cutting profits” in health care generally not just insurance profits.
Reading your response, you considered profit in the insurance portion of healthcare only (vs in health care generally) and then asked how much of the uninsured’s total costs it would cover - you say about 1/4:
On the other hand, one could say “if we slice insurance profits, then we can cover 1/4 of the uninsured.”
Maybe that’s a good start (25% of uninsured now have Medicare coverage)?
Are there no other savings to be had in health care other than insurance profits?
What about total cost, profit and otherwise, including healthier lifestyles?
Are there no other excessive costs in the health care industry to find efficiencies than just insurer profits?
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I wonder. Reader note, 2012 study.
Billing and insurance-related administrative costs in United States’ health care: synthesis of micro-costing evidence
The United States’ multiple-payer health care system requires substantial effort and costs for administration, with billing and insurance-related (BIR) activities comprising a large but incompletely characterized proportion. A number of studies have quantified BIR costs for specific health care sectors, using micro-costing techniques. However, variation in the types of payers, providers, and BIR activities across studies complicates estimation of system-wide costs. Using a consistent and comprehensive definition of BIR (including both public and private payers, all providers, and all types of BIR activities), we synthesized and updated available micro-costing evidence in order to estimate total and added BIR costs for the U.S. health care system in 2012.
…
Our base case calculation is that BIR costs in the U.S. totaled $471 billion in 2012.
…
About $375 billion (80%) of annual BIR costs constitutes additional spending compared to a simplified financing system.
Would $375 billion (or some smaller number like $300B) be enough to cover the uninsured as well as cover medicaid at medicare levels? Of course I don’t know for sure. Medicare cost about $900 billion a year with Medicaid another $100 billion on top of it. Is there a way to look up the total outlays for ACA? I could not find such data but with 9% on ACA and 11% uninsured, I think $375B (or $300B) would come pretty close - especially if those of us employed are still paying a monthly fee.
But I digress. As much as I would like to see a single-payer system, It is difficult to imagine that all those massive insurance companies would ever let such pass. Plus, that would be a ton of lost jobs both within insurance and within the administration of healthcare facilities. Good, high-paying white collar jobs that would go away almost instantly.
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For an extremely reasonable path (the other paths strike me as impossible mixed with stupid leading in long term to bankruptcy) we need to actually do PUBLIC HEALTH as an overall strategy. Public Health puts strong emphasis on education in “healther lifestyles” while also streamlining and consolidating supply of medical personnel, equipment, medicines, and maximizing choice for the wealthier classes.
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That’s not slicing insurance company profits. That’s all private industry costs - if you zeroed them out, you might theoretically save enough money equal to the added expense of adding 1/4 of the uninsured onto a public option. I say “might,” because the population in private insurance is different than that of Medicare - it’s more age-diverse, has lower medical bills, and is larger. So it’s not certain whether you get quite the same level of admin load with that population as Medicare.
But anyway - I’m not arguing about the pros and cons of doing that. That’s a “should” question, not a fact question. What I’m saying is that the money you save from getting rid of private insurance (admin costs and premiums) isn’t enough to cover the costs of the public system. You don’t have a situation where people would pay less in taxes (overall) than they were previously paying in premiums based on the savings from getting rid of private insurance. The various - and at times very serious - efforts to set up state-level single-payer programs have often foundered on that point. There’s no real way to make the dollars work without having some taxpayers (and often quite a lot of taxpayers) paying more in taxes than they were in premiums.
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I remember. Though it is not as simple as that. We don’t have a public option because of Lieberman, as I recall. The ACA needed his vote, and he wouldn’t give it if that was in there. The states that have tried it (just Vermont?) were too small to have an effective “pool”.
Just letting the government administrate it, putting no extra people on the system, saves money. Instead, we put insurance (with their skim) firmly between patients and their doctors as part of a government program (ACA). Just cut out that little detail, changing nothing else, and we save money. Insurance is not useful, it’s just a profit machine for insurance companies.
I recognize that restructuring the entire health care system can’t be done in one swipe. You have to take one bit and fix it. Then take another bit and fix it. We may never get to what the rest of the civilized world has, but we can get a lot closer than we are presently.
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More than just Vermont. Also California, Colorado, Massachusetts, Oregon, and others. They all run into the same problem - they cost more money to implement than people are currently paying into the system, even when you account for tax payments replacing premiums. Because once you add in all the uninsured and “top off” all the heavily discounted reimbursement rates that the Medicaid providers are stuck with, the added expense just overwhelms any savings from the private system.
Single-Payer Health Care: A Tale of 3 States | Third Way
As noted in that article, Vermont should have been the easy case: “A consultant on the Vermont single-payer plan said, “If you can’t do it in Vermont, with one private health plan and low uninsured rates, then the amount of disruption you would have nationally with winners and losers would be enormous.””
Just not very much money, relative to the system. Insurance company earnings are large in absolute terms, but very small compared to total U.S. health care expenditures of $5T per year.
Of course insurance is useful, which is why so many people buy it in tons of different contexts. It’s beneficial to be able to “trade” a wildly uncertain cost (“what will my collision expenses for my car be next year?”) for a fixed cost (“my premiums and deductible are X and Y for next year.”).
OK…I’ll rephrase. HEALTH insurance is not useful. Sure, home and auto and life can be. But health insurance can better be handled by government. Arguably, home, auto, and life probably wouldn’t be. Less overhead, and also doctor’s offices won’t have to have claims specialists for many different companies. One set of criteria. Requires fewer workers**.
If you do it comparatively, you’ll never find a savings. As you say, the expenditures are HUGE in absolute terms. You’re falling into the trap of “a few million here, a few million there, eventually you’re talking real money”. (Forget the source for that quote.) A few million IS a lot of money all by itself. Doesn’t matter if we’re talking $5B or $5T or $5Q, saving millions is still saving millions.
Or, you can think of it as the Colorado River. It didn’t carve the Grand Canyon in a century. It took hundreds of millions of years, cutting a few grains of rock at a time. Eventually, you get the Grand Canyon. For our heath care system, fix one bit. Then fix another. Eventually you may hit something that can’t be fixed because it is a feature of our system. That’s not a reason not to fix everything else that you can fix.
**During the run-up to the ACA there were numerous articles about how MD offices had to have multiple claims persons because all the insurance companies were different, and you needed an “expert” to deal with the difference correctly.
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