Medicare is more efficent than under-65 health insurance system.by Denise Early on Jun. 22, 2011, under Health
A reader of my last post, “Medicare: Young vs Old”, provided a link to an wonkish article on U.S. health care spending and how it slowed down to record lows from 2010 to 2011. The article is titled, Deceleration in U.S. healthcare costs continues“, and it shows that, once again, Medicare is more efficient than the under-65 private health insurance system.
The central facts in the report are in this paragraph:
Over the year ending April 2011, healthcare costs covered by commercial insurance increased by 7.13%, as measured by the S&P Healthcare Economic Commercial Index. Medicare claim costs rose at an annual rate of 2.48%, as measured by the S&P Healthcare Economic Medicare Index. With April’s data, the Medicare index posted another record low annual growth rate in its six-year history.
If Medicare can hold that amazingly low spending growth rate, that bodes well for the future of the program. And given that people covered by Medicare are much older (and probably sicker) than people in the under-65 market, the difference between the two growth rates is kind of shocking to me.
It is common knowledge that when the economy is bad, people don’t go to the doctor – even for checkups and routine exams. But I think the slow down in spending for people under 65 is also due to their changing health insurance coverage. More and more working people have health insurance plans with deductibles of $2,500 or $5,000. This definitely makes people think twice about getting medical care, especially things like elective surgery.
But why are seniors getting less care when they don’t have big deductibles and co-insurance? (Ninety percent of seniors have more coverage than just Medicare.) It would be interesting to know if anyone has studied seniors with Medicare supplements and if they have been going to the doctor less. Those folks have excellent coverage and almost no co-pays, so the bad economy should not keep them from getting medical care. They have paid for excellent coverage, so why not use it?
An interesting study would be to talk to seniors to ask them if they’ve been going to the doctor less, or if they have put off tests, procedures, or surgery.