Sunday, August 2, 2009

Private Insurance Vs. Medicare

Krugman had an interesting piece a few days back that I set aside and forgot about. I stumbled across it a bit ago, and I think it's important enough to highlight:
...since 1970 Medicare costs per beneficiary have risen at an annual rate of 8.8% — but insurance premiums have risen at an annual rate of 9.9%.
I just calculated (1.099/1.088)^40, which should represent a 9.9% annual rise divided by an 8.8 percent annual rise, over a 40 year period; the result is 1.495. In other words, as Krugman points out, if insurance premiums had risen "only" as fast as medicare costs, they'd be a third less than they are. What he doesn't point out is the rising trend of medical insurance companies to find any and every reason to deny claims. So that 50% excess cost doesn't even buy you the same care, but much less care and much more hassle.

1 comment:

Dean Wormer said...

Deny claims and ding you more for the annual deductible percentage each time you use them in order to make you not want to use your paid for health care because it's too expensive.

I hate those guys.