Medicare a great healthcare model

Apparently, Paul Ryan and the Republican members of the House are unaware of both the history of health care finance and simple economics. What on earth would make them think that health insurance purchased from health insurance companies would be more affordable than Medicare?

The CEO of Aetna made $23 million last year. The CEO of Medicare (the director of CMS) made less than $250,000. Insurance premiums have to pay the administrative costs (including salaries) of management.

This means that $23 million (and equivalent outrageous salaries of senior management at other private health insurance companies) is paid from insured’s’ premiums. So, why would giving seniors a voucher so they can buy insurance from a health insurance company reduce health care costs? It might reduce the government’s cost if the voucher was small, but for a senior to buy insurance would mean they would have to add considerably more to the “voucher” amount to get equivalent coverage. This would put health care coverage out of the reach of many seniors.

Moreover, Medicare was the first insurance plan in the US interested in reducing costs. Prospective payment policies, such as DRGs and APCs, were instituted by Medicare starting in the 1980s long before other insurance companies had any interest in reducing health care costs. In those days health care providers, such as hospitals or doctors, charged whatever they wanted and kept patients in the hospital longer than necessary and insurance companies paid the bill and passed the costs on the employers in increased premiums.

When Medicare implemented DRGs and fee schedules, etc. we saw a huge decrease in the average length of stay for inpatient visits and a decrease in unneeded inpatient stays.

Anyone familiar with health care finance history could inform Mr. Ryan why Medicare is such a successful health insurance program. What would be the best thing to do is to implement Medicare for all — a single payer system like all the rest of the western world uses — and we could reduce health care costs substantially.

Cathy O’Brien Libertyville, IL 60048