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Medicare saves money

Krugman makes the point in his column today that we should expand Medicare if we want to save money.

And here's the data for that, which he put on his blog last week.

Here's a chart showing the rising costs of Medicare. As Krugman says, looks bad in isolation.

Then we compare it to private insurance.

Now that's bending the cost curve. And it's better than it looks. While private insurance includes everyone who gets insurance through their employers, and therefore includes a large subset of healthy people, Medicare is focused entirely on the elderly, who are more likely to have more costly medical needs. So if you expand the eligibility for Medicare to, say, everyone 55 and up instead of 65 (or hell, to everybody!), you're actually increasing the base of healthy people in the program, reducing the cost per beneficiary.

The larger point is we don't have a Medicare problem. We have a rising health care costs problem. And Medicare actually does better than private insurance in reigning in those costs.

By fnord12 | June 17, 2011, 9:58 AM | Liberal Outrage

Reference from SuperMegaMonkey

Both private and public medical costs are growing at an alarming rate. But public costs are growing more slowly...     Read More: Here i go again

Reference from SuperMegaMonkey

Spammers recently brought this post on Medicare vs Private Insurance to my attention. Reading it again, (and at the risk of turning this into an all Yglesias-summary blog) i also want to add a point that Matthew Yglesias often makes,...    Read More: A good problem to have