There's No Debate That Medicare Costs Less Than Private Insurance

Paul Krugman

Photo: NYtimes.com

I’ve written recently about what should be a well-known fact: Medicare spending has risen less than premiums on private health insurance. This shouldn’t be a controversial proposition; it comes straight from the centre for Medicare and Medicaid Services health expenditure data. You can argue about why it’s happening and whether it’s sustainable, but the fact shouldn’t be up for dispute.But the usual suspects know, just know, that it can’t be true. Austin Frakt takes on one hatchet job, which relies on the also true fact that health spending outside Medicare and Medicaid has risen more slowly than Medicare spending. As Frakt points out, this number has been held down by the rising number of Americans without insurance. So the private sector has achieved “cost control” by just not providing coverage.

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