Skip to comments.Medicare Loses Nearly Four Times as Much Money as Health Insurers Make
Posted on 03/03/2011 1:48:32 PM PST by mdittmar
In a newly released report, the Government Accountability Office (GAO) estimates that, in fiscal year 2010, $48 billion in taxpayer money was squandered on fraudulent or improper Medicare claims. Meanwhile, the nations ten largest health insurance companies made combined profits of $12.7 billion in 2010 (according to Fortune 500). In other words, for every $1 made by the nations ten largest insurers, Medicare lost nearly $4.
This is sobering news for the minority of Americans who (for some reason) continue to think that government-run health care is a model of efficiency and cost-effectiveness. Last year, total outlays for Medicare were $509 billion; therefore, Medicare spent nearly 10 percent of its outlays on fraudulent or improper claims. Actually, it may have been even worse than that: The GAO writes that this $48 billion in taxpayer money that went down the drain doesnt even represent Medicares full tally of lost revenue, since it did not include improper payments in its Part D prescription drug benefit, for which the agency has not yet estimated a total amount.
The Democrats are screaming about the Republicans wanting to cut a puny $61 billion from the budget when this GAO report identified over $200 billion of waste by duplication alone. That could easily be doubled by identifying the fraud involved in all government programs. God bless Sen. Tom Coburn (R-OK) for getting this report published. It certainly should be thrown in the face of Big Government lovers of both parties.
If you loved Medicare, you’ll love Obamacare.
Last year, the profits of the ten largest insurance companies in America were just over $8 billion — combined. No single insurance company made even five percent of what Medicare reportedly loses in fraud.
Difficult to understand why there is such a huge disparity in the data - since Medicare claims are processed by those same health insurance carriers. The layers of Government bureaucracy/interface must account for some of it.
Since the beginning of the Medicare program, CMS has contracted with private companies to operate as intermediaries between the government and medical providers. These contractors are commonly already in the insurance or health care area. Contracted processes include claims and payment processing, call center services, clinician enrollment, and fraud investigation.
Well, it’s hardly a fair comparison. Private insurers cover more than 5 times as many people as Medicare. Thus, if each sector covered the identical number of lives, Medicare’s losses would be about 20 times that of private insurers. Yet progressives continue to insist that Medicare is the most efficient insurance plan in the entire country.