Well, they counter, Medicare has been better at controlling administrative costs than private insurance companies. Economist Robert Book examined that claim and concluded that Medicare's per-beneficiary administrative costs are substantially higher than the administrative costs of private health plans. Democrats' argument to the contrary is based on expressing administrative costs as a share of total costs. Book explains: "If X Insurance Co. insures a healthy 25-year-old and he makes zero claims in a year, then administrative costs are the only costs." By contrast, Medicare's population is (by definition) disproportionately elderly, disabled, or suffering end-of-life medical crises. In fact, Book argues, Medicare's per-beneficiary costs are rising faster than those of private insurance companies. And Medicare's costs have risen further and faster than any of the sunny estimates politicians have offered over the past 40 years. Medicare spending doubled every four years between 1966 and 1980. Without adding any further burdens, Medicare has unfunded future obligations of $36 trillion.
Another proposal contained in some of the Democrats' legislation is government-approved health insurance. All private insurers would be required to provide certain benefits or be ineligible to "compete" with the public option. Has anyone in the Obama administration checked the facts on this? State governments throughout the nation have been piling mandates on insurance companies for the past 25 years. The Council for Affordable Health Insurance keeps track. Forty-five states mandate alcohol- and drug-abuse treatment. Four require coverage for hormone replacement therapy. Bone density scans are required by 16 states. Contraceptives must be covered in 29 states, and in vitro fertilization in 15. Forty-four states mandate coverage of optometrist services; 18 require infant hearing screenings, and the list goes on. Every mandate increases the price of insurance and makes it progressively more difficult for the healthy uninsured to find no-frills, catastrophic coverage. It also increases the cost of each of those "covered" procedures because when they are paid for by third parties instead of out-of-pocket by patients, patients become less cost-sensitive.
During the campaign, John McCain proposed to allow interstate shopping for health insurance, which would at least introduce an element of competition and cost-consciousness into the system. Obama ran ads deceptively claiming that this (and other proposals) would cause people to lose the coverage they already had.
Obama is the last man to talk of keeping others honest.