1. Medicare administrative costs are approximately $500 per year per person covered by Medicare. This is about 4.5% of the total annual health care expenses covered by Medicare. U.S. private health insurance administration costs are approximately $490 per year per person covered by private health insurance, about 8.5% of the total annual health care expenses covered by private insurers.
Consider a proposal under which everyone in the U.S. who currently has private health insurance would be offered Medicare insurance in the same way that people over age 65 receive it. What do you expect would be the effect on Medicare administration cost per person covered by Medicare? Would it rise? Fall? Stay about the same? Explain carefully what you base your prediction on. In answering, try to think what insurance administration costs are mostly related to. Are they proportional to the number of people covered? Do they also depend on the number of treatments the people receive? To answer this question, what are the most important differences between people currently covered by Medicare and other people who have private health insurance?
1. Medicare administrative costs are approximately $500 per year per person covered by Medicare. This is about 4.5% of the total annual health care expenses covered by Medicare. U.S. private health insurance administration costs are approximately $490 per year per person covered by private health insurance, about 8.5% of the total annual health care expenses covered by private insurers.
Consider a proposal under which everyone in the U.S. who currently has private health insurance would be offered Medicare insurance in the same way that people over age 65 receive it. What do you expect would be the effect on Medicare administration cost per person covered by Medicare? Would it rise? Fall? Stay about the same? Explain carefully what you base your prediction on. In answering, try to think what insurance administration costs are mostly related to. Are they proportional to the number of people covered? Do they also depend on the number of treatments the people receive? To answer this question, what are the most important differences between people currently covered by Medicare and other people who have private health insurance?
