What does our public and private insurance overhead look like?

[Recursion]

So, once again, I'm getting this from the Center for Medicare and Medicaid Services' 2014 National Health Expenditures report, which you can download here.

https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Tables.zip

This is from Table 21, "Expenditures, Enrollment and Per Enrollee Estimates of Health Insurance: United States, Calendar Years 1987-2014"

Again, people hate charts apparently, so I'll just paste the numbers:

Total Enrollees:
Employer-sponsored private health insurance: 168 million
Exchange-based direct purchase: 5 million
Medigap: 7 million
Non-exchange direct purchase: 11 million
Medicare: 53 million
Medicaid: 66 million
CHIP: 6 million

So, notice first that the 168 million employer-sponsored private health insurance enrollees are more than half of the US population.

Now, from Table 4, "National Health Expenditures by Source of Funds and Type of Expenditures: Calendar Years 2008-2014", we can see the net cost of private insurance, and public administrative costs:

Private insurance for non-public insurance enrollees: $122 Billion
Private insurance for Medicare enrollees: $29 billion (remember, Medicare provisions a lot of insurance through private providers, though this also includes Medigap)
Private insurance for Medicaid enrollees: $28 billion (so does Medicaid)
Total private insurance costs: $179 Billion
Medicare: $10 Billion
Medicaid: $23 Billion

So what is the overhead cost per person?

Well, the 184 million people with non-Medigap private insurance paid $122 Billion in net private insurance costs, for $663 per person.

The 53 million people on Medicare cost $10 billion in administrative costs, for $188 per person, and paid $29 billion in private insurance costs, or $547 per person, for a total of $735 in overhead per person.

The 66 million people on Medicaid cost $23 billion in administrative costs, for $348 per person, and paid $28 billion in private insurance costs, or $424 per person, for a total of $772 in overhead per person.

Anyways, the point is that on the whole:

Private insurance companies pocket a total of $194 billion dollars a year, $57 billion of it from public insurance enrollees and $137 billion of it from people not on public insurance. (For shorthand we call this "profit", though obviously insurance companies do have actual administrative costs too, like the public programs do.)

That $194 billion is 6% of the $3 Trillion we spend on healthcare each year.

The $137 billion that doesn't come via Medicare or Medicaid is 4% of the $3 Trillion we spend on healthcare each year.

Overhead is bad, but it's not why we spend twice as much as the rest of the world.

[merrily]

1. And?

[Recursion]

2. Good question. What do those numbers tell you? (nt)

[merrily]

3. It's your OP. What did you want it to tell me?

[Recursion]

4. I wanted people to talk about overhead and use the actual numbers we have

But, OK, the takeaway was the last sentence:

Insurance overhead, including profit, is not why we have the most expensive healthcare system in the world.

[merrily]

5. Okay, but why did you want to me to know that?

So, I would support a type of Medicare for All that focuses even more on cost cutting than does Medicare? Or so I would conclude there's not much point to pushing for Medicare for all.

I don't know why we're playing 20 questions here.

[merrily]

7. Ok, I saw the other thread you put up.

http://www.democraticunderground.com/12511079820

[enid602]

6. insurance

Well, I think overhead is now limited under ACA to about 20%, which is horrible, compared with the rest of the developed world. In France, which also has insurance mandated universal healthcare (like ACA), it is only about 7%. But the 20% in the US is a great improvement over the industry's traditionally uncontrolled overhead. France has 5 health insurance companies, whereas the US insurance market has hundreds of insurance companies. Our insurance industry is heavily regulated, and insurance companies can't operate over state lines. Insurance deregulation is a must.