I recently received bills for surgery I underwent in November. According to the summary total charges were $45,473.60 of which Medicare paid $3,413.65, my supplement insurance paid $870.84, and I paid all of $20. My claim summary triumphantly proclaims "patient savings" as $41,189.11!
What a deal; collectively we only paid 9.2% of the sticker price! Try this next time you buy a car.
What I think it really says is that the charges were not real. No real business could run that way. It's an example of the dysfunction in our entire medical system pricing scheme.
The underlying problem is if I had gone to the hospital directly and asked them to quote a price it is more likely to have been closer to $45,000 than to the $4,200 actually paid between Medicare, my insurer, and myself.
Since turning 65 I've had the benefit of Medicare coverage. However, a rough calculation of what I've paid, and expect to pay in the future, in Medicare taxes leads me to conclude that Medicare is likely to make money off me in the long-run. It would have been better for Mrs THC and I to instead put all our Medicare tax payments into a tax-exempt investment vehicle and use it to pay for our own care post-65. Instead, we are helping others pay for their medical costs. I still await someone to thank me for this.
The hospital charges point out the problem with the magical thinking Medicare For All solution advocated by progressives. Medicare and, even more so, Medicaid payments are well below those of private insurance companies. Higher private insurance payments subsidize Medicare and Medicaid by allowing hospitals and doctors to recoup their costs. If Medicare payments were to remain the same under Medicare For All many hospitals and doctor practices could not make a go of it. If Medicare payments were to increase to close the gap, the alleged cost benefits of Medicare For All would vanish in the wind.
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