The Real Data On Medicare Versus Private Insurance by PAUL KRUGMAN

ypm968

June 12, 2011, 4:52 PM
Medicare Versus Private Insurance: The Data
NHE web data (pdf), Table 13. I deflated both sides by the consumer price index.

Note that the table does both a raw comparison and a comparison of “common benefits”, which takes care of the problem of differential coverage. If you look at the bottom of the table, you’ll see that on both comparisons Medicare payments have grown 1 percentage point more slowly than insurance premiums over the past 40 years.That adds up to a lot.

But I gather from the comments that everyone “knows” that it’s the other way around, so I must be inventing the numbers.

Oh, one more thing: is Medicare just shifting costs onto the private sector? The answer is no.

Update — your questions answered:

What happened in 1993-1997 was the shift to HMOs, which temporarily squeezed private insurance costs. What happened from 2002 to 2009 was Medicare Part D: Medicare started covering drug costs, which caused its total spending to rise faster than private health insurance. However, if you look at the “common coverage” numbers, you see that Medicare spending for existing coverage continued to lag behind insurance premiums.

As always, if I make an assertion that you question, and that assertion comes with a link, click on the link before arguing, OK?