How to cut health insurance costs by 18%

Got your attention? The State has put a wealth of disclosure from health insurers and providers up on the web. I lack the time and, frankly, the chops to really get at all the good stuff but I did find a few interesting pieces of disclosure.

In Partners’s disclosure, they note the rates they charge insurers could have been 18% lower in 2008, if government funded programs had covered their costs. (Yes, I am naively assuming that the insurers would pass that savings along to consumers.)

Put another way, Partners had negative operating margins of -33% on Medicare and -44% on Medicaid in 2009.

Also, floating around in the ether around the federal health care reform debate is a proposal to cut Medicare reimbursement by 21% (ah-ha, savings!). That’s not going to happen and if it did, it won’t help things.

So, the hospitals eat these losses and lose money, right? No, privately insured customers end up subsidizing the difference. Puts the “Medicare for All” argument in a different light doesn’t it?

So, am I advocating for a massive expansion of Medicaid and Medicare spending? No, I’m not. What I’m saying is that both these very expensive programs are also getting a hidden subsidy from private payers. Expanding either of them will increase that subsidy.