Thursday, March 20, 2008

Why one big pool -- Medicare for all -- will reduce government spending

The February 2008 edition of Illinois Issues has this insightful piece in Bethany Jaeger's cover story called Collective Action:

Illinois paid nearly $3.9 billion in payroll, or "personal services," in fiscal year 2007. That doesn't include higher education or retirement or Social Security benefits for more than 72,300 employees. But the cost of payroll is $1 billion less than during the previous administration of Gov. George Ryan, who had about 14,000 more employees.

Despite the Blagojevich Administration's smaller head count, group health insurance costs drastically increased to $1.3 billion in fiscal year 2007, compared with $876 million in fiscal year '02.

Wow. So health care is about a third of the cost of salaries -- and the cost of health care is skyrocketing.

Underneath every local government fiscal report is the same story: much higher group health insurance costs.

An answer is to put all public employees in the same government-financed health insurance pool as every one else. It's called Medicare. And it should be expanded to include every one, particularly public employees.

With one big pool, the administrative costs of running each of these group health insurance pools for each level of government disappear. And we can simplify (and almost eliminate) billings with providers since there is only one payor to deal with: Medicare.

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