Medicare Loses Nearly Four Times as Much Money as Health Insurers Make
3:48 PM, Mar 3, 2011 • By JEFFREY H. ANDERSON
In a newly released report, the Government Accountability Office (GAO) estimates that, in fiscal year 2010, $48 billion in taxpayer money was squandered on fraudulent or improper Medicare claims. Meanwhile, the nation’s ten largest health insurance companies made combined profits of $12.7 billion in 2010 (according to Fortune 500). In other words, for every $1 made by the nation’s ten largest insurers, Medicare lost nearly $4.
This is sobering news for the minority of Americans who (for some reason) continue to think that government-run health care is a model of efficiency and cost-effectiveness. Last year, total outlays for Medicare were $509 billion; therefore, Medicare spent nearly 10 percent of its outlays on fraudulent or improper claims. Actually, it may have been even worse than that: The GAO writes that this $48 billion in taxpayer money that went down the drain doesn’t even represent Medicare’s full tally of lost revenue, since it “did not include improper payments in its Part D prescription drug benefit, for which the agency has not yet estimated a total amount.”
The combined profits of the nation’s ten largest health insurers are down 2 percent from 2008. In fact, the nation's ten largest health insurers’ combined profits last year were less than the profits that Walmart — a supporter of Obamacare — made all by itself. Walmart made $14.3 billion last year, up 12 percent from 2008. (On the Fortune 500 list, Walmart’s profits also dwarf the profits of all but one oil company.)
True, private insurers may never manage to make nearly as much money as government-run heath care programs manage to lose. Still, there is good news on the horizon for insurers: If Obamacare isn’t repealed, then, as of 2014, every American will be required to buy their product (or a federally mandated version of it) under penalty of law. Moreover, the Congressional Budget Office estimates that $1 trillion would be funneled from taxpayers, through Washington, to those same insurers, from 2014 to 2025. Ever wonder why insurers didn’t oppose Obamacare?