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More on Administrative Costs in Medicare

Reader BL sent in a smart dissent to my post yesterday on administrative costs in Medicare and private health insurance:

I wish you wouldn't implicitly concede that the collection of premiums by the IRS should by rights be counted a significant hidden administrative cost for the Medicare program - unless you have some good reason to think that Medicare premium collection is a really significant marginal cost for the IRS. We'd have a huge IRS with or without the Medicare program, and I would guess that premium collection adds fairly little to the cost of running the IRS. (Correct me if I'm wrong.) If a public plan could likewise take advantage of a pre-existing premium collection apparatus to minimize its own admin expenses, it seems to me that should legitimately count as a significant admin cost saving.

That's fair. Money saved is money saved.

By Ezra Klein  |  July 8, 2009; 4:20 PM ET
Categories:  Health Reform  
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Comments

Actually this is a good point. We do not count as administrative expenses the cost of employers collecting premiums from their employees, etc.

Posted by: scott1959 | July 8, 2009 4:34 PM | Report abuse

In your previous post, who are the experts you spoke to that estimated actual costs at 2-3 times more than everyone else says? I would like to get that on the record.

Posted by: Drew_Miller_Hates_IDs_That_Dont_Allow_Spaces | July 8, 2009 4:38 PM | Report abuse

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