• A few remarks on Medicare’s administrative cost – ctd.

    A reader took issue with this portion of the Yuval Levin excerpt I shared in my prior post (read that post to catch up):

    …many of Medicare’s most significant administrative costs are just covered by other federal agencies, and so don’t appear on Medicare’s particular budget, but are still huge costs of the program. The IRS collects the taxes that fund the program; Social Security collects many of the premiums paid by beneficiaries; HHS pays for a great deal of what you would think of as basic overhead, but doesn’t put it on the Medicare program’s budget.

    A look at Table III.B1 on page 51 of the 2012 Trustees report (PDF) shows the amounts Medicare does reimburse the Treasury (IRS), SSA, and HHS for administrative expenses pertaining to Part A. Other tables later in the report do the same for other parts of the program (see comments to this post). I suppose the charge could be that there are still other administrative costs that are provided by one or several of these agencies for which Medicare does not reimburse. If so, I’d l like to know exactly what the Trustees are missing in their report. Right now, my best hypothesis is “nothing.” Solid evidence would be necessary to convince me otherwise.

    UPDATE: See comments for pointers to Medicare admin costs for other parts of the program.

    Comments closed
    • Uh, doesn’t this pretty much directly contradict the point Levin was making and others were trying to support? Am I missing something?

    • Just to be pedantic, Table III.B1 is just for Part A of Medicare (the part funded by the payroll taxes). Scroll down for the equivalent charts for the other parts of Medicare that are funded through general funds transfers.

    • On page 55 of the cited document it says: “All HI administrative expenses incurred by
      the Department of Health and Human Services, the Social Security
      Administration, the Department of the Treasury (including the
      Internal Revenue Service), and the Department of Justice in
      administering HI are charged to the trust fund.”

      So Medicare definitely gets charged all of these expenses.

      • That’s Part A. To really nail it, one would want to see a similar statement about the other parts of Medicare (B and D and, by implication, C). I haven’t scoured the report. Is it as explicit for the other parts?

        • I know this is a long-dead thread, but I was looking up Medicare expenditures for a debate and found this via a Google search. I did look through the entire report, and similar statements appear on pages 93-94 for Part B and page 118 for Part D. I just wanted to make sure this was recorded for posterity sake.

    • I looked at page 51. There are no entries for contractors other than those in benefit integrity. Each part of Medicare, A, B, C and D has large MACs who make a ton of money performing the mechanics of paying claims and denying them.

      Furthermore, the stimulus act prior to the ACA allowed for 19B in healthcare IT. Since then Medicare has built amazingly sophisticated integrated databases. Where is IT on the list?