Medicaid Medicare What's Buzzing

Medicare and Medicaid are more cost effective than commercial insurance

Written by Diane Archer

In his latest post for the New York Times, Austin Frakt makes the case that both Medicare and Medicaid for all would bring down health care spending and deliver as good care as commercial insurance (private insurance). In short, Medicare and Medicaid pay less than private insurers for the same care and are more cost effective.

To establish the cost-effectiveness of Medicare and Medicaid, Frakt looks at three studies. A JAMA Internal Medicine study of 26 health care services that have been deemed unnecessary or “low value” finds that they represent about 2.7 percent of Medicare spending. A second study compares Medicare and commercial insurance spending on low-value services in 2009, 2010 and 2011. That study finds that both types of insurance cover these services at about the same frequency.

The third study, also in JAMA Internal Medicine, compares the delivery of low-value care for patients with Medicaid or who are uninsured and patients with commercial insurance, between 2005 and 2011. It too finds the same rate of low-value care for both patient populations. It also finds the same rate of high-value care.

Frakt posits that while you might think that doctors perform more services on patients whose insurers pay them more, these three studies suggest that it is not the case. Rather, it appears that doctors generally treat patients the same regardless of the insurer paying for their services. The differences in the rate of delivery of low-value care stem primarily from local practice patterns and not which insurer is paying for the care.

To be clear, your particular health insurance may not affect the care your doctors will deliver. But, it will determine your access to care–which doctors and hospitals will see you with that insurance. So, the quality of your care through Medicaid may be as good as the care you receive through private insurers. But, with Medicaid, you may struggle to access that care. (Click here to learn why Medicaid matters to all of us.)

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