Three Leftists Sort of Say Public Medicare Advantage More Efficient than Traditional Medicare

Three left-wing entrepreneurs -- who have "invested" in a 2015 start-up that wants to take advantage of the Obama administration's "big data" initiatives -- have found that public Part C Medicare Advantage plans are more "efficient" than traditional Medicare. Whether efficiency is even a good way to measure health insurance is debatable but the lefties conclude (see Note)

"... our results suggest that there are large efficiencies from ensuring that at least some managed care option is available to (Medicare) enrollees (in all counties)."

After reaching that conclusion however they never answer the question in the title of their research (see image): "Is Medicare Advantage More Efficient than Traditional Medicare?" The three leftists are long time critics of what they call -- incorrectly -- private Medicare. So it is interesting that they have reached these conclusions and actually published them. Maybe it's something to do with becoming capitalists.

Still there are only a few reasons to choose a public Part C Medicare health plan (not all public Part C plans use the brand Medicare Advantage and many are not even based on the Medicare Advantage part of the Part C program) and its efficiency is not one of them. The reasons are:

• My preferred/favorite/nearest provider or providers accept a public Part C health plan I can join
• I am not risk averse and I do not want the almost total financial protection of private Medigap insurance (but I understand that Medigap is almost always much more expensive upfront and out of pocket ongoing than a Part C plan)
• I understand all the rules of health maintenance organizations (HMOs) and like networks (usually you have been in one for 30-40 years and have no problems with the HMO approach)

The plurality of people on Medicare get a private group retiree plan from a former employer (but increasingly these group retiree plans are also HMOs or HMO-like). Part C is the second most popular choice. Private Medigap plans are the third most likely choice. About 10% or so of Medicare beneficiaries are on Medicaid and have no need for a private retiree or Medigap plan or public Part C plan.

Note: The quote is from a summary of the entrepreneurs' article published in a free National Bureau of Economic Research newsletter; the actual research is behind a pay wall.