An assessment of the Paul Ryan Medicare Reform proposal from the CBO undertaken at the request of Paul Ryan concludes that the total cost added to health care expenditures in the United States by the existence of the private insurance sector is 11%. My own calculations concerning the actual costs born by individuals forced to use non-group private insurance is 17.6%. These are not the same assessments. The CBO is looking at total cost and I was looking at the cost paid by individuals outside of employer provided insurance. The actual costs that are spent on the black hole of private insurance are probably somewhere between these two numbers. And a report from the CRS or the GAO (who are more attuned to economic considerations as opposed to specifically assessing the government budget) would probably reveal the actual costs that private insurance places on the provisioning of medical care in the United States.
But lets see what 11% does for us:
There is much talk of Keynesianism and of stimulus and of deficits. Much talk of reducing the deficit and more than a little about the blessings of spending as opposed to tax cutting that surrounds what is called "the multiplier". The multiplier is the assessment of what happens to the additional money in the private economy depending on whether it is injected by virtue of infrastructure spending or simply by tax cutting. What is seemingly avoided is the assessment of economic effects depending on what "class" gets the money. Infrastructure spending is said to do more for the economy because it guarantees that the money will be spent and not simply saved. But if the "spent" money winds up in the hands of the capital owners without passing through the hands of the workers, or ff the workers are Chinese H1B's who send the money to China then the "bang for the buck" is not all that much better. I bring this into the discussion because we all saw the FED create trillions of dollars and hand it to the capitalist class and the result was not "stimulating". The money died instantly and made the rich more rich. The REAL gage of how "stimulating" a stimulus will be (e.g. tax cuts or infrastructure) is the degree to which the money finds its way into the hands of the middle class.
And the idea of increasing the disposable income of the middle class of the United States by 11% per year forever is pretty damned stimulating. Unlike the one time checks that were sent out by George Pinocchio Bush in 2001 and 2008, a permanent adjustment to disposable income is like a permanent tax cut. It is NOT Keynesian in that it is NOT temporary. So the stupidity argument from the rightarded fascists concerning Ricardian Equivalence is no longer an available fig leaf. The checks from Bush were for $650 or so (amount varied), but it was a one shot deal and much less than the yearly amount that would be saved by "Medicare Buy In". The typical family of 4 spends ten thousand a year on health care (all expenses combined). 11% of that is more than a thousand a year and is actually the same as a TAX FREE income increase of almost $100 a month.
CBO estimates 11% "drag" on the economy from private health insurance
Estimate of health care costs
More on actual costs
Medicare Buy In is a stimulus that has no borrowing costs and no tax increase. There is no excuse for our elected government to be continuing to hand our money over to the leeches in the private insurance sector.