Medicare's admin cost is around 5%, private insurance is around 33% of claim dollars. There are around 27-28% uninsured. The money is already there who pays needs to be moved to the Billionaire and Multimillionaire class to reduce the annual costs for those who work for a living.
> private insurance is around 33% of claim dollars.
The Medical Loss Ratio (MLR) requirement established by the Affordable Care Act (ACA) is 20%.
Typically it's closer to 15%.
As these are private companies, some percentage of that is obviously profit.
It doesn't cost that much more to run private insurance than Medicare.
The problem is the incentive of insurance to drive up cost to get a larger fixed cut, and the lack of a public option (which would require private insurance to actually be worth it).
Those figures are in the right range, and the full picture is larger. The CMS NHE 2023 data puts total US healthcare administration at roughly $1.1-1.7T annually (depending on methodology), building on Woolhandler and Himmelstein's 2020 Annals paper ($812B in 2017 dollars). The per-capita comparison against 10 OECD peers: US $4,983 vs. a peer average of $884. That 5.6x gap is the number Issue #5 of this series will examine in detail, covering three separate computation methodologies and why the estimates range so widely. All source code will be in the repo: https://github.com/rexrodeo/american-healthcare-conundrum
The policy lever that addresses this is billing standardization, not just insurer reform. Countries like Germany and Switzerland run much lower admin under private insurance through standardized claims formats and all-payer rate setting.
