The Medicare Cost Control Myth

Conn Carroll / July 30, 2009

A major talking for public option/single payer proponents is that the government does a better job of controlling health care costs than the private sector. So when Bill Kristol claimed otherwise on the Daily Show, Ezra Klein cited a study from public option/single payer advocate Jacob Hacker purporting to show that between 1997 and 2006, the per enrollee average annual growth  for private health insurance was 7.3%, compared to 4.6% for Medicare.

But as AEI’s Nick Schulz points out, a 2007 CBO report by Perter Orszag found that between 1975 and 2005, the real per capita cost growth in Medicare was 4.6%, compared to 4.1% for all other health care spending.

So did Hacker turn night into day on Medicare’s cost-controlling abilities?

As Heritage fellow Robert Book details, all of Hacker’s factual claims are either false, misleading, or irrelevant to the conclusion drawn:

1. Medicare benefits are not directly comparable to private insurance benefits, and the source for the figures cited [by Hacker], the Centers for Medicare and Medicaid Services (CMS), makes no claim that the quoted figures are for comparable benefits. (more…)