Medicare pays only some 40% of the actual costs of medical care

Another Unelected Obama ‘Committee’ to Control Healthcare Costs

By Warner Todd Huston
Thursday, July 30, 2009

Franklin Roosevelt thought controlling prices of things would right the depressed economy. Today, more economists every day are admitting that his efforts caused The Great Depression to last at least five years longer than it needed to. In the 70s Richard Nixon thought that his program of price controls would save the economy. Instead, it wrecked it further. And now, in 2009, as the Obama administration contemplates a massive government takeover of the nation’s healthcare system — nearly 20% of our national economy — at the top of the list of things to do is to set up effective price controls on services.

In fact, Medicare already does this and it has been the sort of mandates and government meddling that has helped lead to the downfall of our medical system as it is. Right now, Medicare pays only some 40% of the actual costs of medical care forcing one of several situations. Doctors that end up not getting paid, patients on the hook for what is left, or hospitals that never get reimbursed for services causing them to try and charge higher prices to everyone else to make up the difference. And, of course, the low reimbursement rates that Medicare pays out has an effect on the high cost of insurance, as well.

But what will come once Obamacare is passed will far exceed the mess that the price fixing via Medicare has wrought. Worse, there will be no effective way for the people to have a say in what sort of prices that government forces on the industry because Obama plans to create another one of his ubiquitous “committeesâ€