Medicaid’s Costs, Like Medicare’s, Have Risen Far More Than the Costs of Private Health Care

Medicaid’s Costs, Like Medicare’s, Have Risen Far More Than the Costs of Private Health Care

As the congressional debate heats up over President Obama’s proposed “public option” and his proposed expansion of Medicaid, the debate largely centers on the question of controlling costs. The president claims that more government control would make health care more affordable. The empirical evidence, however, confirms that more government control would make health care more expensive.

Last month I showed how Medicare’s costs, even without the Medicare prescription drug benefit, have risen 34 percent more since 1970 than the combined costs of all other health care in America apart from Medicare and Medicaid — the vast majority of which is purchased through the private sector.1 In response, some have argued that Medicare’s costs should have been expected to have risen more than other costs because, they asserted, the costs of treating elderly patients, whether through Medicare or not, have risen more than the costs of treating younger patients.

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