Last week I was at a dinner of healthcare provider and naturally the discussion turned to Obamacare. One physician stated that Medicare administrative cost was only 3% compared to substantially higher numbers for private insurance plans. This figure shocked me because it seems unbelievably low. And as it turns out, it should not be believed. As it turns out, this percentage is based on administrative cost as a percentage of medical payment.
However, there are other ways to crunch these numbers, and one such way is how much medicare spends to administer the cost of managing each person's healthcare payment. Robert Book at the Heritage Foundation have done just that.