The Free Press, Mankato, MN

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November 22, 2013

Medicare overhead understated at 3 percent

I just have to respond to the letter regarding Medicare vs private insurance overhead.

The statement that Medicare has only 3 percent overhead is simply not correct. The writer is not taking all Medicare costs into consideration.

Much of Medicare overhead is hidden and not reported. For example: Items such as “parts of salaries for legislators, staff and others working on Medicare, building costs, marketing costs, collection of premiums and taxes by the IRS, accounting including auditing and fraud issues, etc.” are not included in the 3 percent overhead they advertise.

Medicare fraud alone accounts for $60 billion to $90 billion per year. That is enough to provide insurance for all the uninsured individuals in the U.S. for one year, according to a CBS News report.

Medicare administrative costs are around $30 billion, according to the Journal of Health Politics.

Add in fraud the total becomes $90 to $120 billion. This makes real Medicare overhead about 25 percent.

We don't need Obamacare, just clean up the fraud and provide the uninsured with private insurance.

Gary Lindsay

North Mankato

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