Tornado Alley (PROG)

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Health Expenditure Is Really Really Big (A Clarifying Note)

December 16, 2013, 5:04 pm 31 Comments

OK, for some reason I didn’t see that coming. But when I pointed out .. http://krugman.blogs.nytimes.com/2013/12/16/the-big-money-bets-on-obamacare/ .. that insurers are getting ready to lay out around $500 million to promote policies via the Affordable Care Act — which I see as very good news — a fair number of readers were outraged. Insurers are spending all that money on advertising, when they should be spending it on health care!

Well, yes. And I would, as I said, prefer single-payer — except that if you followed the legislative process at all, you know that Medicare for all wasn’t going to happen in 2010, or probably for decades to come.

But you really do need a sense of the magnitudes here. Outlays by private insurers will be nearly $1 trillion this year .. http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2012.pdf . So Obamacare-related advertising, while big news in terms of getting the word out — and a big signal that insurers think it’s a go — amounts to about 0.05 percent of those insurers’ costs. Don’t get bent of shape!

http://krugman.blogs.nytimes.com/2013/12/16/health-expenditure-is-really-really-big-a-clarifying-note/