by Drew Altman
Apr 16, 2015 Wall Street Journal Think Tank
No single fact can settle the long-running debate of whether public or private health insurance is preferable. But by one basic metric, the rate of increase in per capita spending, public insurance has an edge.
The Federal Office of the Actuary in the Centers for Medicare and Medicaid Services has charted the annual rate of increase in spending for Medicare, Medicaid, and private health insurance. As the chart above shows, by cumulative growth in per capita spending, Medicare and Medicaid have generally grown more slowly than private insurance and are projected to continue doing so through 2023. Per capita spending is an especially useful measure for comparing public and private health insurance spending because it shows how much Medicare, Medicaid, and private insurers spend on each person irrespective of the number of people covered.
Advocates of public coverage tend to like its relative simplicity, uniform guaranteed benefits, and lower overhead costs, as well as the ability of large public insurance programs to use their purchasing power to leverage changes in the health-care system. Advocates of private coverage favor the greater choice it can offer consumers and the competition that can foster in the marketplace. For some people, preferences for public or private coverage are largely ideological.