Medicare’s Hidden Administrative Costs: A Comparison of Medicare and the Private Sector

January 10, 2006 Medicare's Hidden Administrative Costs: A Comparison of Medicare and the Private Sector One of the most common, and least challenged, assertions in the debate over U.S. health care policy is that Medicare administrative costs are about 2 percent of claims costs, while private insurance companies? administrative costs are in the 20 to 25 percent range. It is very difficult to do a real apples-to-apples comparison of Medicare's true costs with those of the insurance industry. The primary problem is that private sector insurers must track and divulge their administrative costs, while most . . .