Medicare plans versus private insurance

Medicare plans and Medicare supplement plans for 2019 and can be found at widely accepted and trusted insurance plans because these are social insurance programs. There are private insurances too which provide the same benefits. So which is better, Medicare plans or private insurance?

  • Social program:

Medicare and Medicare supplement plans are more like social programs and provide benefits to the entirety of population In case of retirement or disability or unemployment. These insurance benefits are financed through taxes charged. Hence, it just simply helps to flow the resources from one end to another. It helps to provide assistance to citizens in their old age and disabilities with health and financial security and helps to overcome the huge financial burden. Private insurers cannot afford to provide assistance to everyone. They have to look for the risk management and guarantee that the costs of carrying insurances do not exceed the benefits received or the premiums.

  • Transparency:

Medicare is a social program and is standardized, the policies benefits, coverage and premium rates are well known and all the subscribers have the same benefits and premium rates. In private insurances, the policies are tailored according to the customers and different customers might get different benefits for the same premium. This might lead to less service coverage and more cost for the same. Private insurers also have fewer disclosure agreements which lead to the difficulty in calculating the exact cost related to the benefits.

  • Cost due to obligation:

It is legally required by Medicare to provide service to the old and disabled and hence it cannot cut down on benefits to lower costs. Moreover, it is also legally required by the Medicare and Medicare supplement plan service providers to pay for services and items that can be deemed necessary for the treatment of a disease or illness or improvement of any body part. It is also extremely difficult to reduce benefits as it will have to go through a legislative process which can be tiresome. However, even if the Medicare policies cannot cut down on benefits, it has achieved economies of scale and the costs are much lower than private insurance which has surged much higher.

  • Promotion of protected Medicare:

Since Medicare is such a huge policy with Medicare supplements plans and different other plans, it has the ability to promote set ways of doing business. Medicare is prevalent in all states and has a significant influence on the insurance business carrying out. For example, Medicare promoted the payments through Dg’s which has prevented insurance providers from setting excessive prices and the Patient Protection and Affordable Act has helped Medicare to spread containment of cost throughout the industry.