The $1.1 Billion Bush Complexity Tax
Earlier today a colleague at the Medicare Rights Center forwarded me a remarkable piece of data that left me astounded. We all know having private plans, rather than a benefit directly from Medicare, is needlessly costly and confusing. But few people know that the median time spent by seniors analyzing which plan is best for them is around 8 hours, according to a study (p.76) by the University of Chicago and Georgetown University. This means that signing up for what hopefully is the right plan is literally a 9-5 second job for many seniors and disabled.
What else does this mean? As the famous saying goes, time is money. With the average American wage being around $17 an hour (and assuming it would still take an hour to sign up for a direct benefit from Medicare), the confusing design of Part D is costing the average enrolled senior about $119 in Bush confusion taxes. Assuming at least 9 million seniors signed up for Part D, that means the confusion costs for all American seniors and disabled would be about 72 million hours lost, or about $1.1 billion! And this doesn’t even include the significant time spent by many seniors who analyzed the plans but then decided against enrolling.
Now these are just back of the envelope calculations (rest assured, a more detailed report is in the works), but this often overlooked cost of corruption from Bush’s Part D disaster is truly staggering. Seniors and disabled have long been clamoring for a simple, guaranteed benefit directly from Medicare. Its high time Congress listened and passed legislation to create a standard benefit offered directly by Medicare.
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