Why is my Medicare premium half of the cost of my supplemental coverage?

Following is from a comment posted on Paul Krugman’s Op-Ed page in the NYT on April 15. The article praises the Obama deficit plan and bashes the Ryan plan. Nevertheless, the comment from a reader is quite telling in representing a point of view held by many Americans. It’s reflects a lack of understanding, a delight with government programs you don’t pay for and expectations for more of the same.

I have never had a good experience with any insurance company. They add no value to our health care and most often are the cause of people receiving poor care or no coverage at all. I’ll take basic Medicare any time. Someone from an Insurance Company should be made to testify to congress why my Medicare Premium is $98/month for 80% coverage of costs and the supplemental plan I carry for the other 20% costs twice as much.

Well, insurance companies have nothing to do with people receiving poor care or quality care and neither does Medicare. Your Medicare premium is $98 because it not only reflects less than 25% of the true cost of less than half of the full cost of Medicare (excludes any cost for Part A) plus the premium has been frozen for three years in the absence of a Social Security COLA thereby transferring part of your cost to other people and other generations. For new Medicare beneficiaries the premium is 20% higher and growing.

You Medicare supplemental plan costs twice as much because you are paying for all of it (imagine that). In addition, that plan pays not only the 20% you pay under Part B but also the co-payments and deductibles under Part A of Medicare for which you pay no premiums.

And may I ask, before you retired, did your insurance pay 100% of your expenses? No, you say? Then why do you pay for additional coverage to get 100% coverage under Medicare?