In an earlier post Wonks Anonymous reported that California's major health insurer, Anthem Blue Shield raised its individual policy rates by almost 40%. The full story by Victoria Colliver is worth the read. Today, benumbed and befogged by an attempt to make sense of Mexican Development, Wonks Anonymous decided to take a small break and figure out just how the new rates would compare with costs for Medicare.

In a previous post Wonks Anonymous suggested that we might allow people over fifty to buy in to Medicare at an actuarially fair rate as determined by the Medicare trustees. He noted that in 2008 Medicare cost $862 per beneficiary per month. That being for covering a population of older and disabled people.

Just checking the article again he found:

"There aren't any other parts of our society where people have no regard for inflation rate and increase their prices this much. I can't imagine anything in the world that's going up 39 percent," said Josh Libresco, 54, of San Rafael, as he grappled with the news that his family premium will go from $858 per month to $1,192 - and that's with a $5,000 deductible.

This for a 54 year old with family members who are probably younger and less expensive to insure. This with a deductible that comes close to average annual family medical expenditures.

It seems that we are approaching a situation where Medicare will not need to do any estimates for younger consumers. Just charge its average rates. Yes, Professor Krugman, adverse selection is a problem. Monopoly and an inefficient private sector are also causing these rate increases.