From 2006 to 2015, insurance providers kept $9.1 billion more in taxpayer funds than they would have if their estimated cost forecasts for drug spending through Medicare had been more accurate. This eye-popping statistic comes courtesy of an in-depth report published Jan. 4 by the Wall-Street Journal.
Each year, insurance companies estimate how much will be spent on providing prescription-drug benefits to Medicare patients. The estimates have been so inaccurate over the years, however, that it has resulted in the providers pocketing billions paid by taxpayers toward Medicare. The payments, according to the report’s authors, are a prime example of “how the secrecy of the $3.5 trillion U.S. healthcare system promotes and obscures higher spending.”
Also, according to an analysis done by a team from Memorial Sloan Kettering Cancer Center as part of the Wall-Street Journal’s research, “if those big insurers were aiming to submit accurate bids, the probability that they would have overestimated costs so frequently and by such a large amount is less than one in one million.”
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