The best health insurance in America is government health insurance

by Robert I. Field, Ph.D., J.D., M.P.H.

What health insurance plan has the most satisfied customers? Is it run by a company that is large or small, for-profit or nonprofit, local or national?

According to a recent study published in the prestigious journal Health Affairs, the best plan is run by no company at all. The most satisfied patients in the United States are insured by the government. They are elderly beneficiaries under Medicare. (Click here to see the study.)

The study surveyed patients covered by four kinds of plans - employer-provided insurance, private individual policies, Medicare, and Medicaid. The top scoring plan was Medicare by a wide margin.

Among the key findings was that only 8 percent of elderly Medicare patients rated their coverage as merely fair or poor. The figure was 15 percent for Medicaid recipients, 20 percent for those with employer coverage, and 33 percent for those with private individual policies.

The study also asked respondents whether they had ever had a negative experience with their insurance plan. Fewer people reported having had one under Medicare (28 percent) than under any other kind of coverage. Those most likely to have had a run-in with their insurance provider were covered under a private individual policy (56 percent).

Medicare recipients were also about half as likely as those with employer-based insurance to report problems with access to care or with medical bills.

The study also compared the experiences of two kinds of elderly Medicare beneficiaries - those covered directly by the government under traditional Medicare and those who had opted to receive benefits through a private plan under Medicare Advantage. Participants in traditional Medicare rated their coverage as merely fair or poor 6 percent of the time, while the Medicare Advantage participants assigned those ratings 15 percent of the time.

These findings say a lot about proposals to reform Medicare. Some Republicans in Congress, along with presidential candidate Mitt Romney, want to turn it into a voucher program. Under their approach, the government would no longer cover anyone directly. All beneficiaries would receive coverage through a private plan in an arrangement similar to Medicare Advantage.

The study suggests that Medicare recipients would be much less satisfied under such a system than they are today. That has also been the reaction of many current beneficiaries who object strenuously to the voucher idea.

There is a widely believed myth that the government is always clumsier, less efficient, and less customer-friendly than the private sector. In some cases, that is certainly true. But health insurance is clearly not one of them.

The voucher proposal seems to have more to do with a pre-set ideological view of government health insurance than with actual information on how well it performs. When you ask those with the most first-hand experience - Medicare beneficiaries – you find that the government does a pretty good job.