Private Insurance Vs. Medicare

Krugman had an interesting piece a few days back that I set aside and forgot about. I stumbled across it a bit ago, and I think it's important enough to highlight:

...since 1970 Medicare costs per beneficiary have risen at an annual rate of 8.8% — but insurance premiums have risen at an annual rate of 9.9%.

I just calculated (1.099/1.088)^40, which should represent a 9.9% annual rise divided by an 8.8 percent annual rise, over a 40 year period; the result is 1.495. In other words, as Krugman points out, if insurance premiums had risen "only" as fast as medicare costs, they'd be a third less than they are. What he doesn't point out is the rising trend of medical insurance companies to find any and every reason to deny claims. So that 50% excess cost doesn't even buy you the same care, but much less care and much more hassle.