The Rich Get Richer

Dollar FlagA CNNMoney article lists the 25 richest towns, measured by median family incomes and median home prices.  At the top is New Canaan, Connecticut with a median income of $231,138 and a median home value of $1,465,000!  Even the town that ranks at the bottom of the list (# 25), Garden City, New York, with a median income of $147,804 and a median home price of $840,000, is not doing too shabby. 

Besides abundant earnings and real estate wealth, what else do these towns have in common?   Extraordinary Medicare spending.  That's based on an NCPA study by Senior Fellow Andy Rettenmaier.

The study found that Medicare spending per beneficiary varies widely across the nation's 3100-plus counties.   In 2005, average Medicare spending per beneficiary (weighted for the Medicare-enrolled population) was $7,208.  Among the 15 counties in which the 25 richest towns are located:

  • All of them, with the exception of two (Fairfax County, Virginia and Santa Clara, California) spent above the weighted average, per Medicare beneficiary.
  • Half of them are in located in counties that are in the top 10 percent of all U.S. counties in terms of Medicare spending per beneficiary.
  • Only one county (Fairfax County at $6,230 per beneficiary) was in the bottom 50 percent.

The largest spending county in the list of 25 towns is Nassau County, New York (home of Garden City), with Medicare spending per patient of $9,654 which is $2,446 above the average!  Nassau county's Medicare spending per patient is $1,708 above what would be expected based on patient characteristics and the cost of health care inputs.

While Medicare spending is also above average in many low income counties, high Medicare spending in high income areas brings some questions to mind.   Do retirees in high income counties use more Medicare services because they are rich?  Or do the rich locate in areas where Medicare spends a lot of money?

Comments (3)

Trackback URL | Comments RSS Feed

  1. Bruce says:

    Have you noticed that the people who complain the most about tax dollars being wasted on (private) Medicare Advantage plans for seniors are completely silent about excess spending by Medicare — of the type spelled out in this study.

  2. Joe S. says:

    Here is my theory: The same personal charactistics that allow high income people to excel at earning high incomes also allow them to excel in getting benefits out of bureaucratic systems.

    I say it’s my theory. But I probably read in something Dr. Goodman wrote somewhere.

  3. Larry C. says:

    I have a better theory.

    Wealthy people locate where there is a lot of high tech medical care and very little rationing.