PolitiFact | Comparing administrative costs for private insurance and Medicare

"Private insurance companies in this country spend between 12 and 18 percent on administration costs," Sanders said on NBC’s Meet the Press on Sept. 17. "The cost of administering the Medicare program, a very popular program that works well for our seniors, is 2 percent. We can save approximately $500 billion a year just in administration costs."

Is the gap between private and public health insurance providers’ administrative costs really that high? Most experts agreed the numbers looked about right. But because of key differences between Medicare and private insurance, the trade-off isn’t as simple as Sanders suggests.

If "the numbers looked about right", then why is it "half truth"?

Experts told us we could safely assume private insurance costs, on the other hand, are much higher, though actual spending estimates vary.

Aah... So it's a "half truth" because Bernie understated how much cheaper medicare is than private insurance companies.

Historically, administrative expenses were much higher in the commercial market because insurers did a lot of underwriting, or using the health status of individuals or groups to determine their premiums. The Affordable Care Act was designed to curb that spending.

On top of that, experts explained that unlike Medicare, private insurers take on more responsibility than simply paying claims or occasionally going after fraud. Before a claim is even filed, they check its appropriateness, assess whether it is medically necessary, and whether it can be done in a cheaper way (outpatient versus inpatient care, for example).

"Medicare has been trying in fits and starts to look a little more closely at how it pays claims but generally speaking, it is passive in processing claims," Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University.

And private companies, deny more claims, which makes it more expensive.