[refurb]

Because it's worked pretty well for Medicare and Medicaid? Large portions of both were privatized through Medicare Advantage and Managed Medicaid. The gov't pays private companies a flat rate per patient who selects their plan.

A majority of Medicare coverage is provided through private companies (100% for the drug benefit). Last I saw 80%+ of Medicaid patients are covered by a private plan.

What are the benfits? The private companies take on the risk. If the lump sum the gov't gives them isn't enough to cover costs, tough, the company takes a loss. Gov't loves it as it makes budgeting easy.

The other benefit is choice. A patient can select from a multitude of plans that benefit them the most. Want a top doctor? Pick a plan where his/her hospital is in network. Have a chronic disease where you take a lot of meds chronically? Pick a plan with better drug benefits.

Medicare Part D - the drug benefit created in 2005 that is entirely private - came in dramatically under cost forecasts.

[chimeracoder]

> Because it's worked pretty well for Medicare and Medicaid? Large portions of both were privatized through Medicare Advantage and Managed Medicaid. The gov't pays private companies a flat rate per patient who selects their plan.

Yeah, Original Medicare is pretty awful - I wouldn't recommend it to anyone who's able to get a Medicare Advantage plan. It's not just the cost-of-care and the overall expense to the patient (even though Medicare Advantage tends to win out on both of those aspects as well). It's that Original Medicare is a horribly frustrating experience for the patient as well.

Of course, most people (especially most people under the age of 65) don't understand the difference, and when they think about Medicare, they think of a publicly-run program, even though around 40% of the Medicare population is on a Medicare Advantage plan.