I am confused why a government run program is able to be sold. Please explain like I am 5 how selling medicare is a thing. Why would a government run program need to be sold? Thanks
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I think the other replies answered why you buy Medicare advantage plans, but not why they were sold in the first place.
Medicare contracts with private insurance companies offering Medicare advantage plans – these private companies are paid a fixed amount each month by Medicare to service your plan, which is supposed to be ran in accordance with traditional medicare guidelines.
Medicare does this because they don’t make money off their plans, unlike private insurance. So they are happy to offload their plans.
Obviously there’s going to be some corners cut somewhere to make purchasing the rights to these plans profitable. One method is by restricting care to in network providers with lower contracted rates than would be paid to non contracted providers. Another is finding as many reasons as possible to deny claims for clerical errors and forced pre-authorization and denials for many services that would normally be covered.
This has gotten them into hot water:
https://www.propublica.org/article/cigna-health-insurance-denials-pxdx-congress-investigation
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