Can you give me some more info on this? My understanding is that medicare does less administrative work, and that might have some other consequences like they always pay out or never negotiate down, but how is it subsidized?
Bear in mind the opposite is definitely true as well: older patients are way more expensive than young ones, so their actually healthcare spending per patient has to be higher.
When I say subsidized, I mean informally. Commercial insurance pays much more than the cost of procedures and that makes up for the fact that Medicare sometimes pays less than the cost of the procedure.
In other words, if you were a doctor and you only took Medicare patients, there is a chance that you'd actually be losing money year over year. Of course, it depends on exactly what the doctor is doing as Medicare is more generous with some procedures than others.
Bear in mind the opposite is definitely true as well: older patients are way more expensive than young ones, so their actually healthcare spending per patient has to be higher.