Why not try "Medicare for all"? Glad you asked

However, there remains an undeniable fact: Medicare pays significantly less than private insurers. And this can’t simply be explained by the fact that Medicare covers a huge number of people, because so do Aetna and Humana and Anthem and Blue Cross.

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There’s some evidence that Medicare reimbursements don’t quite cover the average cost of having a patient in the hospital. The hospital’s fixed costs are mostly getting covered by higher reimbursements from private payers. (Though this varies by hospital, and is difficult to tease out, and therefore disputed.)

Note that this isn’t necessarily somehow “cheating.” There are plenty of people flying around the country whose fares don’t cover the average cost of their flight. It still makes good economic sense to sell them tickets at low fares, because the airlines are getting more revenue from a cheap ticket than from an empty seat. Ditto hospitals deciding whether to have empty beds.

In businesses like this, people often look at the prices paid by marginal-cost consumers, and conclude it would be great if everyone got that price. But someone has to cover those fixed costs, or the seller goes bankrupt.

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