I actually work in this industry and adjust claims myself from time to time, so I love talking about this stuff!
> that must follow rules set by Medicare. (emphasis added)
Yeah, I'm not sure that anyone seriously believes that insurance companies should operate in a 100% unregulated fashion. Even the US's food industry (which is predominately privatized) is regulated in some capacity. The argument is whether regulated private insurance can deliver good outcomes. That is very much the case, as evidenced by Switzerland, the Netherlands, and Medicare Advantage.
> Those rules are, IIUC, substantively different than the ones that cover the non-medicare private insurance industry, and as a result I'm not sure what any of the (true) facts that you've quoted really mean in the context of the questions being asked here.
First of all, the non-Medicare private insurance industry is heavily regulated, often more so than Medicare Advantage private insurers. In fact, you raise an important point: it's important to consider which specific regulations are helping and which are hurting. Outside of Medicare Advantage, there are regulations that strictly control insurance company's profit margins, how much of premiums can be spent on collecting medical claims (see: the 80/20 rule and Medical Loss Ratio rules), the fact that every beneficiary must be treated exactly the same (ERISA, parts of ACA), a minimum amount of coverage required (the ACA added this), the employer mandate (ACA), etc.
To give you a sense for some of the unintended consequences that have been created by regulations on non-Medicare Advantage health insurance plans, due to Federal mandates and tax incentives, health insurance is predominately provided by employers rather than the individual market (unlike Switzerland, Germany, or the Netherlands). What we're seeing in healthcare costs is analogous to what you might see happen to airline ticket costs if we all got our air tickets through our employers: the vast majority of us would fly business class, while the unemployed would be simply unable to pay for business class fares out of pocket. A big reason for this is that employers (especially medium-to-large businesses) have a much higher purchasing power (and hence, willingness to pay) than individuals. If you take this behavior and combine it with the fact that health insurers' profit margins are capped by law, insurers pay more absolute dollars for treatments (which doctors happily accept), charge more to employers (who are generally less price conscious vs individuals), thus bring in more absolute revenue, and therefore more profit because a capped profit percentage of a higher revenue is higher than a capped percentage of lower revenue. It's somewhat counter-intuitive, but the policy combination of an employer mandate and insurance profit cap results in increased prices.
This cocktail of regulations does not exist for Medicare Advantage insurers — even though they are still regulated in different ways. That's a very important distinction. Currently, Medicare Advantage insurers are allowed to return 50 percent to 70 percent of any cost savings to beneficiaries in the form of reduced premiums or expanded benefits — whereas with employer-sponsored insurance, even if such cost savings existed, they would accrue to employers (unbeknownst to worker beneficiaries) — and that's assuming there are cost savings for employers; there aren't, due to the aforementioned regulatory concoction. A big part of why Medicare Advantage actually works really well is because it's effectively a basic income for health insurance, it's just that individuals are empowered to use those dollars to buy whichever healthcare plan meets their needs (including a public option), as opposed to being forced to choose among a small selection of plans curated by an employer.
> Also, from reading up about MA, it would seem that MA is operating on the "HMO" (health maintainance organization) model that started to be touted in the 1990s. AFAIK, the HMO model has not done much to contain consts in the broader US private health insurance world. It would be interesting to know if it is specifically the combination of the HMO model and Medicare rules that has allowed MA to apparently work better than OM.
Medicare Advantage plans can both be HMOs as well as PPOs (https://www.medicare.gov/types-of-medicare-health-plans/pref...), it's just that there happen to be many MA plans that are HMOs. HMOs can have very good outcomes with significant cost savings (think of the pre-2010 UK NHS as a public HMO), but can also have bad outcomes if managed poorly (think of the 2022 NHS or US's VA as poorly managed public HMOs). With Medicare Advantage, seniors have the option to choose.