DISQUS

Don Levit · 1 year ago

Louise:
Public and private insurers use different accounting sytems.
Public insurers, such as Medicare, operate on a cash basis, while private insurers operate on an accrual basis.
Liabilities for Medicare do not extend beyond the current year, while private insurers account for liabilites that are expected to occur beyond the current year.
In addition, reserves in Medicare cannot be converted into cash, while reserves in a private insurer can be converted into cash.
At least from an accounting perspective, Medicare has a huge advantage over private insurers.
Don Levit