The cost to buy in needs to be sharply higher than most of the current recipients paid to get in, as the underlying economics only make sense if the payers and payer overall revenue continues to grow at a high rate.  The math is, quite literally, a pyramid scheme, and it worked great for the Greatest Generation with relatively few years of benefit and lots of their kids paying, and not so well now with lots of years of benefits, expanded services, and a lower payer to payee ratio.  And I don’t fault anyone for taking that handout of a deal, it’s a big winner if you are the recipient.

The preferential rates exist because government has a stick to offer, which is a large bloc of medical service consumers that can be made to go to a different provider, and a carrot, which is to tilt the playing field of the rest of the entire medical industry via regulation.