Medicare and Medicaid set their payment rates for medical services above marginal cost, but below average total cost. The rationale for doing this includes the following, except

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Medicare and Medicaid setting their payment rates above marginal cost but below average total cost helps in saving taxpayers money, inducing healthcare providers to serve their patients, and putting downward pressure on healthcare costs. It does not inherently aim to make hospitals and other providers more profitable, as their payment rates are set below the average total cost.

Medicare and Medicaid Set Their Payment Rates for Medical Services