What's to stop congress from passing a blanket "most favored nation" law for VA + medicare on all pricing, inclusive of insurance rates and discounts? Seems like it would be fair and useful.
Maybe the next dem president will write an executive order directing the HHS to drop the enrollment age for Medicare to zero.
The overhead of selling to the government is significantly higher than selling to private companies. So the government simultaneously demands the lowest price while having a much higher cost of sales that needs to be covered by that price. A price that would cover the cost of selling to the government would be non-competitive if selling it to a private company because you may be competing with other companies that don't have to anchor their prices to the cost of doing business with the government.
To work around this companies post a very high list price, no lower than what they charge the government as required by MFN regulations. They then effectively steeply discount those prices when selling to other entities via various mechanisms to more accurately reflect the lower cost of sales. The list price is a fiction required to satisfy "most favored nation" pricing laws, no one is expected to pay it.
tl;dr: In many cases the basic economics requires the government to be charged more than average because they are expensive customers with high overhead. MFN regulations don't make this reality go away so companies have to creatively structure their pricing to satisfy regulations without requiring non-government customers to pay for government overhead.
We're gonna be so rich!
There is a weird thing Americans often do when confronted with the incredibly high price of medicine and medical care in the US of imagining that every other country is actually responsible for this (hence the "most favored" nonsense). That it's zero sum and every other country is laughing and taking Americans for a ride and underpaying, and therefore Americans have to cover the bill.
This is the angle Trump has taken in some of his incredibly ignorant and stupid screeds on this topic (as with every single position he has on anything): Get everyone else to pay more and somehow the US pays less!
This...isn't at all how it works, or what the problem is. Americans pay more because of the whole massive scam of your Medical Insurance Racket, where everything has imaginary inflated prices and an absolutely massive middle-tier of suits having nothing to do with medicine are taking their cut. This is your problem, reflected almost nowhere else on the planet, and it is domestic caused and will need to be fixed domestically. Criticizing Europe or Canada or anyone else will never, ever fix the utterly, insanely broken and profoundly stupid American system.
But it won't. It's simply incredibly how easily Americans can be fooled into voting against their own best interests, year after year.