Limiting Private Insurance Reimbursement to Medicare Rates Would Reduce Health Spending by About $350 Billion in 2021

(By Karyn Schwartz, Jeannie Fuglesten Biniek, Matthew Rae Follow, Tricia Neuman, and Larry Levitt For Kaiser Family Foundation published March 1, 2021)

The cost of health care is becoming less affordable for both privately insured individuals and employers who offer health insurance coverage. Long-standing concerns about high and rising health care costs in the United States have been recently exacerbated by the COVID-19 pandemic, which has increased financial pressure on many employers and individuals and led to record unemployment, furloughs and reduced wages.1 A large body of research has documented that private insurers pay higher prices than Medicare and that this gap is growing. Health care spending in the United States is nearly double the average amount spent by other high-income countries on a per-person basis without clear evidence that the overall quality of care is proportionately higher in the United States. This disparity is driven largely by higher health care prices across the United States. Reducing the prices private insurers pay for health care services could help alleviate the financial burden of health care for employers and individuals with private insurance. However, doing so would reduce revenue for hospitals and other health care providers, with uncertain effects on patient care.  Continue to read the brief here…

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