Analysis: Spending on Health Care Would Drop by an Estimated $352 Billion in 2021 if Private Insurance Used Medicare Rates to Reimburse Hospitals and Other Health Care Providers

Findings Illustrate the Potential Magnitude of Savings from Policies to Rein in Health Care Prices

Total health care spending for people with private health insurance would be an estimated $352 billion lower in 2021 if private insurers used Medicare rates to pay hospitals and other health care providers, rather than the substantially higher rates they currently pay, a new KFF analysis finds.

That would represent a 41 percent decrease from the $859 billion in projected health care spending for people with private insurance this year. The resulting savings would be spread among employers ($194 billion) and employees ($116 billion), and the non-group market ($42 billion), assuming proportional savings throughout the private insurance market.

Among other key findings:

• Nearly...

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