Health Affairs March 14, 2024
The growing financial burden from high commercial prices for medical services is fueling calls for reform. Private insurers already rely on Medicare’s coding architecture to adjudicate most claims, but they frequently provide large percentage add-ons to appease their affiliated networks. For instance, as documented in a series of recent studies, private insurers pay an average of as much as 231 percent of Medicare’s rates for inpatient hospital stays. Advocates for tighter price regulation see a ready opportunity to lower costs by extending the reach of Medicare’s limits to the private sector.
There is no question that capping commercial prices at an arbitrary percentage of Medicare, such as 150 percent, would lower overall costs, at least initially. Insurance premiums would...
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