from the Congressional Budget Office
— this post authored by Daria Pelech
Physicians’ services account for a substantial portion of health care spending in the United States. Using 2014 claims data from three major insurers, we analyzed the prices paid for 20 common services and compared those prices with the estimated amounts that Medicare’s fee-for-service (FFS) program would pay for the same services.
We found that average commercial prices were substantially higher than Medicare FFS prices and were up to three times higher out of network than in network. In contrast, average prices paid by those insurers in their Medicare Advantage plans were close to Medicare FFS prices and were similar in and out of network. When measured in relation to Medicare FFS prices, commercial prices varied widely among and within geographic areas, but Medicare Advantage prices varied minimally. Those results suggest that insurers are able to use statutory limits on out-of-network charges in Medicare Advantage to negotiate lower in-network prices in those plans. In contrast, without those limits on out-of-network prices, in-network prices in commercial plans are much higher.
Source
https://www.cbo.gov/publication/53441
