Tying hospital reimbursements to Medicare rates could reduce spending by $352B
A new KFF analysis shines more light on the discrepancy between private insurance reimbursements and Medicare.
By Michael Popke|March 02, 2021 at 09:47 AM
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With a self-funded plan, a company operates their own health plan with the help of a broker and a third party administrator (TPA). Companies take on more risk in the process but can manage this risk by buying stop-loss or excess-loss insurance. Once a company reaches an employee size of over 100, they should start considering going to a self-insured plan to save money and improve cash flow.
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. That’s according to a new analysis by the Kaiser Family Foundation (KFF), a nonprofit organization focused on national health issues.
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