Study Finds Big Gap Between Commercial, Medicare Advantage Rates for Hospital Care

Commercial health plans pay two to three times higher rates than Medicare Advantage plans for the same services delivered in the same hospital, even when those rates are negotiated by the same insurer, according to a recent study published in Health Affairs.

The researchers studied 2022 price information disclosed by almost 2,500 hospitals and 118 insurers. The results showed that on average, commercial prices were between $660 and $707 more expensive than MA prices. The largest price differences were seen in the “surgery and medicine” category, where the median commercial price for services was $1,702, while the MA median price was $928.

The commercial-to-MA price ratio varied significantly across states, with many of the most populous states seeing higher ratios. The ratio was the highest in the Southeast and lowest in the Pacific Northwest and Midwest.