Providers Paid Substantially Less By Marketplace Nongroup Insurers Than By Employer Small-Group Plans, 2021

Numerous studies show that employer plans pay providers significantly more than Medicare, but less is known about prices in nongroup plans sold both on and off the Marketplaces established by the Affordable Care Act (ACA), where narrow networks and low-cost insurers are more prevalent. We estimated...

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Bibliographic Details
Published in:Health affairs (Millwood, Va.) Vol. 43; no. 12; pp. 1672 - 1679U
Main Authors: Hanson, Caroline, McCarthy, Ian, Molloy, Eamon, Stockley, Karen
Format: Journal Article
Language:English
Published: United States The People to People Health Foundation, Inc., Project HOPE 01.12.2024
Subjects:
Affordability
Aggregate data
Datasets
Drug use
Employers
Enrollments
Estimates
Government programs
Groups
Health Benefit Plans, Employee - economics
Health Benefit Plans, Employee - statistics & numerical data
Health Insurance Exchanges - economics
Hospitals
Humans
Inpatient care
Insurance Carriers - economics
Insurance coverage
Insurance, Health - economics
Market segments
Markets
Medicaid
Medicare
Medicare - economics
Outpatient services
Patient Protection & Affordable Care Act 2010-US
Patient Protection and Affordable Care Act
Prices
Risk adjustment
Segments
Subsidies
Substance use disorder
United States
United States
ISSN:0278-2715, 2694-233X, 2694-233X, 1544-5208
Online Access:Get full text
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Summary:Numerous studies show that employer plans pay providers significantly more than Medicare, but less is known about prices in nongroup plans sold both on and off the Marketplaces established by the Affordable Care Act (ACA), where narrow networks and low-cost insurers are more prevalent. We estimated prices for three market segments (Marketplace nongroup, off-Marketplace nongroup, and employer small group) and three types of services (professional, outpatient hospital, and inpatient hospital) relative to a Medicare benchmark. We used 2021 claims data covering virtually all enrollment in ACA risk-adjusted plans. In aggregate, in 2021, Marketplace prices were 152 percent of Medicare prices, whereas the prices paid in small-group employer plans were 179 percent of Medicare prices. Comparing across market segments, relative to employer small-group plans, Marketplace professional prices were 6.9 percent lower, inpatient prices were 13.3 percent lower, and outpatient prices were 26.3 percent lower. Off-Marketplace prices fell between Marketplace and employer small-group prices. The finding that nongroup prices were significantly lower than prices paid by employer small-group plans-more so than indicated by prior research-is important for understanding federal subsidies and affordability for nongroup coverage and evaluating policies such as a nongroup public option with prices capped at a percentage of Medicare prices.
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ISSN:0278-2715
2694-233X
2694-233X
1544-5208
DOI:10.1377/hlthaff.2024.00913