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Trump administration begins sweeping layoffs with probationary workers, warns of larger cuts to come; NYC music school teachers strike after union negotiations break down; Ohio advocates push for inclusive policies during Black History Month; Health experts recommend sunshine, socializing to cure 'winter blues.'

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Federal workers tasked with securing elections from foreign interference are placed on leave, parents' organizations reject dismantling Dept. of Education, and the Congressional Black Caucus presses discussions on slavery reparations.

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Rural America struggles with opioids and homelessness in unexpected ways, Colorado's Lariat Ditch could help spur local recreation, and book deliveries revive rural communities hit by Hurricane Helene.

Colorado hospitals charge commercial insurers up to six times Medicare rates

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Wednesday, July 24, 2024   

The rates Medicare pays hospitals are carefully calculated to cover the actual cost of care in an efficient health care facility. But Anthem, Cigna, United and other commercial health insurers in Colorado are paying significantly more than Medicare, according to a new Center for Improving Value in Health Care report.

KristIn Paulson, president and CEO of the Center for Improving Value in Health Care, said it would make sense for hospitals to charge commercial insurers a little more than Medicare, to help expand services and shore up hospital bottom lines

"But the data that we've just released demonstrates that hospitals are getting four, five, or sometimes even six times what Medicare pays. And that's well beyond what we'd expect simply to strengthen a business' bottom line or expand care," she explained.

Using a new health care payment comparison tool, the Center found that while commercial insurers are paying more, overall payments compared to Medicare dropped by 4% between 2019 and 2022 across all facility types statewide. Paulson noted programs -- including the new Colorado Option plans, which are held to a percentage of Medicare rates -- can help keep costs down.

Commercial plans operating through 'ConnectForHealthCO.com' must spend 80% of consumer premium dollars on patient care, only 20% can go to administration costs and profits. But there are no incentives to challenge high prices. Paulson noted if insurers collect $1 million in premiums, they can only take in $200,000 in profits. If costs double, insurers can increase premiums, and profits.

"If they are covering the same people for the same services, they would have to charge $2 million in premiums, and they would be able to keep up to $400,000," she continued. "So, the payers make money when prices go up as well."

Paulson said Coloradans can do their part to lower health costs by using the Center's Shop for Care tool at 'civhc.org/shop-for-care,' which compares procedure prices at different facilities.

"The more we're paying for health care out of our own pocket, and through our health insurance companies, the more premiums will continue to rise. So as consumers, we need to be aware that these prices differences exist, and we need to look for opportunities to get lower-cost high-quality care," she said.

Disclosure: Center for Improving Value in HealthCare contributes to our fund for reporting on Consumer Issues, Health Issues. If you would like to help support news in the public interest, click here.


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