Study Shows Employers Could Be Paying 4 Times As Much As Medicare

A pilot study by the RAND Corporation says Indiana employers are paying more than four times as much for medical care at some hospitals than those on Medicare.

The study focuses on how much employers are paying for health care plans versus how much the same services would cost using Medicare.

It shows hospital prices in Indiana are increasing and officials from RAND say a lack of price transparency makes it difficult for employers to negotiate better health care plans.

Even though the audience for the study is employers, senior policy researcher Chapin White says the high prices can to trickle down to individual employees.

“If employers are paying more for hospital care through their health plan that’s going to take away from either the employer’s profitability or from wages or other benefits that employers could be offering, like retirement,” White says.

The study shows hospitals are charging between two and four times as much as Medicare. Parkview Whitley Hospital in Columbia City and Parkview Huntington Hospital in Huntington charge some of the highest rates.

White says the results from the study should act as a wake up call for Hoosiers.

“Indiana looks unusual in that hospital prices in Indiana really seem to be higher than the national average,” White says.

RAND hopes to expand the study to other states to have a better comparison of where Indiana stands on a national level.