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Medicare and Private Insurance Health Care Prices Diverge Substantially in 2022

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Analysis from Altarum found that, in July 2022, the prices paid for many types of health care from the two major payer types (Medicare and Private Insurance) diverged substantially.

Medicare prices fell by nearly a full percentage point, putting overall Medicare services prices below the levels seen back in January 2021. These declining Medicare prices are due to two major factors: very low or no increases in the statutory reimbursement rates for hospital care and physician services in the calendar year 2022 and the re-institution of the mandated sequestration cuts for Medicare provider payments in April and July of this year.

At the same time Medicare prices are falling, the prices for similar types of care paid by private insurance increased substantially in July, up a full percentage point from the previous month and 5.4% higher than the price levels in January 2021.

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