The prices that private health plans pay medical providers are opaque, not only to patients, but also to private purchasers. While the complexity of medical care contributes to the pricing opaqueness, obfuscation also plays a role.
Research by UC Hastings Professor Jaime King, Morgan Muir '12 and Stephanie Alessi '13 of the UCSF/UC Hastings Consortium on Law, Science & Health Policy, showed that when private insurers negotiate payment rates with medical providers, both parties generally agree to keep the key details secret. Employers—and their covered workers and dependents—pay those prices but are not privy to the contract details negotiated on their behalf.
From aggregate data, it is clear that high prices lie at the heart of the health spending problem in the United States, and it is equally clear that private insurers generally pay higher prices than Medicare or Medicaid.
Read more from the Center for Studying Health System Change here.