Publications
Publications
- March 31, 2022
- Health Affairs Forefront
Two Approaches to Capping Health Care Prices
By: Michael E. Chernew, Maximilian J. Pany and Leemore S. Dafny
Abstract
High health care prices for the privately-insured contribute to high premiums, which put downward pressure on wages, and induce employers to reduce benefit generosity and charge employees more for coverage. As the average annual premium for family coverage currently exceeds $22,000, many U.S. states are interested in policies that would lower prices for care. Here, we discuss two strategies to limit health care prices: comprehensive price caps supported by rate review and out-of-network price cap. Both strategies have three key advantages over alternatives such as price-setting: They can preserve a meaningful role for market forces; they minimize disruption to health care markets; and they can be adjusted more easily than other approaches as evidence of their impact emerges.
Keywords
Citation
Chernew, Michael E., Maximilian J. Pany, and Leemore S. Dafny. "Two Approaches to Capping Health Care Prices." Health Affairs Forefront (March 31, 2022).