Insurance Payments Tied to Medicare Intrigue States, Employers

States and private employers are forging ahead with initiatives to peg insurance payments to Medicare rates. This is despite the recent refusal by most of North Carolina’s hospitals to take part in the state treasurer’s plan to pay them almost double what Medicare pays.

Rate Debate: Employers and insurers say relying on carefully vetted Medicare rates is a reasonable way to start bringing down spiraling costs. But health-care providers say those rates are too low to cover their expenses.

State Testing Grounds: Montana and Oregon are basing the rates they pay hospitals for their state employees’ coverage on Medicare prices, ...