As autumn rolls in and open enrollment season approaches, CHIR is taking a deeper look at research that would turn over a new leaf for healthcare. In this combined issue, we gain insight into key strategies for cost containment and medical debt management.
Can Hospital Rate Setting Help Control US Health Spending?
John Holahan and Michael Simpson. Urban Institute, August 2026. Available here.
Researchers at the Urban Institute used their Health Insurance Policy Simulation Model to estimate cost and coverage effects of hospital rate capping at several levels (60%, 100%, 150% and 200% above Medicare rates) in the nongroup and employer-sponsored insurance (ESI) markets. They used data on 2.7 billion claim lines, over two periods, provided by FAIR Health. Their analysis also reflects recent changes to the Marketplaces enacted in July 2025 under H.R. 1.
The researchers assessed the impact of caps if applied across the board, as well as the effect of four more targeted approaches: (1) exempting rural areas, (2) exempting low income areas, (3) exempting safety net hospitals, and (4) targeting only areas with highly concentrated hospital markets.
What it Finds
- The paper finds that capping hospital rates at twice the Medicare rate in both the nongroup and ESI markets would generate $114.8 billion in overall savings in one year, and over $1 trillion in 10 years. These savings would be felt by the federal government ($15.5 billion), households ($29.9 billion), and employers ($69.8 billion) alike. Alternatively, higher caps or enforcing caps only in the nongroup market resulted in less savings.
- The government savings simulated with targeted caps, while smaller, are still highly significant, reducing the 2028 federal deficit by between $35.9 billion and $40.8 billion compared to $44.7 billion under a universal cap.
- Each targeted alternative produced similar reductions in hospital spending. Without targeted exceptions, rate capping reduces hospital spending for the nonelderly by 10.6%. However, even with exceptions in place, spending would still decrease between 9.9% and 10.6%, with the exemption for hospitals serving low-income populations producing the same reduction achieved under the universal rate cap.
Why it Matters:
Healthcare affordability hinges on finding solutions to curb the accelerating trend of rising hospital prices. Rate setting offers a solution to constrain those prices, decrease commercial insurance costs, and pass those savings onto consumers and employers.
Importantly, the brief acknowledges that rate caps can place significant pressure on hospitals, particularly those serving vulnerable populations. However, this simulation demonstrates that this need not be a reason to reject rate setting in its entirety, but rather supports the idea that a nuanced solution is possible without significantly dampening the cost-saving effects.
How Medical Bills and Debt Impact Americans with Private Insurance
Sara R. Collins, Carson Richards, Avni Gupta, and Shreya Roy. The Commonwealth Fund, September 2026. Available here.
Commonwealth Fund researchers analyzed the nationally representative 2025 Commonwealth Fund Affordability Survey data and conducted focus groups to summarize feedback from privately insured adults aged 19-64 from July to October 2025.
What it Finds
- About one-third of working-age adults with health insurance report having unpaid medical bills or debt. The highest rates were found among women, moderate to low income earners, Black and Hispanic individuals, and those living in southern states. Nearly two-thirds attributed their debt to hospital services. Over one-third attributed it to an ongoing condition.
- Forty-six percent of individuals with medical debt owe at least $2,000. Two-thirds say medical debt is a significant stressor in their lives. Thirty percent reported that they had denied themselves healthcare or basic living necessities.
- Two-thirds of individuals blame insurers for their medical debt, while over half hold the health care system as a whole responsible. Focus group members pointed to affordability issues and predatory practices across insurers, providers, and health care systems.
- Over 90% of individuals surveyed are in favor of policies that establish interest-free payment plans, hospital-provided financial assistance, and the elimination of medical debt from credit reports.
Why it Matters
Medical debt among insured Americans results from a combination of inadequate insurance coverage and high baseline healthcare costs. Policy changes established under H.R. 1 are expected to place further strain on the millions of Americans who struggle to pay their medical bills by raising premiums and increasing uninsurance rates. Given the pressure that unpaid medical bills place on other areas of individuals’ lives, policy solutions that both prevent and alleviate debt are necessary. Further, disproportionate medical debt rates among certain populations point to persistent systemic barriers to healthcare affordability that should be addressed through targeted policymaking.