Employer-sponsored health plans paid hospitals an average of 254% of Medicare rates in 2022. That’s according to RAND’s Round 5 Hospital Price Transparency Study, published in 2024 and based on claims data from more than 4,000 hospitals in 49 states. In eight states, the average exceeded 300%. The number was 241% just two years earlier.
I run MedEscape, a company that connects Americans with board-certified providers in Mexico, Costa Rica, and Panama for dental, fertility, hair restoration, and aesthetic procedures. I see the downstream effect of that 254% every week: patients who can’t afford care at home and are doing the math on care abroad. This post is about where that math comes from.
The pricing gap is structural, not accidental
RAND’s researchers were specific about what drives the variation. “Very little variation in prices is explained by each hospital’s share of patients covered by Medicare or Medicaid,” the study found. “A larger portion of price variation is explained by hospital market power.” In other words, hospitals charge more where they can, not where the care costs more to deliver.
The states above 300% of Medicare include California, Florida, Georgia, New York, South Carolina, West Virginia, Wisconsin, and Delaware. The states below 200% include Arkansas, Massachusetts, Michigan, Mississippi, and Rhode Island. The gap between the cheapest and most expensive state is enormous, and it has nothing to do with outcomes.
Meanwhile, KFF’s 2026 Employer Health Benefits Survey puts the average annual family premium at $28,303, up 5% from 2025 and 28% higher than 2021. Workers’ contributions to that premium rose 9% in a single year, to $7,471. Wages rose 3.7% over the same period. Employer health cost increases have more than doubled since 2022, rising from 3.7% to 8.8% in 2026, according to Aon’s August 2026 projections.
That’s the environment in which a growing number of Americans are looking abroad.
What the gap looks like in real procedure pricing
The 254% number is an average across all hospital services. But the procedures patients actually fly abroad for sit inside the same inflated system. Here’s what patients pay in the US versus what they’d pay through a screened provider in Mexico, Costa Rica, or Panama.
Dental implants. A single implant (post, abutment, and crown) averages $3,000 to $6,000 in the US, with a national average near $4,500 (multiple 2026 pricing sources). In Mexico, the same procedure runs $750 to $1,800, depending on city and materials. An All-on-4 full-arch restoration costs $15,000 to $35,000 per arch in the US. In Mexico, $6,500 to $12,000. You can compare treatment prices side by side on our site.
Fertility (IVF). A single IVF cycle in the US averages $15,000 to $30,000 all-in, including medications (Carrot Fertility, 2026; CNY Fertility, 2026). In Mexico, a standard cycle runs $4,500 to $8,200. In Costa Rica, $6,000 to $8,500. Donor-egg IVF, which can reach $35,000 to $60,000 in the US, runs $7,300 to $12,500 in Mexico. For patients interested in fertility treatment abroad, the savings often cover flights, lodging, and medication combined.
Hair restoration. A hair transplant in the US ranges from $4,000 to $15,000, with most patients paying $8,000 to $12,000 (Bosley, 2026; PatientFi, 2026). In Mexico, the same FUE procedure runs $2,500 to $4,500 at board-certified clinics.
Aesthetic medicine. A facelift in the US runs $10,000 to $30,000 depending on technique (ASPS, 2026). In Mexico, $4,000 to $9,000. Deep plane facelifts, which can exceed $18,000 in the US, start around $5,000 to $9,000 in Mexico.
These aren’t apples-to-oranges comparisons. Board-certified surgeons in Mexico perform the same procedures with the same materials. The cost difference is driven by the same thing RAND identified: market structure, not clinical quality.
Why market power is the mechanism that matters
The RAND finding about hospital market power is worth sitting with. If quality explained the price variation, you’d expect hospitals that charge 300% of Medicare to have better outcomes than those charging 170%. They don’t. RAND found no such relationship. Oregon has responded by capping hospital prices at 200% of Medicare. The rest of the country hasn’t.
For employers, this means the premium dollars going to hospital systems aren’t buying proportionally better care. They’re buying whatever the local market will bear. And for employees who need a dental implant, an IVF cycle, or a hair transplant, the system offers little relief: these procedures are frequently excluded from coverage altogether, or subject to annual maximums so low they barely cover a consultation.
Run the numbers yourself with the MedEscape savings calculator. For a family spending $7,471 a year on premium contributions alone, the math on a $4,500 dental implant abroad versus a $4,500 implant at home (if you’re lucky enough to be in a low-cost state) or $6,000 in New York becomes a real financial decision.
What self-funded employers should be asking
About 65% of covered workers are in self-funded plans, meaning the employer bears the actual claims cost. Under ERISA, self-funded plans have broad latitude to design benefits. I’ve written before about the ERISA gap and how state mandates for fertility and dental care don’t apply to self-funded plans. That same flexibility means a self-funded employer could, in theory, cover board-certified care abroad at a fraction of the domestic cost.
Almost none do. That’s starting to change, but slowly. The 254% RAND number is the clearest argument for why it should change faster. If employers are already paying 2.5x Medicare for hospital care domestically, the idea that a board-certified provider abroad charging 40% of the US price is somehow risky starts to look like a bias, not a conclusion.
How MedEscape fits into this picture
I started MedEscape because I watched the cost arithmetic push real people out of care they needed. We don’t replace employer health plans. We give patients an option when their plan doesn’t cover what they need, or when the out-of-pocket cost at home makes them delay treatment indefinitely.
Every provider in our network is board-certified. We coordinate the clinical record review, the logistics, and the follow-up. You can see how we screen providers and review our full provider directory before committing to anything.
The 254% number won’t go down on its own. Hospital consolidation is accelerating. Premium growth is outpacing wages. The structural incentive for cross-border care gets stronger every year, not weaker. For the patients who find us, the question isn’t whether care abroad is legitimate. It’s why they waited so long.
If you’re ready to see what care actually costs through a screened provider in Mexico, Costa Rica, or Panama, start here.
Frequently asked questions
Why do employer health plans pay so much more than Medicare for the same hospital services?
Hospital market power is the primary driver. RAND’s 2024 study found that in states where hospitals face less competition, commercial prices can exceed 300% of Medicare. Medicare sets its own reimbursement rates, but private plans negotiate in a market where large hospital systems hold significant leverage. The result: employer plans in states like California, Florida, and New York pay far more for identical services.
Is the 254% figure an average or a ceiling?
It’s a national average. Individual hospitals and states vary widely. Arkansas averaged below 170% of Medicare, while Florida and West Virginia exceeded 335%. Within states, the variation can be just as large. The figure covers both inpatient and outpatient hospital facility services and related professional fees.
Can employer-sponsored plans legally cover care in another country?
Self-funded plans governed by ERISA have broad discretion to design benefits, including covering board-certified providers abroad. State-regulated fully insured plans face more restrictions. Most employer plans don’t currently cover international care, but there’s no federal prohibition against it for self-funded employers.
How do I know a provider abroad is qualified?
Start with board certification in the provider’s home country, then check for international accreditation (JCI is the most recognized standard). MedEscape pre-screens every provider in its network and coordinates the clinical record review before any procedure. You can review our screening process in detail.
Does medical travel make sense only for uninsured patients?
No. Many patients who come to MedEscape have employer-sponsored insurance that either doesn’t cover the procedure they need (common with IVF, dental implants, and hair restoration) or comes with out-of-pocket costs that rival the full price abroad. The 254% markup baked into the US hospital system affects insured patients through higher premiums, higher deductibles, and narrower coverage.