New Trump policy will force insurers to disclose prices up front

Health insurers will be required to publicly post, in advance, the price for the most common services and procedures, under a rule finalized by the Trump administration on Thursday.

The final rule is an effort to inject transparency into the opaque health care sector, and comes less than a week before the culmination of a campaign in which President Trump has been hammered on health care by Democratic nominee Joe Biden for his efforts to overturn ObamaCare and his handling of the coronavirus pandemic.

Patients will eventually have access to new information about cost, including an estimate of their cost-sharing liability, through an internet-based, self-service tool. Currently, this is information that patients typically receive only after they get those services, through an explanation of benefits form.

The Department of Health and Human Services (HHS) said the goal is to bring greater competition to the private health care industry.

“We want every American to be able to work with their doctor to decide on the healthcare that makes sense for them, and those conversations can’t take place in a shadowy system where prices are hidden,” HHS Secretary Alex Azar said.

Azar said “entrenched special interests in the health care system” have long refused to give patients access to the pricing information consumers expect in every other market. When they do have access, he said, prices drop.

But the new policy will be phased in over the next four years, so nothing will happen immediately. 

Beginning in 2022, insurers will be required to make available data files on the costs of various procedures, to better allow for research studies, and to help developers design tools to let patients compare costs across insurance plans. 

The requirement will take effect for 500 of the “most shoppable” services beginning in 2023, and then for all services starting in 2024.

HHS said consumers will be “empowered” to shop and compare costs between specific providers, but they will have to balance the information about cost with quality.

The plan faces major headwinds from the insurance industry, which has argued the policy will undermine competitive negotiations and actually push health care prices higher, once doctors find out they are being paid less than competitors. 

The industry also argued that insurers would be forced to share both their trade secrets and their enrollees’ sensitive, personally identifiable information with third-party app developers.

A similar rule requiring hospitals and insurers to disclose the prices for some of the most common procedures is tied up in court. The Trump administration over the summer won an initial ruling, but the American Hospital Association said it would appeal.