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What is the Healthcare PRICE Transparency Act?

health care price transparency act

As 2020 winds to a close, health insurance pricing are on the national radar again. Questions abound, and it's challenging for consumers to find accurate, trustworthy information online.

Is the Affordable Care Act (ACA) going away for good? Will the cost of brand-name prescription drugs keep rising? Will I lose my doctor?

All of these questions need answering as the U.S. moves forward with a solution to the COVID-19 pandemic still causing gridlock in the healthcare system.

A point of fact: The Healthcare PRICE Transparency Act isn't law yet. Still, medical care providers are already anticipating that it will become law and have filed lawsuits in federal court to prevent or delay its passing.

Here is the most critical information for consumers to know as Congress continues to solidify price transparency rules in the healthcare industry.

What is the Healthcare PRICE Transparency ACT?

The point of passing healthcare price transparency is two-fold:

  • Mandate that medical care providers reveal the prices they've negotiated with insurers
  • Increase patient choice and competition among medical care providers and insurers

The bottom-line fact: the PRICE Transparency Act falls in line with attempts to replace the ACA with a Republican-backed alternative.

The GOP-controlled Senate has yet to pass price transparency as a federal statute, not an executive order at the President's direction.

Who sponsored the Healthcare PRICE Transparency Act?

The PRICE Transparency Act's sponsors include Republican Senators, such as:

  • Chuck Grassley (Iowa)
  • Joni Ernst (Iowa)
  • Mike Enzi (Wyoming)
  • Mike Braun (Indiana)
  • Kelly Loeffler (Georgia)
  • John Kennedy (Louisiana)

No Democrats co-sponsored the bill; it's a partisan bill at this moment.

The reasoning behind the Senate's lack of Democrat support goes beyond the scope of this article, tilting the conversation unnecessarily into the political realm.

This article seeks to state facts plainly without partisan spin or slanted, bombastic messaging.

How did the Healthcare PRICE Transparency Act start to form?

Essentially, the Healthcare PRICE Transparency Act's genesis started with an executive order by Donald Trump on June 24, 2019.

The Trump administration's "Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First" builds upon a previous executive order issued on October 12, 2017.

The 2017 executive order "Promoting Healthcare Choice and Competition Across the United States" mandated creating a report to find ways to increase consumers' choice and competition among healthcare providers and insurers.

Passing The PRICE Transparency Act is the next logical step in codifying healthcare price transparency for all consumers across the country.

If the PRICE Act isn't law, what's the controversy?

Here's a point of fact: Executive orders don't have the same legal standing as Congressionally approved statutes.

Understanding the purpose and scope of executive orders in the U.S. explains why Senators introduced the price transparency bill.

Generally, executive orders mandate that federal government agencies follow the directives of the President.

Thus, the Trump administration's healthcare executive orders only mandated that the United States Department of Health and Human Services (HHS) – through the authority of the Centers for Medicare & Medicaid (CMS) – use the ACA's powers to kick-start healthcare price transparency nation-wide.

The law doesn't yet apply to private insurers or health plans on state and federal exchanges because executive orders don't have that particular authority.

Only Congress can pass laws that regulate the health insurance industry and mandate that providers and insurers put patients first, not high profits and dividend payouts to shareholders.

If it becomes law in 2021 under the Biden administration, hospitals and insurers will no longer be able to surprise patients with exorbitant medical bills after they've received care.

Why does price transparency matter in the first place?

Understanding the intent and effect of price transparency is vital. The general idea is that when consumers know prices ahead of time, they can choose to shop elsewhere.

This principle is the bedrock of capitalism, but in this case, it applies to the healthcare industry's alleged hidden charges.

Currently, patients don't have any means to compare the price of services between providers (e.g., hospitals) and insurers until it's too late.

The theory is that when consumers can see the price of care, they can choose to go elsewhere—this choice, in view, incentivizes healthcare providers to lower the cost of services.

How have the healthcare and health insurance industries reacted?

In particular, hospitals don't like the proposed law because they believe that the effect will raise prices on consumers, not lower them, during a pandemic.

HHS and CMS are significant sources of revenue for critical care facilities. Many patients in need of emergency care don't carry private health plans if they have insurance at all.

As such, Medicare and Medicaid make up the difference. Price transparency, according to the litigants, risks raising costs for privately negotiated reimbursements.

So far, challenges to healthcare price transparency have been unsuccessful.

How to compare prices for healthcare and insurance

Today, comparing health insurance price is a challenging endeavor for those who have never purchased health plans.

But by visiting HealthPlans.com, consumers can use the platform to shop around for the best rates in an online marketplace.

Consumers can easily compare premiums, deductibles, and benefits without reading lengthy, confusing insurance documents.

Visit HealthPlans.com to get started and find the right insurance at an affordable price and must-have benefits.

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