Healthcare Price Transparency Is the Shutdown Solution
Senate Democrats are demanding an extension of expanded Affordable Care Act subsidies in return for reopening the government. Reports suggest Republicans will compromise on this issue before the boosted Covid-19-era payments expire at year's end.
Yet more subsidies won't address the underlying healthcare cost crisis. In fact, they risk making it worse by insulating insurers from market discipline.
Since 2000, hospital and health insurance costs have increased by 257% and 342%, respectively, around three times faster than overall inflation. Without addressing these runaway costs, Congress will face pressure to increase subsidies every year.
Taxpayers spend over $100 billion a year on ACA subsidies, yet average exchange premiums have more than doubled since 2014 and are expected to rise another 18% next year. As an added insult, approximately 35% of exchange enrollees filed no medical claims last year — meaning taxpayers are padding insurer profits for nothing in return.
A real solution is the bipartisan Patients Deserve Price Tags Act that introduces systemwide healthcare price transparency, which can actually bend the cost curve and make healthcare affordable through choice and competition. Sunlight, not subsidies.
For too long, hospitals and insurers have blinded consumers to prices, then blindsided them with massive bills weeks or months later. This opacity has driven healthcare spending to nearly 20% of GDP. Over 100 million Americans now carry medical debt, and over 31 million borrowed $74 billion to pay for healthcare last year, even though most had health insurance.
Upfront prices protect patients from outrageous overcharges — like $6,700 blood tests or $139,000 hearing implants — and let them shop for affordable, high-quality care.
Transparency also exposes enormous price variation. According to a new Trilliant Health study, commercial rates for four common procedures vary by an average of 8.5 times. Coronary bypass surgery can cost anywhere from $39,579 to $334,147 under a UnitedHealthcare plan.
Even within the same hospital, prices can swing wildly. At MedStar Washington Hospital Center, colonoscopy charges vary sevenfold depending on insurance coverage.
The Patients Deserve Price Tags Act, recently introduced by Sens. Roger Marshall (R-KS) and John Hickenlooper (D-CO), codifies, strengthens, and expands existing federal hospital and health insurance price transparency rules throughout the healthcare system. Publication of all negotiated and discounted cash rates can create competition that puts downward and convergent pressure on prices and reverses runway premium costs.
The legislation also requires insurance carriers, third party administrators, and pharmacy benefit managers to finally turn over health claims data to employer group health plans. Group health plans use this information to design rational medical networks, ensure billing and payment integrity, and avoid overbilling.
According to an investigative report by the New York Times, employers often unknowingly pay insurers far more in claims expenses than providers receive for delivering care.
Forty leading economists recently endorsed the bill, noting it could cut America's $5 trillion in annual healthcare costs by roughly $1 trillion — freeing up funds for families, businesses, and growth.
The choice before Congress is clear. Lawmakers can continue to use taxpayer funds to perpetuate the healthcare cost crisis, or they can fix the broken market and substantially reduce costs through meaningful transparency. Passage of the Patients Deserve Price Tags Act should be part of the broader legislative compromise that reopens the government.
Marilyn Bartlett, CPA, CMA, CFM, CGMA, is the former administrator of the State of Montana Employee Health Plan. Chris Deacon is the founder of Versan Consulting and author of “The Great American Healthcare Heist: Why We're Paying More and Getting Less
