Going to the doctor or getting surgery in the United States—even with health insurance—can feel like stepping into a financial black hole. How much of the bill your health insurer will pay and how much of it will fall to you can be a mystery until after the service has taken place and the bill arrives.
That’s finally going to change. It’ll just take a little longer than planned.
Parts of a final Transparency in Coverage rule issued by the Trump Administration in October 2020 were set to go into effect on January 1, 2022, with a phased implementation through 2024.
But healthcare consumers will have to wait a bit longer for improved price transparency from their insurers.
Earlier this month, the Biden Administration announced it would not enforce certain provisions of the coverage transparency rules, delaying some implementation deadlines by six months and others indefinitely.
The new rule requires most health insurers to provide personalized information about consumers’ out-of-pocket costs for covered services via an online, self-service tool. An initial set of 500 “shoppable services” are supposed to be available to consumers in 2023, with the rest to follow in 2024.
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The explicit goal of making this information available is to encourage consumers to shop around for lower-cost healthcare services and providers, despite studies showing that use of price transparency tools does not necessarily lead to lower healthcare costs overall.
Insurers will also need to publish the underlying negotiated rates paid to healthcare providers, historical information on charges from and payments to out-of-network providers, and negotiated rates and historical prices for covered prescription drugs. This detailed data must be provided in machine-readable form with the goal of enabling data analysis and fostering private-sector innovation to boost consumer shopping behavior.
Health insurance companies will now have until July 1, 2022 to publish these files, according to new guidance issued jointly by the U.S. Departments of Labor, Health and Human Services, and the Treasury.
The Administration will also delay enforcement of certain provisions indefinitely, including the requirement that insurers publish prescription drug costs.
Enforcement of other transparency requirements from the 2021 No Surprises Act will also be delayed. For example, disclosure rules that require insurers to provide consumers with good faith estimates of their expected costs and related details will not be enforced as of January 1, 2022 when they officially go into effect.
If the implementation of hospital price transparency rules is any guide, consumers may not get the cost clarity they need even once the new health insurance requirements are enforced.
The Hospital Price Transparency Final Rule went into effect at the start of 2021, requiring hospitals to publish their negotiated rates with insurers along with discounted cash prices for 300 common services. Like the new rules for health insurers, hospitals must provide online consumer transparency tools and machine-readable files for research and analysis purposes.
But the implementation of hospital transparency rules hasn’t necessarily been smooth. A recent report showed that fewer than 6% of hospitals are complying with new transparency requirements. Most of those hospitals that are out of compliance had failed to post all the required negotiated prices or to publish the full list of discounted cash prices.
Despite the implementation challenges insurers will no doubt face, evidence suggests consumers want price transparency.
According to a survey conducted by HealthSparq earlier this year, 83% of consumers reported wanting to see their out-of-pocket costs before getting healthcare services. Among respondents who had used an insurer-provided price transparency tool, the vast majority reported feeling like they could make more informed healthcare decisions and that they better understand their insurance coverage and benefits.
The stakes of not implementing price transparency may be high.
Without price information, 25% of respondents in the HealthSparq survey reported avoiding healthcare services altogether and a prior survey showed that 53% of consumers said they have avoided healthcare because they weren’t sure what it would cost.