In an effort to advance their health care agenda, the Trump administration has released a new Transparency in Coverage proposed rule (see HHS’s accompanying fact sheet and press release), which if implemented would fall short of its promise to make care more affordable for consumers by injecting more transparency into the actual cost of health care and services. The following is a quick summary of the rule and what it means for consumers.
What is the idea behind the transparency in coverage proposed rule?
Transparency in coverage is one of the provisions of the Affordable Care Act (Section 1311(e)(3) of the ACA and Sections 2715A and 2718 of the Public Health Service Act (enacted by the ACA). If this proposed rule is finalized, insurers would be required to inform patients of their financial responsibility prior to receiving care. The information would include, for instance, the total cost of the service; the amount to be paid by the patient; and the amount to be paid by their insurer. The Trump administration believes this information would help patients shop around, compare prices and get a good deal for a specific service. As a result, patients would make cost-conscious decisions, face fewer out-of-pocket surprises and, as a result, help lower overall health care costs. Noticeably, junk insurance plans (such as short-term limited-duration plans—those that offer bare-bones benefits with consumer protections) would not have to comply with this rule. Want to go deeper? See Katie Keith’s analysis here.
Consumer perspective: Transparency is clearly not a cure-all for what ails the health care system.
To improve patients’ affordability and reduce overall health care costs, much more than transparency is needed.
The proposed transparency in coverage rule seems disconnected from the reality.
First, most patients don’t shop for health care despite having some tools to do so, experts found. The reason is simple—people just don’t know what care they need, and that is why they rely on doctors for medical advice. Even if some patients made a good faith effort to shop around, only 30 to 40 percent of care is shoppable. If the goal is to help patients avoid out-of-pocket surprises, one of the key solutions is to pass comprehensive legislation to ban surprise out-of-network billing, which continues to lag in Congress
Secondly, instead of offering healthcare cost comparison tools to patients, why not find real solutions to curb the monopoly power over pricing held by providers? The past two decades have seen steady hospital-physician integrations and mergers of hospitals. There is little evidence that provider integrations reduce costs. Instead, they enable dominant hospitals and larger physician group practices to leverage their monopoly power to negotiate higher prices for their services.
Last but not least, while taunting the importance of transparency in coverage, the Trump administration promotes short-term-limited duration plans—and lets them off the hook for non-compliance. These junk plans provide inadequate coverage that discriminates based on pre-existing conditions and limits or excludes key benefits. As a result, people enrolled in short-term plans can face huge medical bills if they become sick. Those remaining in the ACA-compliant individual market experience higher premiums because the insurers expect healthy people to leave for the cheaper, inadequate short-term plans.
What we are not thankful for is a fake holiday promise.
Over the past three years, the Trump administration’s actions have harmed patients rather than improved their experience accessing affordable health care. While uplifting one of the ACA provisions (which relies on the legality of the law), the administration cannot hide the fact that their ultimate goal is to tear down the entire law, as they have demonstrated by their support of Texas v. United States, which has expanded coverage for millions of people and protected many from health care discrimination.
Comments on the proposed rule are due in 60 days after it’s publicly published in the Federal Register, which is scheduled on November 27, a day before Thanksgiving.