The House Just Passed a Long-Needed Health Care Price Transparency Measure

When I was pregnant with my second child, in the years following the passage of the Affordable Care Act, I went to the doctor for routine prenatal testing. Despite promises to the contrary, I had lost several health insurance plans during those years, and at least one while pregnant. At the doctor that day, my new deductible was so high that I paid full freight up-front for all my care.

The practice offered me two tests — one a new-fangled version of the old test. When I noticed two tests listed, I told them I’d like to choose one and asked which was more cost-effective. The facility couldn’t even tell me.

On a different trip to the pediatrician, I asked for an estimate of the price. I was quoted about $250, but when I checked out, was presented with a bill almost three times that.

I’m not the only one. Consider Dani Yuengling, who was quoted an estimate of $1,200 to $3,000 for a biopsy that ended up costing $18,000. 

No matter what kind of insurance you have, you’ve probably run into this confusion. In ObamaCare exchanges, employer-based insurance, and government-run programs, figuring out even an approximate price for medical services can be a puzzle. In most of our system, cost is borne by a third payer, so customers and providers alike are disconnected from the actual price of services. As a result, even the same exact procedure can cost wildly different amounts, depending on something as simple as which building you visit to get it done.

A new bill overwhelmingly passed by the House this week (the vote was 320-71) aims to fix some of these problems. Dubbed the Lower Costs, More Transparency Act, the package had bipartisan backing and went through three different House committees. It aims to make changes to our complex health care system to make pricing clearer and site-neutral. 

“We’ve heard countless stories about real patients who were victims of an opaque system and were on the hook for staggering amounts of money,” said Rep. Cathy McMorris Rodgers (R-Wash.), speaking in support of the bill and touting a Congressional Budget Office score that showed more than $700 million in savings. “We will be delivering on results people are counting on.”

Polling suggests that Americans of all stripes might be more comfortable with modest changes like this to their health care plans than the sweeping plans they’ve been sold in the past. Gallup polling shows Americans worry about costs and quality of care, but are more satisfied with their own coverage.

The last time an overhaul of the health care system took centerstage — when the then-candidate Joe Biden and Sen. Bernie Sanders (I-Vt.) wings of the Democratic Party sparred over “Medicare for All” in 2019 — one expert wondered whether “the amount of change being proposed could be scaring people.”

Unlike big changes, which split along partisan lines and make people who like their plans nervous, something like making prices more transparent polls at more than 80 percent, regardless of party or demographic. It brings both liberal and conservative advocacy groups together. Americans see prices everywhere they shop except in health care, and it makes sense to them that there should be a clear price for blood draws and X-rays, too. 

As rapper-turned-advocate Fat Joe said this spring in a push for transparency: “This is not a rocket science thing! Show us the prices! So we can know whether we wanna go to this hospital or we wanna go to the other hospital.”

This is not the first time the federal government has attempted to make medical services more transparent. A regulation passed four years ago and enacted in 2021 required hospitals to provide customer-friendly price lists for 300 nonemergency services. A Centers for Medicare and Medicaid Services study in 2022 showed that compliance was slow in the first year of the regulation. Other independent surveys suggest that only a quarter of hospitals are truly following the rules.

These lists are required to include information that is usually withheld from consumers — prices negotiated with different insurance companies, discounted cash prices, and the highest and lowest prices hospitals have charged for a service. The Lower Costs, More Transparency Act would give teeth to this regulation, making compliance efforts and penalties more effective.

The bill would also aim to adjust a regulation so that Medicare pays the same amount for the same drugs and services, regardless of the facility in which they’re administered. Right now, Medicare pays hospital-owned facilities two and three times as much for the same services performed in an independent doctor’s office or facility. The current structure incentivizes smaller physician practices to be acquired and subsumed by hospitals, leading to hospital consolidation, which makes patients wary and prices higher.

The backstory of lobbying and fee schedules isn’t one that reaches regular folks, but the effects of this disparity do. Estimates suggest getting rid of this quirk would save Medicare patients some $94 billion in premiums and cost-sharing over the next 10 years. 

The health care debate has for too long been defined by utopian dreams and giant plans, many of which fall short for Americans. Maybe it’s time to start favoring the simple over the sweeping. In the words of Fat Joe, it’s not rocket science.

Mary Katharine Ham is a mother, author and writer based in Virginia.

Reprinted with Permission from The Hill – By Mary Katharine Ham