Trump’s Health Care Transparency Regulations

Last week, the Trump Administration announced two regulatory changes in an effort to provide price information to patients about the medical services they are undergoing. President Trump has made price transparency a centerpiece of his health care agenda.


Hospital will be required to display their negotiated rates to patients

The first regulatory change, scheduled to become effective in January 2021, will require hospitals to display their secret, negotiated rates to patients starting in January 2021.


Insurance companies will be required to provide insured with their expected out-of-pocket costs

The second regulatory change will require insurance companies to show patients their expected out-of-pocket costs through an online tool. This change is subject to 60 days of public comment. It is unknown at this time when the new regulation would go into effect.


The Trump Administration is fighting hard to transform the health care system through transparency. Making patients aware of the costs of medical services and procedures up front, before the patient undergoes a service or procedure, will avoid surprise bills.


Seema Verma, an Administrator in the Center for Medicare & Medicaid Services, provided a written statement with the announcement. She said, “under the status quo, health care prices are about as clear as mud to patients. Today’s rules usher in a new era that upends the status quo to empower patients and put them first.” Previously, Ms. Verma provided some background on the Trump Administration’s position. “As deductibles rise, patients have the right to know the price of health care services so they can shop around for the best deal.”


Under the Affordable Care Act, hospitals are currently required to post their “list prices” online. The “list price” however is ineffective in providing the patient with guidance on what their specific cost will be. Insurance companies, especially Medicare and Medicaid negotiate their own prices with hospitals different than the “list price” and currently not available to the patient until after the medical service or procedure has been performed.


Under the new rules, hospitals will be required to show patients how much they really pay for medical services and procedures. This regulatory change was prompted by calls from consumer advocates who pushed for transparency as a mechanism to combat rising health care costs. The Executive Order that introduced these new regulations can be accessed here.


Critics of the new regulations argue that patients will be confused by the new changes. People understand the concept of price and know that certain insurers are able to negotiate lower rates because they have more members. People also understand the shock of a medical bill. An informed consumer is a better consumer.

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