As of January 1st insurers and health plans are required to provide online tools to help enrollees estimate the cost of common medical services and procedures. As an aside, a future iteration of the law should also discourage medical professionals who work in hospitals or large practices controlled by private equity from only referring inside their systems without giving patients an opportunity to use the tools to shop elsewhere. I’ve never had a problem with doctors steering me to hospital-based services. Yet, I’ve heard horror stories about doctors being compensated or punish based on so-called keepage and leakage. This from Kaiser Health News:
Insurers must make the cost information available for 500 nonemergency services considered “shoppable,” meaning patients generally have time to consider their options. The federal requirement stems from the Transparency in Coverage rule finalized in 2020.
Starting in 2024, the requirement on insurers expands to include all drugs and services.
Hospitals have been required since 2021 to provide price lists but the penalties are so low some have opted not to comply. Insurers, including employer plans, face stiff fines if they fail to provide the tools. Penalties are $100 per day for each person effected.
Many insurers have offered versions of cost-estimator tools before, but small percentages of enrollees actually use them, studies have shown.
It remains to be seen whether patients will begin to use price comparison tools. In the past health plan deductibles were relatively low compared to today. When your deductible is nearly $9,000 you have more incentive to compare prices if you know you can.
“Most patients are not moving en masse to use these tools,” said Dr. Ateev Mehrotra, a professor of health care policy at Harvard Medical School.
There are many reasons, he said, including little financial incentive if they face the same dollar copayment whether they go to a very expensive facility or a less expensive one. A better way to get patients to switch to lower-cost providers, he said, is to create pricing tiers, rewarding patients who seek the most cost-effective providers with lower copayments.
I tend to agree that rewarding patients who patronize lower-cost providers with lower copayments is a good idea. I have often wondered why health insurers don’t do more to assist enrollees with tools to compare prices. Two reasons given to me by benefits brokers are: 1) insurers who manage corporate self-insured plans make money off the difference between what they pay for care and what they charge the employer (called the spread). 2) About half of people covered by private insurance are in self-insured employer pans. The employer is responsible for all claims. The higher the claims, the more the third-party administrator is paid to manage the plan. Now, if you’re into conspiracy theories a good one is hospitals and health insurers have a quiet agreement to loot employers and government