New Federal Rule Gives Consumers Greater Transparency in Health Care Costs

The Department of Health and Human Services, Department of Labor and Department of the Treasury has issued a final rule on price transparency that will require most private health plans, including group health plans and individual health insurance market plans, to disclose pricing and cost-sharing information to consumers. This new measure will enable more than 200 million Americans to shop and compare costs between specific providers before receiving care.

Starting on Jan. 1, 2023, the Transparency in Coverage rule will require health plans to offer an online shopping tool allowing consumers to see the negotiated rate between their provider and their plan, as well as a personalized estimate of their out-of-pocket cost for 500 of the most “shoppable” items and services. Then, starting on Jan.1, 2024, these shopping tools will be required to show the costs for the remaining procedures, drugs, durable medical equipment and any other item or service consumers may need.

In addition, the rule will require insurance plans and issuers to make publicly available a standardized, regularly updated data file that creates an open opportunity for research, innovation and comparison within the health care market. The requirement for the publicly available data files will take effect for plan or policy years beginning on or after Jan. 1, 2022.

Finally, the rule will allow insurance issuers offering plans that incentivize consumers to shop for services from lower-cost, higher-value providers to take credit for “shared savings” payments in their medical loss ratio (MLR) calculations. This change is expected to preserve the value that consumers receive for coverage under the MLR program, while encouraging issuers to offer value-based plan designs that support competition and consumer engagement in the health care market.

For more information regarding the Transparency in Coverage final rule, please view the following documents posted by the Centers for Medicare & Medicaid Services:

Pacific Federal is a Zenith American Solutions company and subsidiary of Harbour Benefit Holdings, Inc.