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Health Insurance Transparency Rule Faces Uncertain Future

A portion of the Trump-era health insurance transparency rule finalized in October 2020 and set to go into effect in early 2023 appears to be in jeopardy.

The rule requires insurers to disclose cost-sharing estimates at the request of an enrollee (beginning in 2023) and publicly release negotiated rates for in-network providers, historical out-of-network allowed amounts and billed charges, and drug pricing information (beginning in 2022).

In separate lawsuits, the U.S. Chamber of Commerce, joined by the Chamber’s affiliate in Tyler, TX) and the Pharmaceutical Care Management Association (PCMA) are challenging the rule’s requirements related to disclosure of rates and other pricing information but have no complaint against the rule’s cost-sharing provisions.

Where Administration Stands

For their part, Biden administration political appointees have not hesitated to roll back Trump-era regulatory initiatives and replace them with rules that generally strengthen the hand of administrative agencies. The process takes time – about two years – and is subject to legal challenges. To date, the administration has yet to tip its hand on what it intends to do with the insurer transparency rule.

The White House and congressional Democrats had hoped to include far-reaching health care provisions in their multi-trillion-dollar Build Back Better tax and spending bill.  But its demise in the Senate shortly before Christmas appears to have doomed any chance for transformative health care legislation, such as single-payer through expansion of Medicare and price controls on prescription drugs, for the foreseeable future.

With the legislative avenue looking less promising, the alternative is to write new rules and issue executive orders, a process that could also include rewriting insurer transparency rules.

Doug Badger, a senior fellow for domestic policy studies at the Heritage Foundation, believes that price transparency is essential to the provider-patient relationship.

“Without price transparency, patients are powerless,” he tells Health Care News.  “It’s unfortunate that the government has to compel insurance companies and hospitals to disclose their prices to people seeking non-emergency medical care.”

No Surprises Act

The health insurance transparency provision is part of the Consolidated Appropriations Act (CAA) which includes another key law, The No Surprises Act. (see related article).

The No Surprises Act allows for baseball-style arbitration when an out-of-network provider attempts to bill a patient for charges not covered by insurance.

CAA is set to go into effect on Jan 1, 2022.  Regulators spent the final months of 2021 writing rules and guidance documents on how the new laws will operate. Because the rulemaking process will not be completed, federal and state enforcement will be delayed, with insurers and plans expected to comply under a good-faith interpretation of the CAA.

 

Bonner R. Cohen, Ph.D., (bcohen@nationalcenter.org) is a senior fellow at the National Center for Public Policy Research.

 

Bonner R Cohen
Bonner R Cohen
Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position he has held since 2002.

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