Americans know that health care costs are high but we don’t always know the specific cost of health care. Knowing about medical costs came to the forefront for many employees when they had an incentive to make health care decisions based on both quality metrics and cost, such as when they were introduced to high deductible health plans with health savings accounts and paid the full cost of medical services before their deductible is met. In reality, regardless of the plan, we should all be conscious of what we pay for healthcare, something that is hard to do without actually knowing the true cost.
Background
During the first Trump administration, the Centers for Medicare and Medicaid (CMS) released a final rule on hospital price transparency effective January 2021 requiring hospitals and health plans to publicly share prices and negotiated rates. Hospitals have not typically provided pricing information to patients. The intention with pricing transparency is that by releasing costs, a competitive element between health providers might result in lower health care prices.
In addition, a second final rule on transparency in coverage, applying to health insurers and group health plans, went into effect in July 2022. This rule required plans to post in-network negotiated rates, out-of-network allowed amounts, and negotiated rates for prescription drugs for plan participants and beneficiaries.
2025’s Executive Order
President Trump issued an Executive Order (EO) on February 25, 2025, titled “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information”. The White House released an accompanying fact sheet at the same time. The EO continues the effort to improve and expand the accountability and transparency from group health plans and health insurers to help consumers make informed decisions.
The 2025 EO directs the Departments of Treasury, Health and Human Services, and Labor (the Departments) to take the following action within 90 days:
- Disclose actual prices and not just estimates of items and services
- Issue updated guidance or proposed regulations to:
- Standardize pricing information to ensure pricing is easily comparable across hospitals and health plans, including pricing for prescription drugs
- Update enforcement policies to ensure compliance with the transparent reporting of “complete, accurate, and meaningful data”.
The EO does not explain what is meant by actual prices versus estimates, something upcoming guidance could clarify.
Next Steps for Employers
As part of the EO, the Departments are directed to write guidance and issue regulations by May 26, 2025. Until that happens, employers and plan sponsors are not required to act. Employers should remember that EOs are not laws but indicate the direction of the administration.
The International Foundation monitors regulatory guidance. To stay up to date, see our Regulatory Updates web page.
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.
