Washington Examiner Op-Ed Highlights Health Insurers’ Profiteering from Price Opacity

Cynthia A. Fisher, CEO and Chair of PatientRIghtsAdvocate.org, has an op-ed in the Washington Examiner highlighting spring financial disclosures by major American health insurers showing sky-high profits and executive compensation. Cynthia explains how this profiteering is not only a function of fewer claims paid out in a pandemic year but also the result of opaque pricing practices that prevent consumers from shopping. Ultimately, she argues, price transparency can redirect this profiteering to patients' pocketbooks. Writes Cynthia:

Health insurers can maintain inflated prices because they hide their contracted rates and out-of-pocket prices from patients, preventing them from shopping for the best quality care and coverage at the lowest possible prices. Insurers generally don't inform consumers of their "patient responsibility" until after bills arrive in the mail weeks and months later. By that time, there's no recourse or ability to shop for a better value. This opaque dynamic allows insurers to charge far more than they could in a functional, competitive marketplace and profiteer by keeping patients in the dark.

Beginning this year, hospitals are required to disclose their real prices, including their discounted cash and secret negotiated rates. Patients can use this information to see what their insurers pay for care. Yet, patients are still generally unable to get upfront access to their out-of-pocket responsibility, which is the most important price for many covered patients. Insurers can do right by patients and immediately reveal this pricing information.

Soon, they won't have a choice. Beginning next year, a new Health and Human Services rule takes effect that requires health insurers to reveal patient-specific cost-sharing information so that consumers can compare coverage alternatives based on prices and quality. The economic and anecdotal evidence suggests that such price transparency will lower the price of care and coverage by 30% to 50%, helping consumers while reining in out-of-control industry profits and compensation. More than 90% of people support such price transparency, according to a recent Maris poll….

Such savings can provide a real economic stimulus, at no cost to taxpayers, as employees redirect dollars that formerly went to sky-high healthcare costs to spending and saving. Employee wages can rise because compensation will no longer be so largely allocated to health benefits. And employers can save money due to a reduced employee healthcare burden. Price transparency will therefore improve personal and company bottom lines.

Read the full op-ed in the Washington Examiner here.