Employers May Be Unaware They Are Overpaying for Health Care 

By Consumers for Quality Care, on February 7, 2024

Employers May Be Unaware They Are Overpaying for Health Care 

Although employers have a fiduciary responsibility to ensure their employees are getting the best health plan at the most affordable rate, price transparency laws make that charge difficult to guarantee, according to Axios.  

Employers typically pay most of their employees’ insurance premiums, but a recent JAMA Open Network study found that employees are paying more for their health care relative to their wages than they were 30 years ago. Lower-income employees and employees of color were found to be disproportionally affected by the rise in health care costs. 

Employers are under increasing legal pressure to ensure they aren’t wasting money on overpriced health insurance for their workers. Despite this pressure, employers often face challenges in accessing data about health care prices, making it difficult to determine if they are getting a fair deal.  

New federal laws require employers to certify that their contracts with health care administrators and providers contain no gag clauses that would prevent them from accessing pricing data. Employers are finding it difficult to comply with these regulations because the administrators of these plans are often unwilling to disclose that information. Even if a gag clause is found by the employer, it can be difficult to have it removed.  

Employers are now calling on Congress to provide a legislative solution that would strengthen price transparency rules across the health care system. One bill currently in the House of Representatives would require health care facilities to post their negotiated prices and for PBMs to report their spending on prescription drugs. A Senate bill seeks to give employers daily access to insurance claims data and mandate the public disclosure of actual negotiated prices. 

Federal price transparency laws are beginning to expose price disparities and allow consumers to access information on how much they will be charged for services in advance. Despite this positive action, more work must be done in order to deliver common-sense health care reform for consumers. CQC urges government officials to strengthen price transparency laws and enforce these laws more vigorously.