Chicago’s Morning Answer host Mike Koolidge, filling in for Dan Proft, welcomed Phil Kerpen, president of American Commitment, to discuss the state of healthcare price transparency enforcement in the United States. Koolidge opened by noting that despite a mandate from President Trump’s first term requiring Medicare and Medicaid-participating hospitals to publicly post their prices, compliance remained weak throughout the Biden administration due to limited enforcement.
Kerpen said federal officials have recently begun sending warning letters signaling intent to issue fines against noncompliant hospitals, but cautioned that current penalties, often in the range of one to two million dollars, are unlikely to meaningfully deter large hospital systems that may simply choose to contest the fines. He argued that a stronger federal transparency law is needed, and noted that relevant legislation has advanced out of committee in both the House and Senate, though its prospects for reaching a floor vote and overcoming a potential filibuster remain uncertain.
Kerpen pointed to reporting that Senate Minority Leader Chuck Schumer had privately told major New York hospital systems that he would not support any healthcare legislation without their approval, suggesting the resulting public scrutiny may have created some momentum toward legislative action out of embarrassment. Kerpen proposed a simplified alternative to increased fines, suggesting that patients should not be required to pay for any medical service if they were not informed of its price beforehand, arguing such a rule would rapidly force price disclosure across the industry.
Kerpen also warned that continued resistance from hospital systems to transparency requirements risks pushing state governments toward blunter interventions such as direct price caps, citing examples in Michigan and Indiana capping certain charges at a percentage of Medicare reimbursement rates. He argued that such price controls tend to function as floors rather than ceilings over time and distort resource allocation, making them a less desirable outcome than a genuinely competitive, transparent market.
Koolidge and Kerpen discussed the often significant price disparities between insurance-billed and cash-pay medical services, with Koolidge recounting a personal experience receiving a substantially lower price for a minor dermatological procedure when paying directly rather than through insurance. Kerpen explained that some providers report earning more from cash transactions than insurance-based payments due to reimbursement delays and administrative costs associated with insurers, reinforcing his broader argument that opaque pricing structures inflate costs across the system.
Asked whether meaningful reform could survive a future Congress with divided or Democratic control, Kerpen expressed measured skepticism, noting that Democratic health policy priorities in recent decades have generally trended toward expanding government control and insurer influence rather than transparency and market competition. However, he noted that public support for price transparency polls extremely high, comparing it to similarly broad public support for voter identification requirements, and said bipartisan movement is not impossible given the issue’s popularity. Kerpen outlined a broader vision for healthcare reform built around three components: transparent pricing, expanded competition through easier entry for independent physician practices and clinics, and greater individual control over healthcare spending through consumer-directed accounts rather than funds flowing directly to insurers or government programs.