Introduction: The Executive Path to Healthcare Affordability
With the average annual premium for family health insurance climbing toward an unsustainable thirty thousand dollars, the question of how to meaningfully reduce healthcare costs has become one of the most urgent economic challenges facing the nation. For millions of Americans, the financial strain of medical care is not an abstract policy debate but a daily reality that dictates family budgets, suppresses wages, and stifles economic growth. While major legislative overhauls often stall in a divided government, a path exists for a president to enact significant change through executive authority alone.
This approach bypasses the need for new laws by focusing instead on enforcing and expanding existing rules centered on a single, powerful principle: price transparency. The core argument is that the current healthcare system operates in an opaque environment where consumers—both individual patients and the employers who sponsor their plans—are denied the basic price information needed to make informed decisions. This article explores two specific administrative actions that could be taken immediately to inject free-market competition into the system, empowering consumers and driving down costs.
The Core Problem: Why Price Secrecy Inflates Healthcare Costs
In virtually every other sector of the economy, consumers know the price of a product or service before they agree to buy it. This fundamental market dynamic forces sellers to compete on both price and quality. Healthcare, however, operates under a veil of secrecy where prices are hidden, complex, and often bear little relationship to the actual cost of providing care. This information asymmetry prevents competition, allowing costs to spiral upward without check.
Restoring price transparency is not about creating new government programs or adding layers of bureaucracy. Instead, it is about unleashing the power of the consumer. When patients and employers have clear, upfront, and binding price information, they are transformed from passive price takers into active shoppers. This simple shift fosters a competitive marketplace where providers must justify their prices, high-value care is rewarded, and wasteful spending is exposed, ultimately lowering costs for everyone without a single dollar of new taxpayer spending.
A Two-Pronged Strategy for Executive Action
A comprehensive executive strategy to tackle healthcare costs can be broken down into two powerful, synergistic actions. These proposals are not theoretical; they are rooted in existing laws and regulations that simply require decisive implementation and expansion. Each action is designed to arm a major segment of the healthcare market with the information it currently lacks.
The first action directly empowers individual patients, giving them the tools to shop for common medical procedures with the same confidence they would for any other major purchase. The second action targets the employer-sponsored insurance market, which covers approximately 181 million Americans, by giving businesses the data they need to eliminate waste and negotiate better terms on behalf of their employees. Together, these two initiatives create a pincer movement against price secrecy.
Empowering Patients with Advanced Explanation of Benefits
The most direct way to empower patients is to fully implement the Advanced Explanation of Benefits (AEOB) rule, a key but delayed provision of the bipartisan No Surprises Act of 2020. An AEOB would revolutionize the patient experience by requiring providers and insurers to give a patient a clear, accurate, and binding price quote before a medical service is rendered. This document would detail the total cost of a procedure and precisely what the patient’s out-of-pocket responsibility would be.
This seemingly simple change would transform the healthcare landscape. Instead of receiving a confusing and non-actionable Explanation of Benefits weeks after treatment, patients would have actionable intelligence ahead of time. This upfront financial certainty allows them to budget for care, question potential overcharges, and, most importantly, compare prices across different providers. The ability to shop for care introduces powerful competitive pressure that is currently absent from the system, forcing providers to compete for patients based on value.
This shift from a passive to an active consumer role is where true savings are unlocked. A patient in need of an MRI scan, for example, could use AEOBs to discover that one facility charges $3,000 while another just a few miles away offers the same high-quality scan for $300. Likewise, a routine colonoscopy could cost $12,000 at one center and $1,200 at another. Armed with this knowledge, patients can choose the more affordable option, saving themselves and their health plan thousands of dollars on a single procedure and driving the market toward more rational pricing overall.
Arming Employers with Their Own Health Plan Data
While empowering individual patients is crucial, an even greater impact can be made by tackling the employer-sponsored market. The second executive action involves expanding a forthcoming Department of Labor transparency rule. In its current form, the rule focuses narrowly on the compensation of pharmacy benefit managers (PBMs), which addresses only about 15% of total health plan spending. A president could direct the department to broaden this rule to cover all medical plan costs.
This expansion would grant employers a right they are shockingly denied in the current system: full access to their own de-identified health claims data. Insurers routinely hide this information behind “gag clauses” in contracts, preventing businesses from seeing how their money is actually being spent. By eliminating these clauses, employers could finally fulfill their legal fiduciary duty to ensure plan assets are managed in the best interest of their employees.
With complete access to their data, employers could identify and eliminate enormous waste, such as “spread pricing,” where an insurer or a middleman charges the employer more than it pays the provider for a service and pockets the difference. Businesses could steer employees toward high-value doctors and facilities, root out duplicative or unnecessary procedures, and negotiate directly for better prices. The billions saved would not just lower premiums; they could be redirected toward what businesses and workers truly need: higher wages, better benefits, new hiring, and critical business investment.
Final Verdict: A Market-Based Fix Without New Laws
The analysis presented here demonstrated that these two targeted executive actions offered a potent, market-based strategy to lower healthcare costs without congressional gridlock. By fully implementing the Advanced Explanation of Benefits rule and expanding data transparency for employer-sponsored plans, an administration could address the root cause of inflated costs—price secrecy—by simply enforcing and building upon existing law.
This approach ultimately represented a fundamental shift in negotiating power, moving it away from the entrenched interests of insurers and large provider systems and placing it back into the hands of the true consumers of care: patients, their families, and the businesses that employ them. It was a strategy that benefited patients with lower out-of-pocket costs, workers with higher wages, and businesses with the freedom to invest and grow, all by restoring the principles of competition and choice to the American healthcare system.
