Rules exist to be followed, not ignored. Or at least, that’s what most people think. But in many cases, hospitals and insurers haven’t been following the rules—and the government has been letting them get away with it.

During Trump’s first term, the administration pursued health care price transparency regulations. But under Biden, the administration didn’t do much to implement or enforce those rules.

Those price transparency regulations implement provisions enacted by Congress in 2010. There continues to be substantial bipartisan support in Congress for requiring public disclosure of the costs of medical services. In December 2023, the House of Representatives voted 320-71 to pass legislation that included additional price transparency provisions (though the Senate never acted on that bill).

Now, President Trump is putting health care price transparency back on the agenda. Recently, he ordered executive agencies to step up implementation and enforcement of these transparency regulations. This means non-compliant hospitals and insurers may actually be forced to follow the existing rules requiring public disclosure of medical services’ costs.

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This is a positive change—one that Congress should reinforce legislatively. But Congress should also build on this change by creating incentives to ensure that price transparency ultimately leads to patient savings.

In theory, by requiring medical providers and insurers to make prices public, the government will enable patients to shop for care—creating competition that will put downward pressure on prices.

Yet making this pricing information publicly available is one thing; patients actually using that information when making decisions is another thing entirely.

Not only that, but price transparency directly challenges entrenched health care business models, which center around opaque financial arrangements and hidden cross-subsidies.

Because of this, any further legislation requiring health care price disclosure should also incentivize patients to actually use that information in decision making, as well as incentivizing health plans to help their enrollees find better value care.

The latter is key.

Health plans are the entities best positioned to translate the “actionable information” of price data into “informed action” by patients shopping for care. But doing that requires health plans rethinking some of their current business practices.

Today, health plans typically negotiate payment rates with doctors and hospitals and—based on the (undisclosed) results of those negotiations—create “networks” of favored providers. Plans then steer (or limit) their enrollees to those providers.

But that whole process is a “black box” for patients, who receive no explanation for why specific providers are in or out of their plan’s network. Nor are patients given the information they need to compare the cost and quality of competing providers.

Rather than limiting patient choices, health plans should leverage the data generated by price transparency to inform enrollees, empower them with easy-to-use shopping applications, and offer them tangible rewards for making better-value purchases.

Software developers have already built applications that can help patients use price data to shop for non-emergency tests and procedures. But health plans should be giving their enrollees those tools and the financial incentives to use them.

For instance, plans should encourage patients to shop for care by sharing with them the savings that result when they choose a less costly provider.

Currently, if a patient chooses a less expensive provider, the plan typically pockets all the savings—giving patients no financial incentive to shop for care. However, that could change dramatically if health plans instead rewarded patients with cash (out of some of the money saved) when they opted to get care from a lower-cost provider.

Congress can encourage that kind of positive change with some modest adjustments to current law.

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First, Congress can clarify in the tax code that when a health plan gives a patient a cash reward for choosing to get care from a better-value provider, that payment is tax-free to the patient (just like other insurance reimbursements or refunds).

Second, Congress can modify the tax code so that patients can deposit health plan rewards into their health savings accounts without those rewards counting against the maximum annual contribution limit.

Third, Congress can amend the law requiring health plans to give enrollees refunds if the plan spends less than 80% of premium revenue on medical care or “activities that improve health care quality.” Specifically, Congress should expand this to also include any money plans spend on incentivizing enrollees to shop for care.

That way, insurer investments in shopping apps and providing cash rewards to patients for obtaining better-value care would count as spending that benefits enrollees (rather than as higher administrative costs, for which plans are penalized).

According to the White House press office, Trump’s Executive Order is meant to “empower patients with clear, accurate, and actionable healthcare pricing information.” But the point of actionable information is to be acted on—and that only happens when people have incentives to do so.

Congress should reinforce the president’s initiative to make health care price information available to consumers. But it should also take the next step and give health plans and patients additional incentives to use that information to shop for better-value care.