Americans who get health insurance through the workplace would pay less for health care if hospitals’ anticompetitive deals with health insurers were banned, a White House report says.
The federal government has sued two major hospital systems alleging such anticompetitive deals. In separate antitrust lawsuits in 2026, the Justice Department accused the hospital systems New York-Presbyterian and OhioHealth of using their market positions to force health insurers to forego lower-priced competitors.
In a new report, White House officials detailed potential savings if the federal government banned such anticompetitive contracts. Monthly premiums on workplace insurance plans would drop 6.5%, which would yield annual savings of about $1,755 per family and $606 per individual, according to the White House’s Council of Economic Advisers report.
The report estimated hospital prices would fall 18% in cities affected by anticompetitive deals. Such a ban would save about $4,100 for every patient admitted to a hospital that eliminated such contracting terms.
The White House’s Council of Economic Advisers published the report as the Trump administration seeks to counter attacks from Democrats on health care affordability.
Democrats have blamed Congressional Republicans and President Donald Trump for allowing enhanced Affordable Care Act subsidies to expire this year, making ACA health insurance more expensive for some enrolled in marketplace plans. More than 5 million people are expected to lose Medicaid coverage by 2034 due to work requirements and other changes to the federal-state program for low-income families, according to a Congressional Budget Office estimate.
But White House officials say the report reveals how the administration is handling affordability. Instead of using taxpayer dollars to fund subsidies to lower out-of-pocket costs for consumers, administration officials are targeting rising prices charged by hospitals, drug companies, and other health companies.
Trump also has sought to pressure pharmaceutical companies to lower prices on prescription drugs through his most favored nation deals. The Trump administration also launched TrumpRx, a direct-to-consumer website that lists discounted prescription drugs.
The Trump administration has not adopted a rule or backed legislation that would ban anticompetitive contracts. But officials expect the DOJ’s lawsuits against two high-profile hospital systems will command the attention of hospital industry leaders.
“Once people appreciate that the DOJ is very serious about this, we expect there will be ripple effects,” said a White House official.
The DOJ filed a proposed settlement with OhioHealth on June 16 that would forbid the Ohio health system from adopting terms with health insurers that would deter budget-conscious plans.
The proposed settlement “is another example of how this Department of Justice is bringing down healthcare costs for consumers and fighting the anti-competitive behavior that drove them up in the first place,” Acting Attorney General Todd Blanche said in a statement.
Vivian Ho, an economist at Rice University’s Baker Institute for Public Policy, said the DOJ’s lawsuits against major hospital systems are a “great step in the right direction for lowering health care prices.”
She said employers in general have been slow to steer workers toward lower-priced health care options but said it would help employers do so if anticompetitive language is removed from hospital-insurer contracts.
How Hospital Contracts Raise Prices for Consumers
The White House report details how behind-the-scenes negotiations between hospitals and health insurers can raise prices for consumers.
The report highlights three practices hospitals with a dominant market position use to block or limit competition from lower-cost health providers:
■ Anti-steering provisions prevent health insurers from directing patients to lower-cost medical providers.
■ Anti-tiering language in contracts makes the insurer place the dominant hospital in the most favorable cost-sharing tier of an insurance plan. Such moves can limit employer and insurer efforts to influence consumers to choose lower-cost hospitals.
■ All-or-nothing contracts mandate insurers include all of a dominant health system’s hospitals and doctors as part of the insurance plan’s network — or none at all. Such provisions can prevent rival hospitals from attracting enough patients to adequately compete, the report said.
The report estimated about 24% of Americans with an employer health insurance plan live in communities where dominant hospitals had such contracts in place. The contract terms produced “measurable effects” on prices they pay for health insurance, the report said.
If these contract clauses were banned, the report estimated employers and consumers would save about $45 billion each year on insurance premiums. Insurance premiums rise based on total medical spending.
Such savings would presumably be passed along to workers through lower insurance payroll deductions or higher wages.
Reporting by Ken Alltucker, USA TODAY / USA TODAY Network via Reuters Connect
Read the full article here
