What Do We Do With These Prices? Ushering in the Next Phase of Price Transparency Innovation in Medicare Advantage

Am J Manag Care. 2026;32(Spec. No. 6):eSP9-eSP11

Over the past 2 decades, American policy makers have invested in price transparency as a key lever to empower Medicare beneficiaries and constrain health care spending. These efforts accelerated following the implementation of the 2021 Hospital Price Transparency Rule and the subsequent Transparency in Coverage Rule, which required hospitals to publicly disclose the prices of hundreds of services in a machine-readable format. Yet despite substantial regulatory investment, these initiatives have struggled to produce meaningful changes in patient or provider behavior.¹

Much of the policy conversation has framed price transparency as a failed experiment. But the problem is not that transparency itself has failed, but rather that policy makers have focused their efforts on the wrong place. Price transparency initiatives have centered on traditional Medicare and the broader fee-for-service market. However, these programs were never designed to support meaningful cost predictability: Beneficiaries commonly carry multiple forms of coverage (eg, supplemental policies, retiree plans, Medicaid wraparound coverage, stand-alone Part D plans), and fragmented pricing across these entities makes it challenging to estimate out-of-pocket costs. Moreover, the fee-for-service structure and lack of integrated care management support give providers little incentive to factor pricing information into clinical decision-making.

In contrast, Medicare Advantage (MA) already offers beneficiaries substantially greater financial predictability than traditional Medicare in several important ways. MA plans are required to have annual maximum out-of-pocket limits that protect beneficiaries from catastrophic spending exposure. Traditional Medicare has no comparable out-of-pocket cap unless beneficiaries purchase supplemental coverage. This makes for a substantial difference: Results of a recent study show that monthly out-of-pocket costs were approximately 18% to 24% lower in MA than traditional Medicare for a typical enrollee from 2014 to 2019.² In addition, many MA plans have preset co-payments for routine services such as primary care and specialist visits, imaging studies, and common outpatient procedures. These co-payments are often clearly stated to beneficiaries in advance, allowing patients to anticipate costs before receiving care. This is in stark contrast to the fragmented cost-sharing structure of traditional Medicare, where beneficiaries may face layered facility fees, coinsurance obligations, and supplemental insurance complexities that make it impossible to know prospectively what a visit or service will cost. Although it is important to acknowledge that MA costs more per beneficiary than traditional Medicare, this must be weighed against the substantial benefits that beneficiaries derive from its more predictable and navigable financial experience. In fact, this transparency may, in part, explain the rapid growth in MA enrollment over the past decade, as beneficiaries respond to the greater predictability and simplicity of MA pricing structures.

To illustrate how these differences can tangibly impact an individual patient, consider Craig’s story. The author of a KFF profile recounts how her friend Craig was involved in a serious mountain biking accident and rushed to the emergency department, where he was incidentally found to have spinal tumors that would eventually need to be surgically removed. In choosing between keeping his MA plan and switching to traditional Medicare for its broader choice of surgeons and specialists, Craig ultimately decided he could not expose his family to unforeseen costs, and so he chose MA for its annual out-of-pocket limit and greater financial predictability.³

Craig’s story shows us that viewing price transparency as a failed endeavor would fail to acknowledge the strides that MA has already made in offering clearer and more predictable financial exposure. The industry should thus shift its attention toward helping MA build on its existing groundwork of price transparency. MA has moved beyond basic price disclosure; the next challenge is to determine how we can translate pricing information into decisions that meaningfully reduce out-of-pocket costs and overall health care spending. Recognizing that patients, clinicians, and health plans each engage with pricing information differently, we suggest a multipronged approach that delivers cost information at the right time when each group is most likely to use it effectively.

Helping Patients Choose More Affordable Plans

Patients rarely shop for health care services in the way early transparency advocates envisioned. It is unrealistic to expect ill patients or overburdened caregivers to spend time parsing data sets that are unwieldy, complex, and not designed for patient use, especially because listed prices do not necessarily reflect what patients truly pay out of pocket. And even if patients could interpret these files and generate reasonably accurate cost estimates, they are still unlikely to act on price differences at the point of care, where urgency, clinical trust, and preexisting referral pathways usually outweigh cost considerations.⁴ However, stories like Craig’s show us that patients do compare prices when choosing between insurance products and assessing the financial protection, simplicity, and expected out-of-pocket exposure of different options. This implies that for patients, price transparency may matter less at the point of care but is an important consideration in plan selection.

This is where we should focus our efforts to operationalize pricing information for patients. Existing tools such as Medicare Plan Finder already allow patients to compare MA plans based on premiums, provider networks, formularies, Star Ratings, and maximum out-of-pocket limits, but these comparisons are not personalized to a patient’s medical history or utilization patterns. Tools like Medicare Plan Finder could evolve to leverage prior claims data, medication lists, and condition-specific utilization patterns to create personalized estimates of annual spending under different MA plans, including expected co-payments, drug costs, and catastrophic spending exposure. We hope that giving patients the tools to choose the right plan based on anticipated future financial exposure will create better purchasing decisions that ultimately lower out-of-pocket spending.

Steering Clinicians Toward Lower-Cost Ordering and Referral Decisions

Although patients are not the right audience for pricing information at the point of care, clinicians could be. Clinicians make many of the downstream decisions that determine health care spending—including which medications to prescribe, which specialists to refer to, and where patients receive imaging, procedures, or postacute care—but cost information is rarely visible within routine clinical workflows. As a result, clinicians often unknowingly direct patients toward substantially higher-cost options despite clinically equivalent, lower-cost alternatives. MA plans are uniquely positioned to address this problem because they already maintain the provider networks, negotiated rates, referral management systems, and utilization data that could be integrated into clinician-facing tools.

There is a substantial opportunity for technology to help steer clinicians toward lower-cost ordering and referral decisions. These tools could be embedded directly into electronic health records and referral workflows. For example, when a clinician orders an MRI or specialist referral, systems could automatically and preferentially display lower-cost sites of care (eg, a freestanding MRI center is usually much less expensive than a hospital outpatient imaging department for the same MRI study) and in-network providers, along with expected patient co-payments. Importantly, these tools must function passively within existing clinical workflows rather than requiring clinicians to actively search for pricing information themselves, as any intervention that adds friction or administrative burden to already-strained clinicians is unlikely to succeed.

Incentivizing Plans to Operationalize Price Transparency

For plans, the right time to incorporate pricing information is during infrastructure development, which shapes how patients and clinicians make cost-conscious decisions. As previously discussed, MA organizations already have significant price transparency, but operationalizing this transparency for patients and clinicians requires substantial investment in analytics and workflow integration. Some more forward-thinking plans have already begun making these investments, but the question remains: How can we incentivize this across the broader MA program? One possible solution is for CMS to incorporate measures of price transparency into Medicare Advantage Star Ratings. Because higher Star Ratings are tied to quality bonus payments and improve plans’ ability to attract and retain beneficiaries, adding transparency to the ratings system should create meaningful financial incentives for plans to invest in the needed infrastructure. Over time, this could help shift price transparency from a reporting requirement into a core component of how MA plans compete on value, affordability, and patient experience.

The promise of price transparency was never just to publish prices online. It was to help patients navigate the health care system with greater confidence and financial protection. MA offers the clearest opportunity yet to achieve this vision. Although MA may increase overall Medicare program spending relative to traditional Medicare, its growing popularity suggests that beneficiaries place substantial value on these features. The next phase of price transparency innovation should therefore focus not on creating transparency from scratch, but on refining and operationalizing the transparency that already exists within the MA program.

Author Information

Dr Chandrashekar is an internal medicine resident physician at Massachusetts General Hospital in Boston. Dr Jain is president and CEO of SCAN Group & Health Plan, based in Long Beach, California.

REFERENCES

1. Benavidez G, Frakt A. Price transparency in health care has been disappointing, but it doesn’t have to be. JAMA. 2019;322(13):1243-1244. doi:10.1001/jama.2019.14603
2. Ippolito B, Trish E, Vabson B. Expected out-of-pocket costs: comparing Medicare Advantage with fee-for-service Medicare. Health Aff (Millwood). 2024;43(11):1502-1507. doi:10.1377/hlthaff.2024.00295
3. Neuman T. Traditional Medicare...disadvantaged? KFF. March 31, 2016. Accessed May 15, 2026. https://www.kff.org/medicare/traditional-medicare-disadvantaged/
4. Mehrotra A, Dean KM, Sinaiko AD, Sood N. Americans support price shopping for health care, but few actually seek out price information. Health Aff (Millwood). 2017;36(8):1392-1400. doi:10.1377/hlthaff.2016.1471