Mark Galvin, Co-Founder, President, and CEO of TALON, discusses the Transparency in Coverage rule in healthcare, which was added to the Affordable Care Act and requires commercial health plan sponsors to provide transparency in the costs of tests, procedures, and other medical services. The rule aims to provide patients with information on pricing and out-of-pocket costs before committing to services. The lack of awareness and understanding of the rule is in part due to the vested interests of certain stakeholders, such as insurance carriers, who are financially conflicted in driving down the cost of medical claims.
Mark explains, “I’m known as a disruptive innovator, as a serial startup guy. The Transparency in Coverage rule is a rule that was added to the Affordable Care Act, or Obamacare, requiring that commercial health plan sponsors predominantly the employers that pay for the lion’s share of commercial health plans are required now under that law with the new rule to provide to million members an ability to go from total opaqueness in price to total transparency in the costs of the tests and procedures and other things that they’re faced with in their medical journeys.”
“The mistake many of us made as consumers is that we believed our insurance carrier was a good surrogate to represent us as consumers in the marketplace. And what we never, many of us still don’t realize, but many of us kind of woke up to is there’s this thing called the 80/20 rule or medical loss ratio, which puts insurance carriers in a conflicted position. Their businesses are damaged financially by driving down the cost of medical claims because their revenues and premiums are tied to the amount of medical claims.”
“So this is something people didn’t know. And so while we put our trust in people to represent us as consumers, not realizing that it’s not in their best interest to do the right things for us as consumers in terms of their normal business metrics, that it causes a huge conflict, financial conflict and perverted financial incentives in the market.”
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