5-minute read
It’s no secret that cash-pay healthcare has been gaining ground for years. Employers, frustrated by inflated insurance claims and employees bewildered by opaque billing, have increasingly turned to direct-pay strategies to cut costs and improve access.
Now, thanks to a recent executive order from President Trump, the federal government is once again trying to push the broader system in that direction — but whether the industry will follow is another matter entirely.
A Familiar Push for Price Transparency
Earlier this year, Trump issued a new executive order titled, “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information.” The order revives and expands price transparency rules first rolled out during his first term, mandating that hospitals and insurers disclose actual prices for services, not just estimates, and that this information be easily accessible to patients and employers alike.
That matters for a simple reason: cash-pay healthcare works best when people can see what things cost.
For years, employers and patients alike have been kept in the dark, left to navigate a system where the sticker price often bears no resemblance to what’s actually paid. By forcing providers and insurers to show their hand, the new order could create a more level playing field — one where transparent, direct-pay options stand out.
Also read: Transforming Your Company Health Plan: Proven Solutions for Cost Control and Better Care
Still, we’ve been here before. Similar rules introduced during Trump’s first term were often met with incomplete compliance and toothless enforcement. Many hospitals published non-user-friendly data files or limited the scope of what they disclosed. Whether this new version of “radical transparency” will be meaningfully different remains to be seen.
But for self-funded employers, that uncertainty doesn’t have to be a dealbreaker. With or without full-scale regulatory reform, they already have the flexibility to move toward cash-pay strategies — and as pricing data becomes more available, the case for doing so only gets stronger.
Cash-pay models let employers contract directly with providers, often at rates far lower than what their insurance carriers negotiate. In fact, a study published by Health Affairs journal of over 2,000 hospitals found that nearly half offered cash prices below commercial insurance rates for at least some services.
In some cases, the cash price was significantly less — especially for imaging, labs, and outpatient procedures.
That’s not a glitch in the system. That is the system. Commercial insurance rates are bloated with administrative costs, opaque discounts, and contractual quirks that rarely benefit the employer footing the bill.
Why Cash-Pay Makes Sense — and What to Watch
Self-funded employers that embrace cash-pay strategies often do so in tandem with tools like:
- Direct primary care arrangements.
- Reference-based pricing models.
- Transparent pharmacy benefit managers (PBMs).
- Concierge navigation tools that steer employees toward cost-effective providers.
Together, these tactics can offer employees lower out-of-pocket costs and faster access to care, while employers gain predictability and savings.
Of course, this model isn’t without challenges. Not every market has enough provider competition to support transparent pricing. Employees may struggle to understand when and how to use cash-pay options unless guided carefully. And even with new federal rules, many hospitals and health systems will no doubt still find ways to obscure or delay access to real-time pricing.
The Bottom Line for Employers
For self-funded employers, the message is clear: You don’t have to wait for regulators to force transparency — you can build it into your plan today.
The recent executive order may or may not survive the next election cycle, but the underlying trend is unlikely to reverse. As more hospitals are pressured to post prices and as more data becomes accessible, cash-pay healthcare is moving into the mainstream.
If you're a self-funded employer and you're not yet exploring direct-pay options, now’s the time. The tools are there. The providers are (increasingly) open to it. And with the right plan design and employee education, cash-pay can be more than a cost-cutting tactic — it can be a competitive advantage.
The Mahoney Group, based in Mesa, Ariz., is one of the largest independent insurance and employee benefits brokerages in the U.S. For more information, visit our website or call 877-440-3304.
This article is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.