For far too many Texans, health care has become unaffordable – to the point of being unobtainable.

Our goal is that Texans can get the care they need when they need it. Barriers to care – such as a lack of providers in a community or a lack of affordability – prevent Texans from accessing needed care, contributing to unhealthy outcomes and high rates of medical debt. Our data shows that the price of health care – even among those with insurance – is causing people to skip the care they need. With healthy markets, Texans are able to get the care they need, when they need it, at a price they can afford.

This policy blueprint, or treatment plan, provides a diagnosis of what’s driving higher health care prices and concrete steps that Texas policymakers can take today to address high prices in health care across Texas.

Key takeaways

  • More than half of Texans are skipping or postponing care due to costs.
  • Nearly one-third of Texas adults have unpaid medical bills.
  • Health care prices are increasing for Texas families and employers.
  • These prices are the result of unhealthy markets created by anti-competitive practices.
  • There is strong demand for the Legislature to lower the cost of health care.
  • There are specific steps the Texas legislature can take to address these trends.

What the data says about market concentration


of Texas’ population lives in “highly” or “very highly concentrated” hospital market concentration, as compared with other states like California (3%), Illinois (10%), and Georgia (11%), according to our analysis.

Percentage of Texas Population Living In Metro Areas Rated As Highly or Very Highly Concentrated

What the data says about prices

Even Texans with coverage aren’t getting the care they need due to high prices – 56% of insured Texans reported skipping or postponing care due to costs in a recent Episcopal Health Foundation survey.

88% of Texas adults indicated that lowering the amount that individuals pay for health care should be a top priority of the Texas legislature, as discussed in our blog.

Average annual premiums to cover a family on employer plans in Texas are more than $20,000 – that’s one-third of the average Texas household’s annual income.

According to a 2018 survey by the Financial Industry Regulatory Authority, 29% of Texans – 6.2 million adults – have unpaid medical bills.

Healthy markets must be informed, competitive, and engaging

Informed Markets Need Transparency

Information transparency is the lifeblood of a healthy market. Without it, businesses and consumers cannot make informed choices about when, where, and how to best invest their resources.

Unfortunately, far too many Texans still can’t get meaningful price estimates in advance of medical services, and end up receiving bills that don’t explain what the charges are for. Moreover, current law prevents Texans from receiving information on the quality of their doctors and prohibits researchers from utilizing a statewide health care database to publish information that grades doctors and insurers based on the outcomes of their patients.

Competitive Markets Provide Choices

A competitive market is a natural outcome of consumer demand for goods and services. Where there is healthy competition, no single business has the power to dictate the market and well-informed consumers can choose from an array of options to best fit their needs.

Today, Texas’ hospital market consolidation is well above the national average, leading to market power concentrations and market power abuses. Texas policymakers have an opportunity to limit opportunities for further market concentration, reduce the existing concentration of markets; and/or mitigate the harmful impacts that existing concentration has on prices.

Market Engagement Requires Smart Incentives

Where transparency and competition exist, employers are empowered to leverage opportunities to design intelligent benefit plans that incentivize their employees to seek out high-quality, low-cost care.

Under existing law, however, employers and health plans can be prevented from providing incentives that reward customers for choosing lower-cost, higher-quality options.

What can be done

Over the years, Texas legislators have been adopting measures around hospital price transparency and elimination of surprise medical bills. 

In 2023, legislators have an opportunity to build upon existing price transparency requirements, eliminate restrictions preventing disclosure of quality information, address the growing impact of consolidation and market power, and limit the potential of private equity from adding hidden fees to your bill.

Competition can be restored to health care markets by prohibiting insurers, employers, and providers from entering into contracts that include:

  • Anti-steering clauses that restrict employers and health plans from encouraging enrollees to obtain services at a competitor, or from offering incentives to utilize specific providers ;
  • Anti-tiering clauses that require employers and health plans place all physicians, hospitals, and other facilities associated with a hospital system in the most favorable tier of providers;
  • Gag clauses that prohibit any party from disclosing relevant price or quality information to the government, enrollees, treating providers, plan sponsors, and potential enrollees and plan sponsors; and
  • Most favored nation clauses that prevent providers from offering prices below those contracted with a particular carrier.

And by ensuring that when health benefit plans encourage their enrollees to obtain a health care service from a particular provider – including offering incentives to encourage enrollees to use specific providers, introducing or modifying a tiered network plan, or assigning providers into tiers – that they do so for the primary benefit of the enrollee.

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