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Senate committee considers 'right to shop' bill that would disclose provider prices, share savings with patients
Summary
Senate Bill 4, presented March 21 by Sen. Shelley Hughes, would require insurers to provide consumers with procedure prices and offer shared‑savings incentives if patients choose lower‑cost providers. Sponsors said the program would put money back in patients' hands and gradually pressure high‑priced providers to lower rates.
Juneau — Senator Shelley Hughes and staff presented Senate Bill 4 to the Senate Labor and Commerce Committee on March 21, describing the bill as an "Alaska Healthcare Consumers Right to Shop Act" that would give patients clearer price information and financial incentives to choose lower‑cost providers.
Hughes said the proposal aims to reduce Alaska’s high health‑care costs by making price information accessible and by splitting savings among patients, employers and insurers when patients select providers that charge less than a specified benchmark. The bill would use tools developed under federal price‑transparency rules and other existing data sources, sponsors told the committee.
Under sponsor examples, if a procedure’s benchmark is $10,000 and a patient selects a provider charging $7,000, the $3,000 difference would be shared: when an employer provides insurance, the sponsor described an equal three‑way split with $1,000 going to the patient, $1,000 to the employer and $1,000 to the insurer for administration. For individuals buying insurance on their own, sponsors said the saving would be split 50/50 between patient and insurer. The sponsor also said that shared savings could be applied toward a patient’s deductible to encourage earlier care.
"It will put cash in the consumer patient's pocket immediately," Hughes said, arguing the approach would also slow price growth over time by adding modest competition to the market.
Leah Preston and Celia Preston (staff to the sponsor) walked the committee through price‑variation examples: they showed Anchorage median and provider price ranges for common imaging and other procedures, with some same‑procedure prices ranging widely between local hospitals and clinics. The presenters cited the federal Transparency in Coverage rule (issued October 2020) as foundational to the bill and noted other states have implemented similar "right to shop" programs.
Committee members asked operational questions. Senator Greg Jackson noted that Anchorage municipal employees already have a "right to know" initiative; staff replied the state rule would build on federal data but adds user‑friendly incentives because earlier transparency efforts did not produce substantial consumer use or price reductions. Senator Yount and others asked how out‑of‑state care would work and whether patients would need to pay travel costs; sponsors said insurance companies could choose to provide travel or lodging support but that such practices vary and are not mandated in the bill.
Preston told the committee that some states and employers offering incentives have demonstrated price pressure that reduced costs over time, and she provided polling and research slides showing broad public support for greater price transparency.
On fiscal notes, Hughes said two reporting and study requirements in the draft (an annual Division of Insurance report and a Department of Administration analysis of AlaskaCare impacts) drove much of the bill's fiscal estimate. She suggested removing those reporting mandates if the committee wished to reduce or eliminate the fiscal note.
There was no committee vote on SB 4 on March 21. The hearing closed after sponsor questions and committee discussion; committee staff provided slides and comparative state examples for members to review.
Speakers: Senator Shelley Hughes, sponsor; Leah Preston and Celia Preston (sponsor staff); Senator Bjorkman (chair); Senator Greg Jackson; Senator Yount; Senator Yundt.
