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Colorado is the first state in the nation to make health care and drug prices more transparent in an effort to increase competition and bring down costs.

Federal rules passed during the first Trump administration requiring health insurance companies to post negotiated prices took effect in 2022.

Kristin Paulson, president and CEO of the Center for Improving Value in Healthcare, said there were major glitches, and the posted data was nearly impossible to decipher. In response, Colorado lawmakers passed a bill last year mandating exactly how insurers had to make data accessible.

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"This is an effort to make sure those prices are more accessible to consumers," Paulson explained. "To make sure that consumers can actually get to those prices and use them, hopefully to be making more informed health care decisions."

Senate Bill 80 requires insurers to post pricing data specific to Colorado and requires them to disclose prices for the most frequently prescribed medicines. The law also calls for the removal of so-called “ghost codes,” billing codes for care likely never delivered, for example, a code indicating a foot specialist delivered a baby.

Americans spend more than twice as much for health care than residents in other wealthy nations. The higher medical bills are due to higher prices, not because people are accessing more services, according to an analysis by the health care research organization KFF.

Paulson believes pricing data collected by Colorado’s Division of Insurance and her group’s Shop for Care tool can help bring down those costs.

"It really gives employers the ability to look at prices," Paulson outlined. "To look at what one plan costs versus another plan, and be able to use some of their market power when they are setting up their benefit plan to drive down some of those costs in the negotiating process."

As Colorado has collected the first round of transparency data, the Division of Insurance said it plans to make data available on its Transparency in Coverage webpage by early next year. The Division also wants to share its findings with researchers interested in helping Coloradans better understand their pricing options.