Transparency Is Not Government Overreach. It’s Fiduciary Responsibility.

The debate over health care transparency has taken an odd turn. Critics argue that requiring disclosure of negotiated rates and middleman compensation interferes with free markets by exposing proprietary information. But their objections don’t track once you understand the complex structure of employer-sponsored health plans and the oft-forgotten rudiments of market accountability.

Transparency is not a regulatory intrusion into private markets. It is a necessary condition for fiduciaries to fulfill their legal obligations—and for markets to function at all.

Start with the claim that negotiated rates are proprietary and should remain confidential. In some commercial transactions, that argument holds: A retailer is not required to disclose its wholesale costs, and manufacturers do not routinely reveal supplier discounts. But employer-sponsored health plans are not ordinary commercial transactions. They are fiduciary arrangements governed by federal law. Employers, unions, and other plan sponsors serve as fiduciaries, responsible for managing plan assets on behalf of workers and ensuring that benefits are administered prudently and in the participants’ best interests.

That responsibility cannot be fulfilled in the dark.

Fiduciaries must ensure that service provider compensation is reasonable. They must oversee plan performance. They must evaluate whether the benefits delivered match the prices paid. Yet in today’s health care marketplace, critical financial information is often shielded from the very parties legally responsible for oversight.

Pharmacy benefit managers (PBMs), insurers, and other intermediaries are not independent actors operating separately from plan fiduciaries. They act under delegated authority. They negotiate prices, design formularies, structure benefits, and move billions of dollars through complex rebate and fee arrangements—all on behalf of the plans they serve.

When the financial terms governing those decisions are hidden, fiduciaries can’t fully evaluate whether those arrangements are appropriate or whether they are driven by individual profit motives. Transparency in this context is about giving fiduciaries access to the information they need to meet their oversight obligations.

Critics also argue that transparency mandates represent unnecessary government intervention. But providing fiduciaries with transparency is not a new idea. It is central to the Employee Retirement Income Security Act of 1974 (ERISA), the federal law that sets the standards for employer-sponsored benefits, including health plans, and establishes fiduciary responsibilities. The statute requires fiduciaries to ensure that service provider compensation is reasonable and that the benefit plans serve their participants’ interests. Although that duty is not new, the system itself has grown more complex.

Modern health care benefit markets involve layered negotiations among manufacturers, PBMs, pharmacies, insurers, group purchasing organizations, and consultants. Payments are fragmented across rebates, administrative fees, spread pricing, data fees, and performance guarantees. The financial flows are opaque by design. In a system this complex, structured disclosure is not an expansion of government authority—it is an adaptation of long-standing fiduciary principles to a marketplace that has evolved far beyond what Congress envisioned more than 50 years ago.

The Department of Labor’s proposal on PBMs, the Improving Transparency Into Pharmacy Benefit Manager Fee Disclosure rule, reflects this reality. It does not dictate how PBMs must operate or prohibit any specific compensation model. Instead, it ensures that fiduciaries can see how PBMs are compensated and how plan-related funds move through the system.

That is oversight.

A third common objection is that exposing PBM compensation is misguided or harmful. This claim assumes that fiduciaries do not need this information to perform their duties. This claim is difficult to reconcile with ERISA itself. Employers and plan sponsors are legally responsible for plan administration, regardless of the areas where they delegate authority. They must evaluate plan performance, oversee service providers, and ensure that the benefits they provide function as intended.

Transparency around compensation models such as rebates does not eliminate profits or restrict legitimate business models. Instead, it ensures that fiduciaries can understand the economic arrangements shaping plan performance. This is not regulatory micromanagement. It is basic governance.

Those who suggest that transparency alone can’t fix every structural problem that plagues the health care markets are right. Transparency is not a cure-all. It doesn’t create competitors where none exist—but it creates the preconditions for competition. Nor does it make modern benefit design less complex, but it does create an avenue—cash prices—for those who want less complexity. It is also an essential tool to make TrumpRx and other forms of medical wallets, such as health savings accounts, meaningful.

Fulfilling fiduciary responsibilities does not depend on perfect markets, but it does need accountability. Transparency around prices, including cash prices, gives fiduciaries the visibility they need to exercise judgment and oversight on behalf of workers.

Employer-sponsored health plans are a key source of health care coverage in the United States—covering more than 150 million Americans. The fiduciaries legally responsible for managing those plans should not be asked to operate without access to important financial information. The Department of Labor’s proposed PBM transparency rule helps restore that visibility. It reinforces the principle that those entrusted with managing employee health care benefits must have the information they need to do so responsibly.

Transparency is not an attack on markets. It is the prerequisite for markets and for fiduciary accountability. Without the ability to see prices in advance, you don’t have a market—and we don’t have markets in health care. DC lobbyists may hate it, but the American public is grateful this administration is taking the idea of free markets in health care seriously.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.