President Donald Trump on Monday issued an executive order designed to pressure insurers, doctors and other health-care providers to disclose more information about their prices.
The executive order will direct the Department of Health and Human Services to require hospitals and insurers to disclose negotiated rates for services, as well as provide patients with out-of-pocket costs before their procedures.
"We are fundamentally changing the nature of the health care marketplace," Trump said before signing the order.
Trump said the lack of price transparency has benefited industry giants "greatly" and has cost Americans millions of dollars in health care costs.
Price transparency can "empower" patient choice, Health and Human Services Secretary Alex Azar said in a call Monday with reporters.
"The president has a clear vision for American health care," Azar said. "That's the promise he's made to American patients, and today represents a historic step for delivering on that promise."
Along with price transparency for patients, the administration will make available to researchers and health care providers data that will "help them develop tools to provide patients with more information about health care prices and quality," the White House said, adding the administration will improve quality measurements and make them public.
Trump said his order is the "opposite" of the Affordable Care Act, also known as Obamacare, by giving "much better pricing." The order intends to improve consumer incentives by by expanding the benefit of Health Savings Accounts and other tax-preferred health accounts.
The order also requires HHS to determine further regulatory steps that need to be taken to address surprise billing, while looking into other barriers that impact transparency in health care costs, according to Azar.
Shares of major U.S. insurance companies and hospitals were down Monday after reports of the planned order surfaced. The stock of insurers Anthem, Centene, Humana and Cigna all dropped in morning trading. Hospital stocks were down too, with Community Health and Tenet Healthcare falling Monday morning.
The executive order follows Trump's announcement of his re-election campaign last week. High health costs have become a rare bipartisan issue with lawmakers on both sides of the aisle demanding changes. Trump has made lowering prices one of the key issues of his administration as health care remains a top issue for voters in the 2020 elections.
Trump said by signing the executive order, he is continuing his campaign initiative to put American patients first.
Earlier this year, the Trump administration announced it would require pharmaceutical companies to disclose the price of their prescription medicines in television commercials starting in July, sparking a lawsuit from Amgen, Merck and Eli Lilly.
Azar said the executive order Monday is a move to bring transparency to the entire industry following the Trump administration's new rules requiring drugmakers to disclose their prices in TV ads.
While advocates say the order will allow Americans to choose the lowest-cost health care services, some critics in the industry say it could actually cause prices to rise if businesses learn their competitors are receiving greater discounts from insurers.
— CNBC's Bertha Coombs contributed to this report.