Does this mean that hospital costs for the uninsured may drop?
If you are covered by medical insurance and you have to log some time in a hospital, in all likelihood a good portion of the cost of providing a bed and services will be discounted pursuant to upfront agreement cut between the hospital and the insurance carrier. Not so, if you show up at a hospital without medical insurance ? you get charged the whole nine yards. And, up until Secretary Thompson's letter, the hospital industry had been saying that they were forced to do so by those government regs.
I heard this on NPR this morning. In that report they added that though hospitals may charge less for those paying out of pocket (uninsured or underinsured), the lower prices may not be advertised - due to government regulations. The reason for that was not addressed. The only result I can imagine is that such regulations would discourage competition, something that one would expect to be desirable.