Bipartisan Legislation to Reduce Health Care Costs Contains Clause for Broker Transparency

Lower Health Care Costs Act, What Brokers Should Know

SACRAMENTO, June 21, 2019 – Senate Health Committee Leaders Introduced the Lower Health Care Costs Act on June 19th in response to complaints about the skyrocketing costs of basic healthcare.

“This legislation,” says Chairman Lamar Alexander (R-Tenn.), “will reduce what Americans pay out of their pockets for health care in three major ways: First, it ends surprise billing; second, it creates more transparency — you can’t lower your health care costs until you know what your health care actually costs. And third, it increases prescription drug competition to help bring more lower cost generic and biosimilar drugs to patients.”

Read the Full Senate Press Release

Essentially, the Lower Health Care Costs Act is an attempt to make health care less expensive by advocating for transparency. What’s worth noting is that this bill contains a clause pertaining to brokers, specifically. Since we are still in the early stages of the bill, it is uncertain what revisions will be made, or if it will be passed. Nonetheless, remaining informed on potential changes will allow brokers to stay ahead of the curve.

Section 308 of the Lower Health Care Costs Act focuses on “[1]Disclosure of direct and indirect compensation for brokers and consultants to employer-sponsored health plans and enrollees in plans on the individual market.” This would require brokers to disclose any direct or indirect compensation, between themselves and the plan carrier, prior to the client making the final decision and in the confirmation documents. The purpose of this clause is based on the notion that compensation for specific plans will lead to a conflict of interest which raises unnecessary costs for the clients. Of course, the intentions of this bill are good, but is the solution fitting?

This bipartisan bill is an example that we can all agree on the price of health care being a problematic rising expense for many. [2]Studies have reported the trouble people have while trying to pay off medical bills resulting in them skimping on groceries, taking on extra work, or even postponing follow up appointments. The health care market is complex and will require multiple factors to change to make an impact, which is why this bill is inclusive in dispersing accountability to all parties relating to healthcare costs. “While transparency may help the health costs epidemic, it would require healthcare as a whole to adjust as well,” says Rosamaria Marrujo, a recognized Medicare insurance leader for over 15 years.

Even the larger parts of the bill discuss transparency between hospitals and health insurance carriers, emphasizing that the deeper issue lies somewhere other than the brokers. However, no one is certain on how the results will unfold, as there is no equation to account for how each entity in this bill will react. Yet the thought process behind this clause is intuitive: eliminate conflict of interests and bring down costs.

Trusted American Insurance Agency is a National Marketing Organization (NMO) headquartered in Rocklin, CA. Trusted American provides a full range of insurance and financial services products across all 50 states for all major and niche carriers, with a specialty in the Senior Marketplace.


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[1] Sec. 308. Lower Health Care Costs Act

[2] The Balance: Health Care Costs Facts