Bill Description: House Bill 219 adds new regulations for how health insurance companies may count enrollees’ contribution toward cost-sharing requirements in their health plan.

Rating: -1

Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?

House Bill 219 creates new regulations for how insurance companies allow enrollees to pay their share of health care costs — known as a “cost-sharing requirement.” Specifically, this legislation requires insurance companies to count any payments made directly by the enrollee or by third parties on their behalf toward this requirement. It also mandates they include spending on certain prescription drugs in this tally.

The natural market failure of health insurance is that it removes the connection between the consumer and the payer. This causes consumers to be less sensitive to prices and judicious about their use of services. The point of a cost-sharing requirement is to artificially impose these market incentives on enrollees to keep costs down. This is done through imposing copays, deductibles, or other requirements. 

Dictating how insurance companies count enrollees’ contributions to their cost-sharing requirement — particularly by mandating third parties, as this legislation seeks to do — would remove important market incentives. Mandating the injection of yet another payer into an already complicated health care market naturally raises the cost of doing business.

(-1)