Working to Lower Health Care Costs for Hoosiers

Employers in Indiana who pay for their employees' health care should be able to trust that the health plan intermediary they work with is acting in the employer's best financial interest – not the best interest of the intermediary.

This year, Senate Republicans are prioritizing a bill that would hold businesses in the health insurance industry to higher standards in an effort to lower health care costs for Hoosiers.

Senate Bill 3 would stipulate that third-party administrators (TPAs), pharmacy benefit managers (PBMs), employee benefit consultants and health insurance agents/brokers who are compensated on a percentage basis have a fiduciary responsibility to the health plan sponsors with whom they work.

"Fiduciary responsibility" is a legal standard already used in professions like financial advising, accounting and pension administration. It requires a party to act prudently and solely in the best interest of their client when making financial decisions on their behalf.

Concerning health insurance, plan sponsors are typically employers who provide coverage to their employees. Employers either purchase the insurance outright, or they pay claims through their own funds but contract with TPAs and PBMs who help create benefit plans and process claims, and who are trusted to make the best choices for employers and their employees.

When Hoosier employers work with these health insurance companies to help cover their employees' medical costs, both the employers and employees should be able to have full trust these companies are working to find the best and most affordable coverage.

There are many concerns surrounding the health insurance industry, including its opaque practices and conflicts of interest – and it's the clients who are put in positions of financial risk. By legally requiring these companies to act in the plans sponsor's best interest, we can remove bad financial incentives that drive up the cost of health insurance, which would ultimately ensure Hoosiers get access to more affordable health care.

SB 3 passed the Senate unanimously and will now move to the House for further consideration.

To learn more about this bill, click here.