Affordable health care is a goal across states and throughout different agencies and offices with various roles and responsibilities, from health care purchaser to economic development.
With health care expenditures growing, access to critical care declining, and potential coverage losses looming, affordability was a consistent discussion topic throughout NASHP’s annual conference. There are significant challenges and no easy answers, but states continue to develop and implement policy options and are making iterative strides.
Broadly, it’s recognized that U.S. health care prices are too high, and they drive up health insurance premiums, which could force some people to forego coverage. Individuals without health insurance may delay or go without needed care or not be able to pay for the services they receive, which directly affects providers and could lead to even higher prices to offset revenue losses.
Not all health care is the same. While national data (confirmed by states that track health spending) show hospital and prescription drugs are cost drivers, rural hospitals and providers are financially struggling. At the same time, access to primary care, behavioral health, and maternity services are generally declining. As states seek affordability strategies, many recognize that sweeping policies that cap all health care prices are not tenable. Instead, state leaders are interested in strategies that seek targeted price constraints and investments in some providers. Some states are exploring alternative payments to support system transformation.
State strategies vary depending on their existing infrastructure, available budget to support new or expanded oversight or enforcement responsibilities, and the will to enact changes. During our conference, Rhode Island shared how the state leverages its Health Insurance Commissioner’s premium rate review process to contain insurers’ hospital reimbursement rate growth, using CPI as a benchmark, while incentivizing investment in primary care. Analysis of the policy, which has been in effect since 2010, indicate significant savings in total healthcare spending that result in lower health insurance premiums.
Indiana leaders discussed the state’s continued commitment to addressing health care costs with the enactment of multiple laws in 2025 that include various provisions targeting prices, consolidation, and improve the transparency of pharmacy benefit management. Highlights of these new policies include requiring the five largest tax-exempt health systems in Indiana to lower their in- and outpatient hospital prices to at least the statewide average, which will be determined by using 2023 and 2024 commercial claim data. The law also expands the physician ownership tax credit to support independent doctors and requires reporting of certain health care provider ownership information to the state. Further provisions require pharmacy benefit managers (PBMs) to provide information on drug rebates and to share claims data with third party administrators (TPAs) to improve TPAs’ understanding of how health plan funds flow and increase their ability to be fiduciaries to their plans.
Also spotlighted at NASHP’s conference, Colorado enacted robust PBM legislation that establishes a flat service fee, restricts spread pricing, sets a transparent reimbursement price plus dispensing fee for pharmacies, requires pricing and data disclosures from PBMs to health plans, and more.
Oklahoma’s Attorney General’s office discussed their work to enforce the state’s PBM laws and regulations with an eye on consumer protection and cost savings.
A North Carolina state employee health plan official explained the hard decision to end the plan’s coverage of GLP-1s for weight loss. After months of failed negotiations with the drug manufacturer to lower the drug’s price, the plan could have either doubled employees’ monthly premium contributions (from $50 to $100) or ceased its coverage.
Connecticut also enacted a law with multiple provisions that aim to lower prescription drug costs. Notably, the law limits price increases on generic and off-patent drugs to inflation (CPI) by using tax penalties as enforcement. The approach targets widely used medications but still incentivizes innovation. Additionally, there are provisions that increase transparency and oversight of PBMs, allow state agencies to bulk-purchase drugs and even explore engaging federal partners to allow production of generic GLP-1s in the state.
These are just some of the state strategies discussed when leaders connected in person to talk about how to improve health care affordability while health coverage costs increase at an unsustainable rate. State officials recognize the need to address high prices to support individuals access to critical providers, hospitals, and prescription drugs.
For more information on states’ legislative activity related to hospital and health systems and prescription drug pricing, check out NASHP’s legislation trackers.
