AI Explanation of SB 17-FN

This is a production of Citizen in a Republic, which covers New Hampshire legislative politics.

Explainer: Senate Bill 17-FN – Fairness in Insurance Cost-Sharing Calculations

Introduction

Senate Bill 17-FN (SB 17-FN), introduced in the 2025 New Hampshire legislative session by Senator Innis from District 7, aims to enhance transparency and fairness in how insurance companies calculate the amounts that policyholders must pay out-of-pocket for their healthcare services. This bill focuses on “cost-sharing requirements” such as coinsurance, copayments, deductibles, and out-of-pocket maximums.

Key Provisions of SB 17-FN

  1. Comprehensive Cost Inclusion:

    • Current Practice: Insurers and Pharmacy Benefit Managers (PBMs) calculate an enrollee’s cost-sharing responsibilities based primarily on amounts directly paid by the enrollee.
    • Bill’s Change: SB 17-FN mandates that insurers and PBMs must include all amounts paid by the enrollee or on their behalf when determining cost-sharing obligations. This means that any third-party payments assisting the enrollee with their healthcare costs must be factored into their overall financial responsibility.

  2. Exception for High Deductible Health Plans (HDHPs):

    • The bill acknowledges the existence of Health Savings Accounts (HSAs) tied to HDHPs. If including certain payments would make an HDHP ineligible under federal IRS rules (specifically Section 223 of the Internal Revenue Code), insurers can exclude those amounts. However, this exclusion is limited to the deductible portion of the plan and does not apply to preventive care services, ensuring that essential health benefits remain accessible without additional cost burdens.

  3. Specific Exclusions for Prescription Drugs:

    • Generic Alternatives: For prescription drugs that have generic versions, the requirement to include third-party payments does not apply unless the patient has sought prior authorization, undergone step therapy, or navigated the insurer’s exceptions and appeals processes.
    • Branded Biologics: While the bill primarily addresses generic drugs, it does not explicitly cover branded biologics and their biosimilar counterparts. These drugs, often higher in cost and sometimes accompanied by manufacturer copay assistance, could be indirectly affected by the bill’s provisions.

  4. Application to Essential Health Benefits:

    • When calculating annual cost-sharing limits (as defined under federal law in 42 U.S.C. sections 18022(c) and 300gg-6(b)), insurers and PBMs must include expenditures for any services categorized as essential health benefits.

  5. Scope and Implementation:

    • The requirements of SB 17-FN apply to all individual and group health insurance policies, plans, or contracts that provide medical or hospital benefits. The bill’s provisions are effective for policies issued, renewed, or delivered on or after January 1, 2026.

Fiscal Impact

  • State Budget: The bill does not require new funding or create additional government positions. However, it is anticipated to lead to “indeterminable increases” in state revenue through higher insurance premium taxes and potentially increased expenditures at county and local levels due to rising insurance costs.
  • Insurance Premiums: By requiring the inclusion of all payments (including third-party assistance) in cost-sharing calculations, insurers may adjust premiums to account for the increased financial transparency and responsibility placed on enrollees. This adjustment could lead to higher insurance costs for consumers.

Impact on State Health Plans

  • The State of New Hampshire’s Employee and Retiree Health Benefit Plan (HBP), which is a self-funded plan, remains unaffected by SB 17-FN. The bill specifically targets fully insured commercial health plans regulated by the New Hampshire Insurance Department, not self-funded or federally governed plans like Medicare Advantage with Prescription Drug (MA-PD) plans.

Purpose and Rationale

The primary goal of SB 17-FN is to ensure that all financial contributions toward healthcare costs are transparently accounted for, preventing situations where third-party payments obscure the true cost-sharing obligations of policyholders. This transparency aims to promote fairness, allowing enrollees to have a clearer understanding of their financial responsibilities and ensuring that insurance premiums remain balanced and actuarially sound.

Conclusion

Senate Bill 17-FN seeks to refine the mechanisms by which insurance companies calculate cost-sharing, emphasizing full disclosure of all payments related to healthcare services. By implementing these changes, the bill aims to foster a more equitable and transparent healthcare insurance system in New Hampshire, ultimately benefiting consumers through clearer cost structures and potentially more predictable insurance premiums.