HR 1776119th CongressIn Committee

New Health Options Act of 2025

Introduced: Mar 3, 2025

Standard Summary

Comprehensive overview in 1-2 paragraphs

The New Health Options Act of 2025 would create a new federal reinsurance program to help reduce premiums for off-exchange health plans (plans sold outside the ACA Marketplace). Administered by the Secretary of Health and Human Services, the program would reimburse insurers for high-cost claims for eligible individuals, with funding limited to up to $6 billion per year from 2026 through 2030. The bill also restructures certain market rules—such as how risk pools are organized across plans, certain age-rating limits, and the treatment of opt-out plans—along with new requirements to improve price transparency and to apply some out-of-network costs toward deductibles and out-of-pocket maximums. Several provisions would take effect for plan years beginning in 2026. In practice, the bill aims to lower off-exchange premiums by sharing high-cost risks with a federal reinsurance pool, while also pushing for clearer price information for patients and encouraging high-value, lower-cost care, including more aggressive handling of out-of-network charges.

Key Points

1Creation of a Reinsurance Program for Off-Exchange Plans
2- Establishes a federal reinsurance program, run by HHS, to pay a portion of high-cost claims for eligible individuals enrolled in off-exchange plans, with the goal of lowering premiums.
3- Funding: For 2026–2030, annual appropriations equal to $50 times the aggregate number of member months for all eligible individuals, capped at $6 billion per year. Unspent funds can be carried forward to future years. Funds may not be used for certain services described in existing law (as of enactment).
4How the Reinsurance Program Works (Attachment Point, Payment, Cap)
5- Each year, the Secretary would set an attachment point, a payment proportion, and a reinsurance cap.
6- For 2026: attachment point $110,000; reinsurance pays 90% of the portion of claims above the attachment point up to a $300,000 cap per claim/individual.
7- The Secretary can adjust these amounts to ensure spending stays within the annual appropriation.
8Opting Into/Out of a Single Risk Pool
9- Issuers may elect, for certain plans, to treat enrollees across all individual-market plans offered by the issuer as a single risk pool, rather than separate pools for each plan.
10- For qualified health plans (QHPs), opt-out from the single risk pool would be prohibited beginning in 2026, ensuring QHP enrollees are included in the single risk pool.
11- The structure is designed to centralize risk across an issuer’s individual-market plans, with some flexibility for certain plans to opt out.
12Age-Based Premium Variation
13- Removes the limit on how much certain off-exchange plans can vary premiums by age (for plans that elect to be treated under the new provision).
14- Maintains the existing limit for qualified health plans: adult premium rates may not vary by more than 3-to-1 in the case of QHPs.
15- Effective for plan years beginning in 2026.
16Integration with Individual Health Coverage Reimbursements
17- Even plans that opt out of the single risk pool can still be treated as eligible for integration with individual health care reimbursement arrangements (I-HCRA/IHCRA) under the policy framework.
18Promotion of High-Value Care: Out-of-Network Cost Treatment
19- Adds a new rule that, if a patient receives services from an out-of-network provider without a contract, the patient may be able to apply those out-of-pocket costs to their deductible or out-of-pocket maximum if specific conditions are met (coverage exists for the item/service, and charges are within defined lower-cost thresholds).
20Disclosure of Lower Prices (Out-of-Network and Price Transparency)
21- Requires plans to disclose, for each item or service, the lowest allowed charge and the 25th percentile of charges in the state, relative to what the plan would recognize for in-network providers.
22- These disclosures apply to all individuals enrolled in the plan.
23- Adds enforcement: harmed individuals can pursue injunctive relief and damages in federal court, seeking remedies aligned with state-law damages.
24Disclosure of Lower Prices by Providers
25- A new price-disclosure requirement for providers/facilities to inform patients about potential cost-sharing that would be higher or lower than the charge for uninsured individuals.
26Effective Dates
27- Most provisions take effect for plan years beginning on or after January 1, 2026.
28- The reinsurance program operates for 2026–2030, with annual funding limits.

Impact Areas

Primary group/area affected- Off-exchange individual-market enrollees and the health insurers offering off-exchange plans; issuers’ decisions about risk-pool structure and age-rating will directly affect premiums and plan design.Secondary group/area affected- Qualified Health Plans (QHPs) and their enrollees (due to mandated single risk pool participation and maintained age-rating limits for QHPs).- Employers and employees who sponsor or enroll in off-exchange plans, since premium costs and plan terms can influence coverage choices.- Health care providers and facilities (price-disclosure requirements and out-of-network cost-sharing rules).Additional impacts- Federal budget: creates a five-year reinsurance funding program with an annual cap, affecting federal outlays.- Market dynamics: shifting risk pooling and pricing flexibility may influence insurer strategies, plan offerings, and competition between on-exchange and off-exchange products.- Consumer protections: stronger price transparency and potential access to lower out-of-network costs; potential for increased consumer recourse through federal court claims for price-harmful practices.

Generated by gpt-5-nano on Nov 18, 2025