A new healthcare plan released this week by a left-leaning think tank may offer a roadmap for Democrats' priorities in this space as midterms loom later this year.
The Center for American Progress unveiled the plan on Wednesday. It centers on addressing behaviors from both payers and providers that can drive up healthcare costs, with the goal of reducing expenses and premiums for consumers.
The organization is highlighting its proposals as a "bill of rights" for patients, who have faced premium hikes, escalating medical costs and access barriers.
For example, the plan calls for a ban on prior authorization and instead replaces it with independent clinical reviews. This model, CAP said, would continue to manage inappropriate utilization—the stated goal of prior auth and other utilization management approaches—while preventing mass claims denials.
CAP's proposal would require that independent review organizations meet clear standards around conflicts of interest and employ qualified experts. Insurers and reviewers would both commit to submitting requests through secure electronic channels.
"By replacing prior authorization with independent clinical review, evidence-based criteria, real-time clinical decision support and peer benchmarking, CAP expects that utilization will be better managed so that costs do not increase," the group said. "At the same time, the administrative costs of prior authorization would decline significantly."
In addition, the plan would limit "excessive" premium increases, which could lead to a $415 decrease in average premiums for individuals in 14 states and a $1,156 decrease in family employer plan premiums in 11 states.
CAP also says that averting "price gouging" from insurers would reduce average premiums by as much as $132 per enrollee each year, or $6 billion total annually. The main target in this effort is the Affordable Care Act's medical loss ratio (MLR), which has drawn recent ire from lawmakers looking to address rising health costs.
Under the MLR, insurers are required to spend most of their premium revenue on medical care, however critics have charged that larger conglomerates can game the system by owning providers, pharmacies and other delivery sites, keeping the revenue in-house even as they meet MLR thresholds.
To tackle this problem, the plan says legislators should bar pricing markups at sister subsidiaries from increasing premiums. CAP also said it supports bipartisan legislation that would break up large health insurance conglomerates.
"Ultimately, in the same way that the Glass-Steagall Act separated commercial from investment banking, health insurance companies should be prohibited from owning providers, pharmacies and PBMs," CAP said. "This separation is the only way to remove inherent conflicts of interest and self-dealing."
The proposal also notes that the administrative services only, or ASO, market is highly concentrated among three large payers, and the MLR doesn't apply to ASOs or self-insured plans, this sector is ripe for regulation as policymakers seek solutions around costs.
Beyond payer behaviors, the plan also takes aim at outlier hospital prices. CAP says tackling these would reduce employer plan deductibles by half in markets that are very concentrated as well as decrease family premiums in employer plans by $1,308 each year by 2032.
CAP said that research shows hospital costs represent 40% of spending in private insurance plans, and are the main factor driving up insurance costs. Its proposal would cap prices in concentrated regions so that they would not surpass three times the rate paid by Medicare.
Plans would then be required to apply savings generated by this cap to lower members' deductibles, CAP said.
“The system is at a breaking point because mega insurance companies and hospital systems are price gouging families,” said Topher Spiro, senior fellow for Health Policy at the Center for American Progress and co-author of the report, in a press release. “This plan directly cracks down on price gouging and stops insurance company bureaucrats from denying care—the immediate relief Americans are crying out for.”