New Health Options Act Aims to Lower Premiums, But With a Catch for Older Americans

The "New Health Options Act of 2025" (SEC. 1) is pitching some big changes to health insurance. The main idea? To bring down those monthly premiums that are eating up everyone's budgets. It does this by creating a Reinsurance Program (SEC. 2). Think of it as insurance for insurance companies. The government steps in to help cover really expensive claims, which should mean lower premiums for the rest of us. They're throwing in $50 per person enrolled, up to a hefty $6 billion a year, from 2026 to 2030.

Reinsurance: The Good and the Not-So-Good

This reinsurance program (SEC. 2) is where things get interesting, and not necessarily in a good way for everyone. The government will cover 90% of an individual's medical costs between $110,000 and $300,000 (for 2026, these numbers might change). That's great if you have catastrophic medical bills. But here's the catch: Insurance companies can opt out of the existing "single risk pool." Normally, that pool lumps everyone together, spreading the risk (and cost). If insurers opt out, they create a separate pool, and all their plans go in there.

• Example: Imagine a small business owner, Sarah, who has a chronic condition. If her insurer opts out, she might end up in a pool with other high-cost individuals, potentially driving up her premiums.

And here's another kicker: for plans that opt out, there are no limits on how much premiums can vary based on age (SEC. 2). Normally, it's capped at a 3:1 ratio. This could mean significantly higher premiums for older folks, even if they're healthy.

Out-of-Network, But Still Counting?

On the brighter side, the bill has a "high-value care" provision (SEC. 3). Basically, if you go out-of-network for a service that's covered by your plan, and the cost is lower than what your plan usually pays in-network (or lower than the 25th percentile of charges in your state), that money can count towards your deductible or out-of-pocket maximum. This is a win for finding more affordable options, even outside your network.

• Example: John needs an MRI. His plan covers it, but the in-network cost is high. He finds an out-of-network provider that charges less than the lowest in-network price his plan pays. That out-of-network cost now counts towards John's deductible.

To make this work, insurance companies have to tell you the lowest in-network price and the 25th percentile charge for services (SEC. 3). That's some much-needed transparency.

Know the Real Price

Another win for transparency: Starting January 1, 2026, healthcare providers and facilities must tell you if your out-of-pocket cost under your plan is higher than what you'd pay without insurance (SEC. 4). If they don't, and you're harmed by it, you can actually sue them (SEC. 4). This is about empowering patients to make informed choices.

The Bottom Line

This bill is a mixed bag. While the reinsurance program and out-of-network provisions could help lower costs and increase choice for some, the opt-out for insurers and the removal of age-based premium limits raise serious concerns, especially for older Americans and those with pre-existing conditions. The transparency requirements are a step in the right direction, but the real-world impact hinges on how insurance companies choose to play the game. The Secretary of Health and Human Services has 120 days from enactment to set the initial rules for 2026 (SEC. 2), so the devil will be in those details.