New Act Bans Secret Contract Rules That Block Insurers From Offering You Cheaper Care

The “Healthy Competition for Better Care Act” is designed to tackle a problem most people don't even know exists: hidden contract clauses between big hospitals and insurance companies that basically make healthcare more expensive for everyone. This bill amends three major federal health laws—the Public Health Service Act, ERISA, and the Internal Revenue Code—to ban specific anticompetitive terms. The goal is straightforward: give health plans the freedom to push patients toward better-value providers, which ideally should lower costs and improve quality. The new rules apply to contracts entered into or renewed 18 months after the law is enacted, following a one-year window for federal agencies to write the necessary regulations.

The End of Anti-Steering Clauses

Think of your health plan as a GPS trying to find the fastest, cheapest route to your destination. Right now, many large hospital systems have contracts with insurers that act like a roadblock, preventing that GPS from telling you about the provider down the street who charges half the price for the same service. This bill bans those contract terms that restrict an insurer from directing patients to other providers or offering you incentives—like a lower copay—to use a specific, high-quality, low-cost facility. If you’re a busy parent trying to schedule an MRI, this means your insurer could finally nudge you toward the imaging center with the best rating and the lowest price, instead of being contractually obligated to pretend it doesn’t exist. This is the biggest win for consumers in the bill, as it forces plans to use their market power to find you value.

Untangling the Affiliate Bundle

Another major target is the practice of contractual bundling, often used by large provider networks. Let's say a major hospital system, the “Covered Entity,” has a contract with your health plan. This bill prohibits that contract from forcing the health plan to also agree to the same payment rates or terms for all of the Covered Entity's affiliates—like their outpatient clinics or surgical centers—even if those affiliates weren't part of the original negotiation. This prevents the hospital from using the leverage of its main facility to artificially inflate prices across its entire network. It also bans terms that restrict other health plans from paying a lower rate for services than the rate paid by your plan. Essentially, it stops large providers from using one contract to set a high, rigid price floor across the entire market.

Who Gets a Pass?

While the bill aims to maximize competition, it carves out a few significant exceptions. If your health plan is a classic Health Maintenance Organization (HMO) that operates primarily through exclusive contracts with multi-specialty physician groups, the anti-steering rules don't apply. More importantly, the rules don't apply to specific “value-based network arrangements,” such as Accountable Care Organizations (ACOs), Centers of Excellence, or exclusive provider networks. This is where the rubber meets the road. These arrangements are often designed to reward quality and efficiency, and the bill doesn't want to disrupt them. However, the Secretary of Health and Human Services is given the power to determine what other “similar arrangements” qualify for this exception. This discretionary power is a point to watch, as it means the Secretary could potentially exempt arrangements that look like value-based care on paper but still limit competition in practice.