Premium Transparency Act
- Sponsor
- Rep. Pfluger, August [R-TX-11]
- Committees
- Energy and Commerce Committee (primary)
- Last action
- Jun 25, 2026
Bottom line
The Premium Transparency Act aims to increase consumer access to detailed financial and benefit information from health insurers and Medicare Advantage plans, promoting greater accountability and informed decision-making.
What it actually does
This bill mandates that health insurance issuers and Medicare Advantage (MA) organizations publicly disclose detailed information about their overhead costs, claim payments, and retained premium revenue. It also requires health insurance Exchanges to include this new transparency data in their comparative plan information. Additionally, the bill directs the Secretary of Health and Human Services to issue guidance for plans and issuers to provide standardized, plain English information on benefits and coverage aspects like premiums, deductibles, cost-sharing, and network types.
Proponents argue
Supporters argue that this bill will empower consumers by providing unprecedented transparency into how their premium dollars are spent by health insurers and MA organizations. They contend that making overhead costs, claim payment percentages, and retained revenue publicly available will foster competition, drive down costs, and allow individuals to make more informed choices about their health coverage. The standardized, plain English guidance for benefit information is also seen as crucial for simplifying complex insurance terms.
Opponents contend
Critics may argue that while transparency is a laudable goal, the extensive new reporting and publication requirements could impose significant administrative burdens and costs on health insurance issuers and MA organizations. These increased compliance costs could ultimately be passed on to consumers in the form of higher premiums. Opponents might also contend that the sheer volume of data, even in a 'consumer-friendly format,' could still be overwhelming and not necessarily lead to better consumer decisions.
The bill is short and relatively straightforward, making it accessible for an informed reader to evaluate within a reasonable timeframe.
Section 2(a)
Health Insurer Overhead and Claim Payment Disclosure
This provision amends the Public Health Service Act to require health insurance companies offering group or individual coverage (including grandfathered plans) to publicly disclose, starting January 1, 2027, the percentage of premium revenue spent on claims, quality improvement, and other non-claims costs. They must also explain how quality improvement is calculated and reveal the percentage of premium revenue they retain. This information must be published on the insurer's public website in a consumer-friendly format, at the coverage level and potentially in aggregate.
Supporters argue
Supporters argue this provision is essential for holding health insurers accountable and ensuring that a greater portion of premium dollars goes towards patient care rather than administrative overhead or profits. Increased transparency will allow consumers to compare plans more effectively based on their financial efficiency.
Critics contend
Critics may argue that the detailed reporting requirements could be costly and complex for insurers, potentially leading to higher administrative expenses that are then passed on to consumers through increased premiums. They might also contend that the data, even if 'consumer-friendly,' could be misinterpreted without proper context.
Tradeoffs
The provision balances the public's desire for transparency and accountability from health insurers against the potential for increased administrative costs for the industry, which could ultimately affect premium prices.
Section 2(b)
Medicare Advantage Overhead and Claim Payment Disclosure
This section amends the Social Security Act to impose similar transparency requirements on Medicare Advantage (MA) organizations, starting January 1, 2027. MA plans must submit and publish on their public websites information including total revenue, the amount and percentage of revenue spent on incurred claims, non-claims costs, and the difference between their Medical Loss Ratio (MLR) numerator and denominator (and its percentage of revenue). This data must be presented in a consumer-friendly format at the MA plan level and potentially in aggregate.
Section 3
Enhanced Comparability on Health Insurance Exchanges
This provision amends the Patient Protection and Affordable Care Act to require state and federal health insurance Exchanges to include the newly mandated transparency information (from Section 2718(a)(2) of the Public Health Service Act) as part of their comparative plan information. This applies to qualified health plans offered through an Exchange for plan years beginning on or after January 1, 2029, provided the plan was offered in a previous year.
Section 4
Guidance for Standardized, Plain English Insurance Information
This section directs the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and the Treasury, to issue guidance by January 1, 2028. This guidance will establish standards for group health plans, health insurance issuers, and Medicare Advantage organizations to provide information on benefits and coverage in a standardized, plain English format. The required information includes monthly premiums, annual deductibles, out-of-pocket maximums, provider network types, cost-sharing for various services (e.g., primary care, specialists, emergency, drugs), and additional plan features like wellness programs or HSA eligibility.
These clauses define 'incurred claims' and 'non-claims costs' for Medicare Advantage organizations by referencing specific sections of title 42, Code of Federal Regulations (42 CFR 422.2420(b)(2)-(4) and 422.2401, respectively).
Section 2(b)(A)(ii) and (iii)
Why it matters:This is standard legislative practice to avoid reprinting lengthy regulatory definitions and to ensure consistency with existing administrative frameworks.
Case for: Referencing existing regulations ensures that the new transparency requirements align with established definitions and methodologies already familiar to MA organizations, promoting consistency and reducing the need for new interpretive guidance on these core terms.
Case against: For a casual reader, the reliance on external regulatory citations makes it harder to fully grasp the precise scope of 'incurred claims' and 'non-claims costs' without consulting additional, technical documents.
Estimated impact: Ensures that the financial reporting for Medicare Advantage plans uses established, detailed definitions for key cost categories, impacting how billions of dollars in healthcare spending are categorized and reported.