Lowering Health Care Costs for Americans Act

Bill Number: S. 3389
Origin Chamber: Senate
Congress: 119th Congress, Session 1
Policy Area: Health
Status: Introduced
Latest Action: 2025-12-09: Read twice and referred to the Committee on Finance.
Last Updated: 2026-01-07T14:00:15Z

AI-Generated Summary

Summary of S. 3389: Lowering Health Care Costs for Americans Act

Purpose

This legislation aims to reduce health care costs for Americans by increasing price transparency across health care providers and plans, reforming premium tax credits and subsidies under the Affordable Care Act (ACA), restricting federal funding for certain services like abortion and gender transition procedures, and streamlining state waivers for innovative health programs. It seeks to empower consumers with better information on costs, limit government spending on specific coverages, and promote competition in the health insurance market.

Key Provisions

The bill is divided into two titles with multiple sections addressing subsidies, enrollment, transparency, and state flexibility.

Title I: General Provisions

Minimum Monthly Premium Payments (Sec. 101): Limits premium tax credit assistance so enrollees pay at least $10–$40 per month based on household income as a percentage of the federal poverty line (e.g., $10 for under 200% of poverty, up to $40 for 400% or more).
Biometric and ID Verification (Sec. 102): Requires government-issued photo ID for adults and other documentation for ACA marketplace enrollment to prevent fraud.
Healthcare Affordability Accounts (Secs. 103–104): Introduces tax-advantaged accounts similar to health savings accounts (HSAs) for premium tax credit recipients from 2027–2031. Premium credits are deposited directly into these accounts, which cannot fund abortion or gender transition procedures (defined in detail, excluding certain medical necessities like disorders of sex development or life-saving treatments).
Extension of Enhanced Premium Credits (Sec. 105): Extends ACA premium subsidies through 2031, raises income eligibility to 700% of poverty for 2027–2031, and phases down enhancements starting in 2028 (20% reduction annually until 80% in 2031).
Restrictions on Abortion Coverage (Secs. 106–107, 110): Prohibits federal funds (including tax credits and cost-sharing reductions) for plans covering abortion (except to save the mother's life or in cases of rape/incest). Requires notices and reporting for such plans; excludes abortion costs from premium calculations for tax credits.
Exclusion of Gender Transition Procedures (Sec. 109): Bars qualified health plans from covering gender transition procedures (a broad list of hormonal/surgical interventions, with exclusions for congenital conditions or emergencies); defines terms like "sex," "male," and "female" based on biological reproductive systems.
Funding for Cost-Sharing Reductions (Sec. 110): Provides permanent funding starting 2026, but withholds it from plans covering non-excepted abortions.
State Innovation Waivers (Sec. 111): Streamlines ACA waiver applications (Section 1332), allows governor certifications instead of new laws, expedites approvals (e.g., 45 days for urgent cases), extends waiver duration to 6 years with renewals, and provides $500 million in 2027 plus $5 billion annually (2028–2030) for reinsurance or invisible high-risk pools to stabilize markets without counting toward budget neutrality.

Title II: Hospital Transparency Requirements

Hospital Price Transparency (Sec. 201): Mandates monthly public disclosure of all standard charges (gross, cash, negotiated rates by payer) for items/services, including shoppable services (at least 300 by 2026, then all). Requires machine-readable formats, attestations, and civil penalties up to $35 per bed per day for noncompliance (escalating for persistent violations).
Lab Test, Imaging, and Ambulatory Surgical Center Transparency (Secs. 202–204): Extends similar disclosure rules starting 2027 to labs, imaging providers, and surgical centers (affiliated with hospitals), covering charges, negotiated rates, and cash prices; includes ancillary services and penalties up to $300 per day.
Health Coverage Transparency (Sec. 205): Requires real-time self-service tools for cost estimates (in-network rates, out-of-network maximums, deductibles); monthly public reporting of rates, historical prices, and claims data in machine-readable files; applies to accountable care organizations; penalties up to $300 per member per day.
Group Health Plan Data Access (Sec. 206): Ensures plans can access claims data, pricing formulas, and fees from providers/administrators without undue delays (e.g., within 15 days); voids restrictive contracts; requires HIPAA-compliant formats and annual attestations.
Oversight of Administrative Providers (Sec. 207): Mandates quarterly disclosures of fees, rebates, and payment data from third-party administrators/pharmacy benefit managers to plans; prohibits gag clauses; civil penalties up to $100,000 per day.
State Preemption (Sec. 208): Federal rules do not override state transparency laws unless they directly conflict.
Explanation of Benefits (Sec. 209): Requires plans/issuers to provide itemized explanations within 45 days of claims, including codes, payments, and cost-sharing (similar to advanced estimates).
Itemized Bills (Sec. 210): Providers/facilities must send itemized bills within 30 days of final payment, detailing services, codes, and prices; bars collection actions without compliance or if bills exceed good faith estimates without justification; penalties up to $10,000 per violation.

Effective dates vary: Many Title I changes start 2026–2027; Title II transparency rules begin 2026–2027. Implementation requires notice-and-comment rulemaking.

Significant Changes to Existing Law

ACA Amendments: Modifies premium tax credits (IRC §36B), enrollment verification (ACA §1411), abortion rules (ACA §1303), qualified plans (ACA §1301), cost-sharing funding (ACA §1402), and state waivers (ACA §1332) to add restrictions, extensions, and flexibility.
Tax Code (IRC): Introduces Healthcare Affordability Accounts under HSAs (§223) with use limits; alters credit calculations and reporting (§6055).
ERISA and PHSA: Enhances data access (§408 ERISA), adds oversight (§726 ERISA, §2799A-11 PHSA), and mandates explanations/bills (§716 ERISA, §2799A-1 PHSA).
Public Health Service Act: Overhauls transparency (§2718 PHSA) with detailed disclosures and enforcement; adds itemized billing (§2799B-10 PHSA).
Voids prior restrictive guidance on waivers; excludes certain procedures from coverage, shifting from current allowances.

Potential Impacts

Government Agencies: Increases workload for HHS, Treasury, and DOL in rulemaking, enforcement (audits, penalties), and funding allocation (e.g., $15.5 billion for state programs 2027–2030). Provides dedicated cost-sharing funds but ties them to coverage restrictions, potentially reducing federal spending on abortions/gender transitions.
Citizens: Improves cost predictability via transparency and tools, potentially lowering out-of-pocket expenses through competition and subsidies (extended to higher incomes). However, restrictions may limit plan options and access to abortion/gender-affirming care, increasing costs for those services; minimum premiums ensure some personal contribution.
International Relations: No direct impacts; focuses on domestic health policy.

Main Stakeholders Affected

Consumers/Individuals: Gain transparency and extended subsidies but face restrictions on covered services and potential plan limitations.
Health Insurers/Plans: Must disclose rates/data, adjust for new accounts/credits, and exclude certain coverages; benefit from state reinsurance to stabilize premiums.
Providers (Hospitals, Labs, Surgical Centers, Imaging): Required to publish detailed prices; face penalties for noncompliance but may see more informed patients.
States: Easier access to waivers/funding for custom programs (e.g., high-risk pools), enhancing market stability.
Federal Agencies (HHS, Treasury, DOL): Oversee implementation, audits, and penalties.
Third-Party Administrators/Pharmacy Benefit Managers: Mandated disclosures increase oversight and liability.
Advocacy Groups: Those focused on reproductive rights or LGBTQ+ health may oppose restrictions; transparency advocates support disclosure rules.

Notable Legal, Constitutional, or Political Implications

Legal: Definitions of "gender transition" and "abortion" could invite challenges under equal protection or due process (14th Amendment), especially exclusions from qualified plans. Enhanced enforcement (penalties, attestations) strengthens compliance but may lead to litigation over "materiality" to federal payments. State waivers promote federalism but require budget neutrality, potentially conflicting with spending clause limits.
Constitutional: Restrictions on funding/coverage raise First Amendment (free speech in notices) and substantive due process concerns for bodily autonomy; biological sex definitions may conflict with evolving privacy rights (e.g., Obergefell v. Hodges precedents).
Political: Politically divisive on abortion/gender issues, aligning with conservative priorities (defunding, transparency) while extending subsidies appeals broadly. Could reduce uninsured rates via affordability but spark debates on access equity; expedited waivers empower states, fitting federalist trends but risking uneven implementation across red/blue divides. No broad constitutional overhauls, but transparency mandates promote market-based reforms over regulation.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Marshall, Roger [R-KS]

Recent Actions

2025-12-09: Read twice and referred to the Committee on Finance.
2025-12-09: Introduced in Senate

Bill Versions

Lowering Health Care Costs for Americans Act — issued 2025-12-09 — PDF (148 pages)