The Center for American Progress's "Patient Bill of Rights" takes aim at health insurers by proposing reform measures that would lower premiums and co-payments and alter the determination and use of prior authorization.

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Another Democrat-leaning initiative dropped last week. The Center for American Progress is calling it a bill of rights for patients. It’s being presented against the backdrop of an affordability crisis in healthcare. For many Americans, significantly rising costs of healthcare, from premiums to patient cost-sharing, are a major financial burden, The Center’s proposal follows a recently released plan dubbed Medicare by Choice, drafted by a coalition of former congressional staffers and federal policymakers. Both concepts aim at reforms within the existing multi-payer healthcare system rather than doing away with it. It appears that some Democrats and policymakers with close ties to the Democratic Party are no longer championing single payer reform.

The Center for American Progress unveiled its plan that focuses on addressing behaviors exhibited by insurers and healthcare providers that can drive up healthcare costs. The ultimate goal is to reduce out-of-pocket expenses and premiums for consumers.

The set of ideas begins with the premise that there’s too much market concentration among insurers and providers such as hospitals. The Center says it supports bipartisan legislation introduced by Senators Hawley (R-Mo.) and Warren (D-Ma.) that would break up large health insurance conglomerates. Health insurers now own pharmacies, pharmacy benefit managers, healthcare provider services and even subsidiary manufacturers. Appealing to prior anti-trust legislation, the Center recommends removing "inherent conflicts of interest and self-dealing,”

Furthermore, the thinktank says that combating “price gouging” from insurers would reduce average premiums by as much as $132 per enrollee annually. Here, target changes concern the Affordable Care Act’s current set of rules on “medical loss ratios.” As presently stipulated, insurers are required to spend 80-85% of their premium revenue on medical care. If they don’t, they’re mandated to return “excess profits” in the form of rebates to beneficiaries enrolled in plans.

But because profits are calculated as a share of premiums, insurers can increase profits by increasing both premiums and their spending on care, rather than by reducing costs. The proposal by the Center seeks to set a hard limit on insurer profits and administrative costs on a per-enrollee basis, rather than as a share of premiums. And it aims to extend the rules to self-insured plans. Additionally, the Center doesn’t want to restrict federal government probes merely to insurers whose premiums increase by 15% or more annually.

In addition, the Center argues that “independent clinical reviews” ought to replace standard prior authorization protocols. Here, prior authorization denotes a process by which patients or prescribing doctors must seek approval from a health insurer before the plan commits to covering a specific medical service, treatment or prescription. What policymakers at the Center envision is requiring coverage decisions by insurers to be backed up solely by evidence-based clinical criteria.

The Center also proposes capping hospital prices, noting that inpatient care takes up 40 cents for each dollar spent in the healthcare system. Hospitals account for the lion’s share of healthcare costs, with a wide variation in pricing across different entities. The Center seeks to reduce excessive variance in hospital spending across the commercial and Medicare sectors by introducing ceiling ratios. It proposes legislation to limit hospital prices in concentrated markets so that prices cannot exceed three times the Medicare rates. Because commercial insurers and employers pay hospitals, on average, about 2.5 times Medicare rates, the suggested cap would focus on outliers.

The Center says that savings from lower hospital costs could be used to lower patients’ deductibles which can have a positive impact on affordability. A deductible is the amount of money patients must spend before insurance kicks in.

It’s noteworthy that the Trump administration is pushing for high-deductible plans, which it says will lower premiums that are also an affordability issue. Implied in the administration’s thinking is a tradeoff between deductibles and premiums. On the other hand, the Center’s plan aims to reduce both premiums and deductibles. How achievable this goal is, remains to be seen.

Together with concepts such as Medicare by Choice, the initiatives being put forward could offer a roadmap for Democrats’ priorities going forward, with midterms looming this year and a presidential election in 2028.