The American healthcare system suffers from a severe lack of transparency, competition, choice, and accountability—core parts of any functioning market. While the House of Representatives’ recent bill doesn’t solve every problem, it advances two reforms that begin to shift the balance: reviving Association Health Plans (AHPs) and requiring Pharmacy Benefit Managers (PBMs) report to their customers. These provisions address the problem of limited insurance options and opaque prescription drug supply chains, two critical weaknesses of the current system. By empowering small employers and demanding visibility into drug pricing, the bill would help reintroduce market forces into a healthcare landscape that has long operated without them. These are incremental but meaningful steps toward a competitive and accountable healthcare market.
AHPs are based on the principles of freedom of association and freedom to contract. By allowing small employers independent workers to band together to purchase group health insurance, these plans let them take advantage of economies of scale and risk pooling typically reserved for large corporations. This option can reduce premiums and lower overall costs while preserving protections for individuals with pre-existing conditions.
The Affordable Care Act largely eliminated AHPs by subjecting them to small-group market rules, eroding their cost advantages. The recent House bill would reverse this by allowing employers to form AHPs regardless of industry—provided their association exists for a reason other than solely offering a health plan. This would enable organizations like Chambers of Commerce and trade associations to establish AHPs. These plans would be required to cover all employees of participating businesses and their dependents, and would be prohibited from discriminating based on the health status or pre-existing conditions.
Bringing AHPs back into the market expands options for employers and introduces competition into a stagnant insurance system. That competition can put downward pressure on prices and improve quality of service. Still, AHPs only address the surface level problem of limited plan choice. They do not tackle the deeper issue that health insurance continues to function as a pre-payment mechanism for routine care rather than as a true insurance for catastrophic and unforeseen events. To be effective, AHPs should be paired with reforms like Health Savings Accounts and low-cost catastrophic coverage that encourage saving for everyday care while protecting against major risks.
Unlike AHPs, PBM reporting requirements would be entirely new—and long overdue. The bill would mandate that PBMs submit reports to group health plans every six months or sooner if requested. For larger employers, these reports would need to include detailed information on drugs acquisitions, such as the type of pharmacy dispensing each drug and how many brand-name and generic prescriptions were filled. PBMs would also need to disclose wholesale prices, savings from rebates or discounts, how much of those savings were passed through to insurers and patients, and more.
Additionally, PBMs must explain why specific drugs are prioritized over therapeutic alternatives—especially for drugs costing over $10,000 annually or among the top 50 in health plan spending. They must also disclose information on affiliated pharmacies, including whether patients are steered toward them and how much drug volume flows through their affiliated verses independent pharmacies.
Congress has repeatedly failed to act on PBMs, allowing the market to become an black box where insurers have no real understanding of the products they are buying. Insurers remain in the dark about how PBMs prioritize medications, direct patients to specific pharmacies, or distribute savings from manufacturer rebates. Yet they are expected to choose between PBMs without this essential knowledge.
Market competition cannot function without transparency. PBMs must to report provide clear, relevant data on costs, drug access, and pharmacy arrangements so insurers and patients can make informed decisions.
Reintroducing AHPs and forcing PBMs to disclose how they operate won’t fix the healthcare system overnight, but they represent a tangible shift toward restoring consumer power and market discipline. AHPs give small businesses and self-employed individuals a path to affordable coverage without sacrificing protections, while PBM transparency shines much needed light into one of the most complex and influential sectors of healthcare. Real market competition requires that buyers understand what they are purchasing and sellers compete on value. Congress should build on this momentum—because until price signals and choice return to healthcare, affordability and quality will remain out of reach.
Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization that advocates for consumers through evidence-based analysis and data. Visit www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.