What Reactive Policymaking Underscores for Healthcare Plan Sponsors

Government involvement in healthcare is both necessary and complex. From funding care for veterans and federal employees to supporting programs like Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP), the government plays a vital role in ensuring access to care for millions of Americans. But for healthcare plan sponsors, this involvement also introduces layers of regulation, oversight, and uncertainty that can significantly impact benefit design and administration.

Beyond funding, the government also acts as a regulator — setting guardrails to protect patients from unsafe treatments, fraudulent practices, and inequitable access. These regulations often stem from constituent concerns raised at local and state levels, prompting lawmakers to act. However, the healthcare system is highly complex, and legislative responses are not always well-informed. As a result, new laws can sometimes create unintended consequences for patients and plan sponsors alike.

A recent example is legislation passed in Arkansas (House Bill 1150) aimed at prohibiting Pharmacy Benefit Manager (PBM) ownership of pharmacies starting in 2026. While the intent of legislators was to address public frustration with PBMs, the law overlooked the role PBMs now play in delivering care — especially in rural areas and for patients requiring specialty medications or home infusions. By restricting PBM operations without providing viable alternatives, the legislation risks disrupting care for vulnerable populations. Certain industry stakeholders argue that a more thoughtful approach might have included subsidies or support for smaller providers to ensure continuity of care.

Legislators in Louisiana have recently introduced and passed similar PBM-focused reforms aimed at lowering drug prices and supporting local pharmacies. House Bill 264, passed and enacted in June 2025, imposes restrictions on specific PBM practices perceived to disadvantage independent pharmacies, potentially reshaping how PBMs operate in the state. Meanwhile, if passed and enacted, House Bill 358 would effectively prohibit PBMs from owning retail pharmacies in Louisiana starting in 2027. While these efforts reflect growing public concern, they also risk unintended consequences — such as pharmacy closures and reduced access to care if not carefully implemented. In response to industry feedback and constituent concerns, lawmakers have temporarily paused the legislation to allow for further committee hearings and public input. This underscores the complexity of healthcare reform and the importance of balancing regulatory intent with practical impact.

This kind of reactive policymaking is becoming more common, and it underscores the importance of proactive planning by plan sponsors. For plan sponsors governed by the Employee Retirement Income Security Act (ERISA), regulatory changes can introduce compliance risks and fiduciary challenges. New rules may affect how benefits are structured, how vendors are selected, and how costs are managed. Staying ahead of these developments is essential to avoid penalties and ensure that plans continue to serve members effectively.

For a deeper look at fiduciary responsibility for plan sponsors and carriers alike, read our recently updated white paper, ‘Disclosure, Transparency, and Fiduciary Responsibility in Healthcare.’

Waiting for regulation to dictate your next move is a risky strategy. At Risk Strategies Consulting, we believe regulation should be the floor — not the ceiling — of what’s done to support patients. By taking a proactive approach, plan sponsors can anticipate and adapt to regulatory changes, design benefits that prioritize patient outcomes, and reduce the likelihood of reactive legislative intervention driven by constituent dissatisfaction. Moreover, by engaging early and strategically, plan sponsors can help shape future legislation, ensuring that policy decisions are informed by real-world expertise and aligned with the needs of patients and providers alike.

Our team of experts help plan sponsors navigate the evolving regulatory landscape with confidence. We provide strategic guidance on compliance and benefit design, insights into emerging legislation and its potential impact, and support in aligning plan goals with patient-centric outcomes. Learn more about Risk Strategies Consulting here.