New NAIC group wades into the skyrocketing cost of health insurance

A new National Association of Insurance Commissioners working group aims to identify policy solutions to rising health care costs and insurance premiums, intending to produce a practical guide for state policymakers by the end of the year.

The Health Care Affordability and Mitigation Working Group met for the first time last week. Members discussed a 2026 work plan, outlining a fast-paced schedule to develop affordability recommendations for regulators and lawmakers.

The initiative will focus on examining factors that drive health care costs and insurance premiums, including expenses within the health system that ultimately flow into insurance pricing.

‘Focus on solutions’

Kate Harris, chief deputy commissioner of the Colorado Division of Insurance, is chairing the working group.

“We really want to focus on solutions,” Harris said. “We’re all pretty familiar with what some of the issues are in the market right now, but we’d really urge this group to be thinking through, what are solutions that you’ve seen work well in your state?”

Regulators said the group will study cost drivers such as hospital prices, prescription drug spending and benefit design, while also highlighting policy approaches states have used to address affordability.

Rather than producing a lengthy white paper, the group is considering a collection of shorter briefs outlining individual policy solutions. The document would serve as a practical resource for state policymakers exploring ways to lower health coverage costs.

“I think in the short term, we’ll need to really listen to good ideas, whether it’s about benefits, whether it’s about inputs,” said Kevin Beagan, deputy commissioner of the Health Care Access Bureau at the Massachusetts Division of Insurance. “I think we’ll definitely use the experience of the individual states to really look at things.”

The working group is sure to discuss the Colorado Option in Harris’s home state. A state-governed program, Colorado Option requires all private health insurance companies to offer standardized health benefit plans in the individual and small group markets.

While it is often called a “public option,” the plans are still sold and managed by private insurers—such as Anthem and Kaiser Permanente—rather than the government.

Health insurance costs have surged at their fastest pace in over 15 years as of early 2026, driven by a combination of high-priced medical innovations, rising provider costs, and major federal policy shifts.

Drug costs continue to rise

Beagan noted that prescription drug spending continues to rise as a share of health care costs.

“It used to be around 22% of total costs, and now it’s over 25%,” he said, adding that the group may draw on research from other NAIC efforts focused on pharmaceutical spending.

Martin Swanson is the deputy director and general counsel for the Nebraska Department of Insurance. He noted that hospitals do a lot of complaining about their profit margins yet seem to keep building new wings.

“How much does it actually cost to do an MRI? How much does it actually cost to go through a CT scan?” Swanson asked. “How much money now are the providers charging because of various other cuts to maybe their income? But how much are being charged on the backs of insurers to make up for that cost?”

Joylynn Fix is the director of life and health for the West Virginia Office of the Insurance Commissioner. Facility fees charged by hospitals are becoming a growing concern in her state, Fix said.

“Facility fees are killing us here,” she said. “People are starting to stop seeking care because of facility fees. So, I’d love to see anything this group can take up with that.”

Under the proposed timeline, the working group hopes to develop an outline by late April, gather feedback in May and begin drafting the document during the summer. A first draft could be released in late summer or early fall, with a final version targeted for the NAIC’s winter national meeting.

Industry groups also signaled interest in contributing to the effort. A representative for AHIP said affordability is the top issue for the organization and that it plans to share research and policy ideas with the working group.

The working group plans to gather additional input from regulators and stakeholders ahead of the NAIC’s spring national meeting in San Diego, where members expect to further refine the list of policy topics and begin shaping the final affordability framework.

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