The Grand Bargain: Healthcare Market Liberation and Solvency Act (HMLS Act)

The Grand Bargain: Healthcare Market Liberation and Solvency Act (HMLS Act) 🏛️

The Challenge: Hidden Costs & Regressive Subsidies

The U.S. healthcare system suffers from two fundamental flaws that drive inflation and limit worker mobility:

- The $300 Billion+ Tax Loophole: The Employer-Sponsored Insurance (ESI) tax exclusion is the single largest tax expenditure. It primarily benefits high-wage earners and shields more than 100 percent of healthcare spending from consumer price sensitivity—fueling inflation.

- The Supply Monopoly: Anti-competitive state regulations (such as Certificate of Need laws) and opaque supply chains prevent new, lower-cost providers from entering the market—locking in high prices.

The Grand Bargain: A Budget-Neutral, Pro-Worker Reform

The HMLS Act solves both problems simultaneously: it cuts healthcare costs through aggressive competition while funding the transition and empowering the worker.

- Title I — The Tax Shift: Recaptures the ESI subsidy and transfers it as cash to the worker. Fiscal / Political Win: Stabilizes FICA trust funds with more than $100 billion in new payroll-tax revenue.

- Title II — Competition & Transparency: Mandates price transparency and creates national insurance markets. Fiscal / Political Win: Drives prices down toward the true cost of care, yielding $200 billion+ in public savings.

- Title III — Regulatory Reset: Abolishes monopoly-protecting regulations such as CON laws. Fiscal / Political Win: Unleashes new clinics and ambulatory centers needed for competition to thrive.

- Title IV — Medicare Solvency: Eliminates the Part B premium for all seniors and secures Medicare’s long-term future. Fiscal / Political Win: Delivers about $2,220 in annual savings per senior and mandatory state-budget relief.

Title I: Empowering the American Worker

Ends the largest tax loophole and gives the money back to the people who earned it—finally severing healthcare from employment.

- Abolish ESI Tax Exclusion: Repeals the federal income- and payroll-tax exemption for employer-paid premiums, ending the regressive subsidy.

- Mandate Non-Taxable Health Stipends: Employers must convert the dollar value of the old premium into a non-taxable health stipend paid directly to the employee. Worker Benefit: Puts thousands of tax-advantaged dollars under the worker’s control (stipend is income-tax-free but FICA-taxable, strengthening FICA trust funds).

- Require Catastrophic Coverage: Workers must use the stipend to purchase at least a federally defined catastrophic-coverage plan so no one is bankrupted by a major medical event.

Title II: Driving Prices to Cost (“The Transparency Hammer”)

Forces the entire healthcare industry—from providers to middlemen—to compete openly, ensuring the worker’s new stipend buys better, cheaper care.

- National Insurance Market Access: Allows insurance plans to be sold across state lines under a uniform federal standard—eliminating state cartels and forcing competition on price and quality.

- Mandatory Real-Time Price Transparency: Hospitals, clinics, labs, and all providers must publish real-time, cash-based prices for every service—empowering consumers to shop for care and driving prices toward true cost.

- Anti-Secrecy Rules: Pharmacy Benefit Managers (PBMs) and Group Purchasing Organizations (GPOs) are barred from using secret rebates, contracts, or proprietary pricing that inflate drug and supply costs.

Title III: Removing Regulatory Roadblocks

Dismantles the bureaucratic barriers that protect incumbents and opens the door for lower-cost supply to meet new competitive demand.

- Abolition of Certificate of Need (CON) Laws: Repealed nationwide as a condition of receiving Medicare / Medicaid funding—immediately allowing independent surgical centers, specialty clinics, and other providers to open without permission from incumbent hospitals.

- Streamlined Co-Op / AHP Rules: Simplifies capital requirements for non-profit Consumer-Operated and Oriented Plans (CO-OPs) and national Association Health Plans (AHPs), encouraging efficient, member-owned alternatives to challenge large insurers.

Title IV: Medicare Premium Elimination & Solvency

Sec. 401 — Part B Premium Elimination Mandate

(a) Eliminates the standard Medicare Part B monthly premium (currently about $185) to $0 for all beneficiaries subject to the standard rate, effective January 1 of the year after enactment.

(b) Saves the average senior about $185 per month / $2,220 per year by removing a $153 billion national burden.

Sec. 402 — State Budget Relief & Cost Coverage

(a) Covers the $153 billion cost entirely through this Act:

• ≈ $100 billion in new FICA revenue (Title I) covers two-thirds of the cost.

• The remaining ≈ $53 billion is drawn from a small share of the $200 billion+ savings generated under Title II.

(b) Relieves states of paying Part B premiums for dually eligible beneficiaries (e.g., QMBs), yielding hundreds of millions in guaranteed annual state-budget relief.

Sec. 403 — Solvency & Surplus Reinvestment

(a) Generates a net fiscal surplus estimated at $147 billion+ annually (≈ $300 billion total savings & revenue minus $153 billion premium cost).

(b) Mandates that all surplus be used to:

• Extend the solvency of the Medicare Hospital Insurance Trust Fund by at least 25 years.

• Expand standard Medicare benefits—adding comprehensive dental, vision, and hearing coverage.

The Bottom Line: A Truly Grand Bargain

- Before HMLS: Costs hidden; workers job-locked; >$300 billion lost yearly to a regressive loophole; supply controlled by monopolies and bureaucracy.

- After HMLS: Prices transparent; workers mobile and empowered; FICA funds stabilized without new income taxes; open national competition; seniors pay $0 for Part B; Medicare secure and modernized.

The HMLS Act is the only comprehensive reform that simultaneously delivers true cost reduction, fiscal solvency, and worker empowerment in a single, self-funding legislative package.

APPENDIX A – STATE BARRIERS TO COMPETITION: REPEAL & PRE-EMPTION FRAMEWORK

HMLS Act – Appendix A

HMLS Act – Appendix A: State Barriers to Competition – Repeal & Pre-emption Framework

Sec. A-101. Purpose

To eliminate structural barriers that suppress healthcare supply, inflate prices, and reduce service quality; to ensure fair competition and patient choice; and to align federal participation in Medicare and Medicaid with pro-competition standards.

Sec. A-102. Scope

This Appendix applies to all states and territories participating in Medicare and Medicaid and to any provider or payer participating in federally funded health programs.

Sec. A-103. Definitions

1. Certificate of Need (CON): Any statute or regulation requiring state approval based on “need” to establish or expand facilities, services, beds, equipment, or specialized units.

2. Certificate of Public Advantage (COPA): Any state approval granting antitrust immunity to provider mergers or collaborative agreements.

3. Scope-of-Practice (SOP): Statutes/regulations defining the clinical services non-physician providers may furnish.

4. Retail Clinic: Nurse-led or advanced practice provider–led clinic colocated with a retail pharmacy or similar venue.

5. Association Health Plan (AHP)/Co-Op: A pooled risk plan organized by a trade, professional, fraternal, or faith association, or a consumer-owned plan.

6. Health-Stipend Clearinghouse: An approved entity that receives employer stipend deposits and remits premiums for worker-owned policies.

7. Site-Neutral Service: A service that is clinically equivalent whether performed in a hospital outpatient department or a non-hospital setting.

Sec. A-201. Federal Standards; Pre-emption and Conditions on Funding

(a) Pre-emption. Any state law, regulation, COPA, or policy inconsistent with this Appendix is pre-empted for purposes of Medicare/Medicaid participation and for any entity receiving federal healthcare funds.

(b) Funding Condition. As a condition of receiving federal financial participation under Medicare or Medicaid, each state shall certify compliance with the provisions of this Appendix according to the timeline in Sec. A-501.

(c) No Narrow-Tailoring Evasion. States may not reenact substantially similar restrictions under different labels or via agency guidance.

Sec. A-301. Repeal of Certificate of Need (CON)

(a) Prohibition. States shall repeal all CON requirements for facilities, beds, service lines, imaging, dialysis, surgical centers, birthing centers, and major medical equipment.

(b) Immediate Effect for New Entrants. Upon enactment + 180 days, no CON review shall be required for any new or expanded facility or service.

(c) Incumbent Neutrality. Incumbent providers shall not be granted competitive advantages through grandfathered CON rights post-repeal.

Sec. A-302. Facility Licensing Caps and Moratoria

States shall remove numeric caps or moratoria on ambulatory surgical centers (ASCs), dialysis clinics, imaging centers, birthing centers, rehab beds, and long-term care beds, replacing them with health-and-safety-only licensure standards.

Sec. A-303. Scope-of-Practice Modernization

(a) States shall permit full practice authority for Nurse Practitioners and Physician Assistants consistent with national certification and training, including authority to diagnose, treat, and prescribe without mandatory physician supervision in primary and urgent care.

(b) States shall authorize dental therapists, pharmacist clinical services (test-to-treat, chronic medication management), and optometrist therapeutic privileges in accordance with evidence-based training standards.

(c) States shall permit direct-access physical therapy without physician referral.

Sec. A-304. Telehealth and Cross-Border Care

(a) Reciprocity. A clinician licensed and in good standing in any U.S. jurisdiction may deliver telehealth services across state lines to patients located in any other state.

(b) Parity. States shall allow e-prescribing consistent with federal law and shall not mandate an initial in-person visit if clinically unnecessary.

(c) Site of Service. For telehealth, the site of service is the clinician’s license jurisdiction for licensing and the patient’s location for consumer protections and emergency recourse.

Sec. A-305. COPA (Certificate of Public Advantage) Sunsets

(a) Sunset. All COPA approvals shall automatically sunset within 24 months of enactment unless the state demonstrates that prices and quality outcomes under the COPA equal or outperform independent market benchmarks.

(b) No Antitrust Immunity Renewal absent such demonstration and federal concurrence.

Sec. A-306. Retail Clinics, Mobile Units, and Pop-Ups

States shall permit retail clinics, mobile diagnostic/urgent-care units, and time-limited pop-up clinics that meet health-and-safety standards, with no proximity restrictions to incumbent hospitals or exclusive-service zones.

Sec. A-307. Pharmacy, Lab, and Imaging Access

States shall streamline permits for independent compounding pharmacies, specialty labs, and independent imaging centers; exclusive contracting by hospital systems with payers or PBMs that forecloses independent access is prohibited.

Sec. A-308. Association Health Plans (AHPs) and Co-Ops

(a) States shall not impose capital or benefit-mandate requirements on AHPs/Co-Ops beyond solvency standards applied to comparable insurers.

(b) National AHPs/Co-Ops may operate across state lines subject to federal solvency and consumer-protection rules.

Sec. A-309. Price Transparency and Facility Fees

(a) Mandatory Real-Time Cash Prices. Hospitals, clinics, labs, and imaging centers shall post machine-readable and consumer-readable cash prices for all shoppable services and bundles.

(b) Facility Fee Disclosure. Providers shall disclose any facility fee in advance of scheduling; surprise facility fees are prohibited.

(c) Site-Neutrality. For clinically equivalent services, payers receiving federal funds shall apply site-neutral payment policies.

Sec. A-401. Enforcement; Private Right of Action

(a) Federal Oversight. The Secretaries of HHS and Treasury shall condition federal program participation on state compliance; non-compliant states are subject to graduated withholdings as specified in Sec. A-701.

(b) Private Right. Patients, independent providers, plans, and employers may bring civil actions for injunctive relief and damages against state agencies or market actors enforcing pre-empted barriers. Prevailing parties may recover reasonable attorneys’ fees.

Sec. A-501. Phased Implementation Timeline

- T+0–6 months: Immediate pre-emption of new CON reviews; telehealth reciprocity in force; transparency and facility-fee disclosure live.

- T+6–12 months: Full repeal of CON statutes/regulations; removal of licensing caps/moratoria; enable retail clinics/mobile units; open permits for labs/imaging/pharmacies.

- T+12–24 months: SOP modernization enacted; AHP/Co-Op streamlining complete; COPA sunset review begins.

- T+24 months: COPA sunsetting finalized; site-neutral payment fully implemented for federally funded programs.

Sec. A-601. Waivers and Safe Harbors (Narrow)

(a) Temporary Capacity Waiver. States may request a time-limited (≤12 months) waiver for specific safety-critical capacity adjustments (e.g., trauma center designation) with objective metrics; no economic-protection rationale permitted.

(b) Rural Access Safe Harbor. States may offer targeted grants or loan guarantees to rural entrants; such programs must be provider-neutral and competitively awarded.

Sec. A-602. Data, Reporting, and Market Scorecard

(a) Quarterly Market Scorecard published by an independent actuarial/statistical office: median cash prices, wait times, market concentration indices, telehealth utilization.

(b) Public Dashboard. All datasets and methodologies shall be public and downloadable.

Sec. A-603. Non-Discrimination; Level Playing Field

States and payers may not favor hospital-owned over independent facilities, or vice versa. All entities meeting health-and-safety standards shall have equal opportunity to enter and contract.

Sec. A-701. Remedies for Non-Compliance

(a) Graduated Withholding. For non-compliant states, HHS shall withhold administrative match funds up to 5% in Year 1, 10% in Year 2, and 15% thereafter until certification of compliance.

(b) Provider Relief Carve-Out. Withholdings shall avoid reductions to direct patient services by prioritizing administrative funds; HHS shall report any unavoidable service impact to Congress within 30 days.

Sec. A-801. Severability

If any provision of this Appendix is held invalid, the remainder shall not be affected.

Explanatory Note (non-codified)

This Appendix aims to open supply (repeal CON/caps, allow retail/mobile, modernize SOP), enable cross-state competition (telehealth reciprocity, AHP/Co-Op portability), expose real prices (cash transparency, facility-fee disclosure, site-neutrality), prevent backsliding (pre-emption + funding conditions + private right of action), and measure results (quarterly scorecard to track price declines, capacity growth, and choice).