By Nadia Stovicek and Kennah Watts
While Indiana lawmakers have been working to reduce health care costs for commercial health insurance for more than a decade, this legislative session was particularly productive. A bevy of health care cost reform bills focused on pricing, transparency, and antitrust issues were enacted, and these efforts were complemented by two executive orders from Governor Mike Braun aimed at reining in hospital market power. With these legislative and executive branch actions, Indiana has embarked on a path to improve health care affordability for Hoosiers and set an example for other states.
Legislative and Administrative Action on Cost Containment in 2025
Indiana had an extraordinary legislative session. Out of ten bills introduced aiming to constrain health care cost growth, the legislature enacted six (see table below). These bills targeted a variety of levers to reduce system wide costs for health insurance, some using novel methods such as::
- HEA 1666 and HEA 1004, which require ownership or financial information reporting from providers, respectively, including information on any private equity affiliation.
- HEA 1004 requires a reference-based price ceiling for any hospital that contracts with an employer health care arrangement, defined as an arrangement between a hospital, hospital system, nonprofit hospital, and narrow network of hospitals.
- SEA 3 requires third-party administrators (TPAs) and pharmacy benefit managers (PBMs) to act as fiduciaries of the health plans with which they contract. The bill defines fiduciary duty to mean operating in the best interest of their clients.
Table. Legislative Action from Indiana’s 125th Legislative Session
| Bill number | Cost containment mechanism(s) | Summary |
| HEA 1003 | Transparency, antitrust | Codifies federal Hospital Price Transparency rule; prohibits PBMs and TPAs from redacting claims data via trade secrets assertion; prohibits anti-tiering and all-or-nothing contract provisions |
| HEA 1004 | Price regulation; financial transparency | Large nonprofit hospitals systems cannot charge more than aggregate average statewide commercial prices or risk losing their state tax exempt status; providers must report on financial and ownership status; payers and TPAs must disclose commission fees; hospitals that contract with employee benefit plans must charge at or below a benchmark of 260 percent of Medicare; TPAs must provide claims data including electronic billing (837s) and provider payments (835s) within 15 business days of an employer request |
| HEA 1666 | Financial and ownership transparency; antitrust | Increases attorney general’s authority to investigate market transactions among health care entities; requires financial and ownership reporting by providers |
| SEA 3 | Fiduciary duty reform | Requires TPAs and PBMs to act as fiduciaries; defines fiduciary duties |
| SEA 119 | Antitrust | Bans applications for certificates of public advantage (COPA) after May 13, 2025 |
| SEA 475 | Antitrust | Bans non-compete agreements between physicians and hospitals or hospital systems, or a parent company of a hospital or an affiliated manager of a hospital |
Governor Braun also issued two related executive orders:
- Executive Order 21 requires the state to assess the effectiveness of price transparency measures and develop a penalty for providers and payers that do not comply with transparency requirements.
- Executive Order 22 requires nonprofit hospitals to annually verify that they provide more in charity care than they receive in state tax breaks; hospitals that do not provide this verification will be denied the tax exemption.
Combined, these efforts mark some of the most significant advances in policies to constrain commercial market cost growth of any state to date. However, these reforms were not enacted overnight—they required years of education, coordination, and advocacy to become law.
How Transparency, Persistence, and Coalition Building Led to Success
Indiana’s extraordinary 2025 legislative session was a product of years of dedicated advocacy to improve transparency and tackle the root cause of higher health care costs. The story can be traced back to the Employers’ Forum of Indiana, a multi-stakeholder coalition created to improve the value employers receive from their investment in health care benefits. When Gloria Sachdev, a former pharmacist, took the helm of the Employers’ Forum in 2015, she posed a simple question to her coalition of mostly self-insured employers, “what’s your biggest pain point?” The answer came swiftly and unanimously: “health care affordability.”
However, employers could not easily identify how much they paid for medical services. With little to no transparency from hospitals and insurers, employers could not effectively push for the right reforms. Sachdev and the Employers’ Forum therefore piloted the Employer Price Transparency Project to help employers and health care purchasers use hospital pricing data to pursue higher-value healthcare. The project began with RAND 1.0, the first publicly available employer price transparency study in the United States that provided prices alongside the names of the individual hospitals. RAND published the study in 2017 with data from Indiana hospitals and prices paid by self-funded employer plans. The study results were shocking: Indiana employers were paying, on average, 272 percent of Medicare rates. For outpatient care, that number jumped to 358 percent of Medicare. Given these results, employers and—importantly—their elected representatives began to take notice and demand reform.
To refine the data and understand Indiana’s cost environment compared to other states, the RAND studies have expanded nationwide. The most recent iteration, RAND 5.1, includes data on hospital prices across 49 states and DC (Maryland is excluded because of its unique all-payer model). With these findings, the Employer Price Transparency Project launched Sage Transparency, a tool to provide employers, policymakers, and advocates easy access to price and quality data. These two tools have become the foundation not just to understand prices, but to challenge them.
The data and dashboard were necessary but alone not enough to cultivate change. The Employers’ Forum collected information about pain points from its leading employer members to help educate policy makers on health care pricing issues and build public support. Inspired by Sachdev’s work, former Indiana Republican Party Chair Al Hubbard launched Hoosiers for Affordable Healthcare, a group dedicated to pushing for legislative reform. Sachdev became the vice chair and soon bipartisan advocacy efforts were underway. The group then built consumer support with a media campaign and a simple message: higher hospital prices mean smaller Hoosier paychecks and inflated premiums.
Spurred by price data and organized advocacy, prior sessions of the Indiana legislature passed bills to ban excess hospital fees, prohibit non-compete clauses for primary care, require merger reporting to the attorney general, and establish a Health Care Cost Oversight Task Force. The process of debating and enacting these bills helped educate lawmakers and the public and set the stage for the successful 2025 legislative session. Other states are also taking notice––Indiana’s strategies to advance cost containment have inspired Texas and Maine to launch their own transparency-driven campaigns.
Looking Forward
The problem of high and rising health care costs are by no means solved in Indiana. Much more remains to be done to deliver real price relief to Indiana employers and consumers. However, the state’s considerable progress can serve as an example to other states of how transparency, educated coalitions, and persistent advocacy can create an environment ripe for policy change that bends the price curve.
The authors thank Dave Kelleher and Sara Otte of the Employers’ Forum of Indiana, as well as Luke Thomas from Hallowell Consulting, for their review and thoughtful comments on this blog post.
