SB116 Alabama 2016 Session

Summary

Primary Sponsor

Cam Ward

Republican

Session

Regular Session 2016

Title

Health Insurance Carriers, provide cost information to enrollees, Alabama Right to Shop Act

Summary

The Alabama Right to Shop Act would make costs and pricing for health care services more transparent by requiring providers and plans to share price estimates and offer savings for cheaper out-of-network options.

What This Bill Does

Providers must give patients an estimate of the cost (in-network) or charged amount (out-of-network) upon request, and help them understand out-of-pocket costs. Health benefit plans must run a toll-free line and website to provide cost information and bind a maximum price estimate for proposed services, for both in-network and out-of-network care. If enrollees choose cheaper out-of-network care, plans would pay part of the savings (50% of the saved cost, up to $7,500 per year) and apply cost-sharing rules to such cases, with annual reporting to the Insurance Commissioner.

Who It Affects

• Enrollees/patients who request cost estimates and may receive savings when choosing cheaper out-of-network care.
• Health benefit plans/insurers and participating health care providers who must provide cost information and binding estimates, offer a toll-free line/website, and process savings payments.

Key Provisions

• Creates the Alabama Right to Shop Act to require cost estimates and information for health care services.
• Providers must disclose estimated costs (in-network) or charges (out-of-network) within two working days of request, and explain when an exact amount cannot be quoted.
• Providers may assist patients in using the plan's toll-free number and website to obtain out-of-pocket cost information.
• Plans must establish a toll-free number and website to share cost information and provide a binding estimate for the maximum allowed amount or charge for proposed services, including all applicable fees and potential out-of-pocket costs.
• Plans must ensure enrollees pay no more than the binding estimate for covered benefits, while allowing other disclosed cost-sharing in the certificate of coverage; estimates are labeled as costs and may vary if unforeseen services arise.
• If an enrollee uses a cheaper out-of-network provider, plans must pay 50% of the saved cost (up to $7,500 per plan year; not applied if saved cost is $50 or less) and must pay within 30 days of billing.
• If out-of-network services cost less than the average in-network cost, the enrollee’s share is applied as if the service were in-network.
• Plans must annually report to the Commissioner of Insurance on requests, savings, payments, and participation by enrollees by February 1 each year.
• Effective date: the act becomes law on the first day of the third month after passage/approval.

AI-generated summary using openai/gpt-5-nano on Feb 24, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Health Insurance