6 States Are Rethinking the Law That Makes Hospitals Ask Permission to Compete
In Weaverville, North Carolina, a hospital the community needed finally broke ground this year. It had already won approval from the state. Then it spent 3 years in a court fight before anyone could pour concrete.
That approval has a name. It's called a certificate of need. In more than 30 states plus Washington, DC, a hospital or clinic has to prove to state regulators that a community needs a new service before it can build one. Some of these laws reach all the way down to a single imaging machine.
Think about what that means in practice. The people best positioned to argue that a town doesn't need a new hospital are the people who already own the existing one.
Now Washington is putting money on the table. The Trump administration told states it would score their applications for the $50 billion Rural Health Transformation Program higher if they loosen or end certificate-of-need rules. As KFF Health News detailed in a recent report, 6 states have signaled they will revisit them. Tennessee passed a bipartisan bill in April to unwind most of its remaining rules over 4 years. Alaska, Connecticut, Delaware, Iowa, and Mississippi say they will consider scaling theirs back. South Carolina already voted in 2023, and in January it stops requiring a state permit for new hospital construction.
This isn't a red state idea or a blue state one. A South Carolina state senator put it well back in 2021: "If there's an issue where you can have President Obama and President Trump in agreement on something, that tells you the idea probably has some merit."
The laws were originally sold as a way to prevent redundant building and hold down spending. Critics point to what happened instead: higher prices, multi-year court delays, and rural patients driving hours for equipment the city hospital kept to itself.
Now the honest part, because the counterargument deserves a fair hearing.
A rural hospital CEO in Tennessee warned that without the law, big chains will cherry-pick growing suburbs with privately insured patients and leave struggling rural hospitals behind. A month after his letter, HCA, the largest hospital company in the country, applied to build a hospital 20 minutes from his. Another independent system in the region, Williamson Health, cited the changing rules when it agreed this year to sell to Ascension St. Thomas in a $900 million deal. And a state health policy researcher noted to KFF that once certificate-of-need oversight disappears, states often lose visibility into ownership changes, including when private equity buys up local facilities.
Repealing a permit law doesn't magically fill a county with independent community hospitals. Sometimes the biggest bulldozer in the state shows up first.
Still, after years on the physician side of the table, one lesson holds up everywhere: laws that require an incumbent's permission to open a door rarely protect the patient. They protect whoever got the license first.
Direct primary care practices mostly live outside this regulatory trench warfare. When a family doctor wants to open a membership clinic, she signs a lease, buys an exam table, and posts her monthly fee. Nobody holds a three-year administrative hearing to decide whether her town is allowed to have another stethoscope. If she takes good care of people, her panel fills. If she doesn't, patients walk. That is the only certificate of need that ever worked.
The answer to hospital consolidation isn't a state permit board. It's lower barriers for independent medicine: more small clinics, more posted cash prices for labs and imaging, and more doctors who answer to the families in their waiting room instead of a regional health system.
Every town needs a hospital when a tractor rolls or a heart artery closes at 2 a.m. How many clinics and beds a community supports, though, should be decided by the people who live there, not by the competitor down the highway.
6 states are reconsidering the permit requirement. Watch what gets built next, and who gets to build it.
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$28,303 for a Family Plan. One Alabama Screen Maker Held Its Health Costs Flat.
$28,303.
That's what the average family health plan through work costs this year in KFF's new annual employer survey. It went up 5%, or $1,310, in a year when wages rose 3.7%.
The worker's share went up faster. Families now pay $7,471 a year out of their paychecks toward the premium, up 9%. At companies with fewer than 200 workers, it's $9,687. Those same small-company workers face an average single deductible of $2,624 before the plan pays for most things.
So the paycheck shrinks first, then the deductible stands in the doorway.
And there's no relief coming. Aon projects employers could pay 9.5% more next year. Marsh says 8.2%, the biggest jump since 2003. Among large employers, 44% said they handled this year's increase by shifting more of the premium onto workers. Others raised deductibles, switched insurers, added prior authorization, or narrowed the list of doctors people could see.
Read that list again. Every item is a way to make care harder to use. None of them makes care cheaper to deliver.
Elizabeth Mitchell, who runs the Purchaser Business Group on Health, put it plainly: "The industry is doing absolutely nothing to control costs." She asked why employers, the customers, are the ones being asked what they're doing about it.
Fair question. Here's one employer's answer.
Phifer Inc., in Tuscaloosa, Alabama, makes insect screens and woven outdoor fabric. Its health costs stayed flat this year. Russell DuBose, its vice president of human resources, credits a few years of focus on zero-cost primary care for workers, through on-site clinics and direct contracts with doctors' offices. People get in quickly. Problems get caught early. The company contracts directly with some specialists too, and steers people toward the best ones it can find. "When we do that, we're paying a more reasonable price," he said.
Phifer is self-insured. It pays its own claims and buys stop-loss insurance for the very big bills, and DuBose says that coverage has gotten more expensive too. Nobody at Phifer pretends major hospital bills disappear. They just stopped running routine primary care through the most expensive billing pipe in the building.
We've watched the same dynamic for years at AtlasMD. When a worker can text her doctor about a sinus infection on Tuesday, she doesn't spend Saturday in an urgent care waiting room. When labs are a few dollars and generic meds are dispensed near wholesale, nobody skips a blood pressure refill to make the car payment. Primary care is the cheapest line item in medicine, and traditional benefit design makes it the hardest door to walk through.
Only 7% of companies in KFF's survey have an on-site clinic. You don't need one. A small business with 12 employees can't build a clinic next to the break room, but it can fund a direct primary care membership with a doctor down the street for a flat monthly fee and pair it with catastrophic coverage for major claims.
DuBose says other employers call him all the time now, nervous. "The worry is 'Could the rising cost of healthcare be the next job killer?'" he said.
During open enrollment, most workers see a bigger deduction on their pay stub and a higher deductible on their card. If you run a business, before you sign the renewal, ask your broker what Phifer asked: what happens if our people can just see their doctor?
$28,303 is what happens when you run oil changes through the auto insurer. Phifer just stopped doing it.
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12% to 64%: What Happened When Oregon Hospitals Had to Offer Help Before Sending the Bill
Most hospital financial aid works the same way across America. The discount exists on paper, tucked behind an application form on page 4 of the billing portal, and the patient who just came home from an emergency appendectomy has to know to ask for it, find the form, and prove she qualifies before the bill goes to collections.
Oregon tried something different. A state law that took effect in July 2024 told hospitals to skip the application for nearly everyone. Screen patients automatically. Apply any aid they qualify for before the bill goes out. Then tell them.
Tradeoffs and KFF Health News looked at the first year of data, and the numbers are hard to ignore.
At Oregon Health & Science University, the share of patients getting financial assistance jumped from 12% to 64% in the early months of the law. Across roughly two-thirds of the state's hospitals with federal data, spending on free and discounted care more than doubled in the first full year. As a share of operating expenses, it rose from 1.4% to 2.7%.
The eligibility rules didn't suddenly turn generous. The paperwork disappeared.
Here's the detail that should stop every insured family in its tracks. Some of the biggest beneficiaries were people who already had health insurance. OHSU's financial aid for insured patients reached about $39 million in the first year, roughly 5 times what it had been before. Prior to the law, the hospital's own former chief financial officer noted, insured patients rarely applied for charity care. They assumed insurance meant they didn't qualify, so they put their $2,000 or $5,000 deductible on a credit card and paid it off a little at a time. Automatic screening wiped out or shrank what many of those insured families owed.
When the price is opaque and the relief requires a form, the billing department keeps whatever the patient doesn't know to ask for.
Then came the pushback. OHSU spent about $64 million on free and discounted care that first year, around 1% of its operating costs. "It is a good thing, but it is an expensive thing," the former CFO said. Hospitals lobbied the legislature, and in April lawmakers dialed the rule back. Insured patients are now screened automatically only if they owe more than $1,500 for a single visit or stay, up from $500. Patients with smaller balances are back to filling out an application.
The chairman of the Oregon House health committee put the trade-off in plain English: "I've got to make it more expensive for someone to get healthcare so that the hospitals can stay in business. What a country."
Hospitals have real payrolls and real margins to protect, especially in smaller communities. Still, consider what that legislative bargain admits. Financial assistance was only affordable for the system as long as four out of five eligible patients never found the form.
Direct primary care starts from the opposite premise. You shouldn't need a state mandate or a stack of tax returns to pay a fair price at the doctor's office. At AtlasMD our prices are posted on the wall. The monthly membership is the same flat number every month, labs cost a few dollars, and generic medications are dispensed near wholesale. There is no charity-care application because there is no inflated chargemaster price to discount.
A primary care membership won't erase a surgical bill after an appendectomy; you still want catastrophic coverage for the hospital. What it does is keep your everyday visits, blood work, and prescriptions out of the hospital billing machine altogether. And when you do end up in an inpatient bed, you have a physician in your corner who knows to tell you: ask for the financial screening before you write the check.
Oregon proved something simple. When you take away the paperwork barrier, 64% of eligible patients get the help they were promised on paper all along.
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16 Medications From Multiple Doctors, and No "Unicorn Pharmacist" Checking the List
Jonathan Bledsoe, a Marine veteran from Reading, Pennsylvania, took one prescription for his mood and one for his cholesterol, among a handful of others, for nearly 3 years.
Then one morning his urine came out "the color of fresh brewed coffee."
The 2 drugs were interacting and starting to damage his liver. He'd had multiple doctors. None of them caught it until he brought the symptom back himself. After he changed medications, his liver and kidney function returned to normal.
"You wouldn't think you would have to be your own advocate," he told KFF Health News.
You do. That's the problem.
The share of Americans over 65 taking 5 or more medications nearly doubled from 2000 to 2020. Today more than a third of older adults take 5 or more a day. Amanda Mixon, a hospitalist at Vanderbilt University, says she sees older patients averaging 16 medications, often from multiple prescribers and pharmacies.
Each prescriber may not know what the others ordered, especially when they practice in different health systems with separate electronic charts. Pharmacist DeLon Canterbury put it plainly:
"Do not assume that someone is checking all of these things in the background. There isn't this magical unicorn pharmacist just making sure everything is safe. Yes, even at the local pharmacy."
Then there's the prescribing cascade. A heart failure patient gets a water pill. The water pill causes incontinence. The incontinence gets its own pill. One prescription becomes 3, and nobody stepped back to look at the whole shelf.
Nobody is being careless on purpose. "It's not the intent of our providers to overtreat," Canterbury said. "It's just what we've been trained to do." Fee-for-service medicine pays for adding. It took until this year for Medicare to issue guidance clarifying how doctors and pharmacists can be paid for reviewing medications and helping patients taper off. Before that, physicians weren't sure they could get paid for deprescribing at all, even though untangling a med list takes real time.
Time is the whole thing.
By 78, a patient can easily have a cardiologist, an endocrinologist, a rheumatologist, and a primary care visit that lasts 12 minutes. Nobody owns the list.
A direct care doctor isn't racing a billing clock or waiting for a new Medicare code to justify a 45-minute conversation. There's room to sit down with every bottle on the table, ask what each one is doing, and ask the question a 12-minute slot squeezes out: Do we still need this?
If you're the adult child of an aging parent, do one thing before the next appointment. Write down every prescription, over-the-counter pill, vitamin, and supplement in one place. "Everyone needs a medication list in their pocket," says pharmacist Jen Hammons. A folded piece of paper in the wallet works fine. Then sit down with a doctor who has the time to read it from top to bottom.
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18% Small-Business Renewal Hikes for 2027: The Premium Is Just the Messenger
If you own a small business, you already know what's waiting in the renewal envelope.
North Dakota's Insurance Department just approved 2027 rates. Small-group plans, the kind local employers buy, are going up by average amounts ranging from 9.5% to 18.34%. Sanford Health Plan: 18.34%. Medica: 17.49%. UnitedHealthcare: 11.28%. Blue Cross Blue Shield of North Dakota: 9.5%.
On the individual side, BCBSND plans are up an average of 19%. Medica's are up 13.27%.
This isn't a one-year spike. In 2025, the state-approved average for BCBSND individual plans rose 15.94%, and Sanford's rose 16.5%.
And it isn't just North Dakota. The Commonwealth Fund reports that insurers nationally proposed a median 15% increase for 2027 marketplace plans, after raising premiums by more than 20% in 2026. Those back-to-back double-digit increases are the highest the marketplace has seen since 2018. Some analysts expect medical costs to grow faster in 2027 than in nearly 2 decades.
North Dakota Insurance Commissioner Jon Godfread was blunt about the root cause: "Labor is costing more. Products and services are costing more." He noted that regulators can track almost every dollar inside an insurance company, right up to the moment it leaves to pay hospitals and health systems.
"When you go to the hospital, it's one of the only services where you don't have any idea what that bill is going to be," Godfread said. "We're not going to solve health insurance premiums if we don't solve the health care cost issue."
That's the clearest summary you'll hear from a state regulator. The premium is just the messenger.
If you run a shop with a renewal packet on your desk this month, you have two choices. You can sign the renewal, absorb another 18% hike, and raise the deductible your people have to clear. Or you can change how the benefit is built.
Split the job in 2. Put primary care in a direct care membership: a flat monthly fee, a doctor your team can call or text, same- or next-day visits, and transparent prices on labs and prescriptions. Then pair that membership with a higher-deductible or wrap-around plan built for hospital stays and major events.
Your employees get a physician they can actually reach. You stop paying insurance overhead for strep tests and blood pressure checks.
The Commonwealth Fund warns that workers who "buy down" to higher-deductible plans often end up underinsured and skipping visits. Funding a direct primary care membership alongside the plan closes that exact gap. The deductible stops standing between your team and their doctor.
You can't control what the carriers file with the state. You can control what you buy.
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