Rebate pass-through laws and the 30-month runway

Government will not outrun capital.

Lots of attention was paid to the testimony of big insurance executives on Capitol Hill today. Some big statements were made about revenue loss as a result of rebate pass through laws.

It’s a good thing that Congress is taking some action on the misaligned incentives (that they own a pretty big part in creating). It’s good that they’re trying to clamp down on rebates as a model.

But Congress signaled this more than a year ago in the torpedoed bill in December of 2024. The laws forcing pass through rebates take 30 months after enactment to take effect.

Capital has already moved on the signals and the flight from revenue-by-rebate to revenue-by-supply chain extraction will be complete well before these new provisions take effect, if they ever do.

Government will not outrun capital here. Plan sponsors have to lean in and understand their expenses. Make sure you understand how and where you’re spending money, and determine if you’re getting a good value for your dollars.

Only capital can keep up with capital.