New Hampshire employers and patients could be facing a perfect storm of healthcare cost increases as lawmakers prepare to vote on a pair of high-stakes mandates that critics warn will send insurance premiums to record highs in 2026.
Senate Bill 256 follows in the footsteps of neighboring Vermont by limiting “white bagging,” a health care distribution model insurers use to control costs, but that hospitals argue can compromise safety.
Under the legislation, an insurance company or specialty pharmacy would face new requirements when sending a medication that must be administered by a clinician directly to an outpatient facility rather than a hospital. The legislation would ban white bagging as the sole method of drug distribution for insurance companies.
The Granite State isn’t the first to consider limiting the practice. Vermont passed similar protections in 2022. Since then, the state has seen premiums reach record highs. For 2024, the Green Mountain Care Board (GMCB)—Vermont’s healthcare regulator—approved rate increases of up to 20 percent for individual premiums and 23 percent for small group premiums for the state’s largest insurers, including Blue Cross Blue Shield of Vermont.
Brown bagging, another cost-saving measure, would be banned entirely. Under the practice, insurance companies or pharmacies ship medications that must be administered by a clinician directly to a patient, who then brings them to an outpatient facility for treatment.
Both measures allow patients to receive care outside of a hospital, often at lower cost. Hospitals, on average, charge insurers 300 percent more for drugs than what they pay for them, according to a study from UC Berkeley.
New Hampshire’s chapter of the National Federation of Independent Business is opposed to the legislation. John Reynolds with the National Federation of Independent Business told NHJournal that Senate Bill 256 is anti-competitive and will drive up costs for New Hampshire small businesses.
“This is an anti-consumer proposal masquerading as a patient safety bill,” Reynolds said. “In the simplest terms, it gives a blank check to large hospital systems that will drive up the cost of already expensive specialty drugs for every Granite Stater.
“At a time when people all over the state are upset about rising health insurance premiums, the effect will be even higher premiums.”
The New Hampshire Hospital Association, a lobbying group for the state’s hospitals, has thrown its support behind the bill after initially opposing the legislation earlier this year. Hospital officials argue the practices increase patient risk.
“White bagging medications should be prohibited when dosage and or compounding are dependent upon current patient lab results or clinical presentation and the time of medication administration,” a spokesperson for the New Hampshire Hospital Association told NHJournal. “White bagging medications should be prohibited when dosage and/or compounding are dependent upon current patient lab results or clinical presentation at time of medication administration.”
Reynolds said concerns regarding patient safety and rising insurance premiums can be balanced.
“Lawmakers hear stories about patient safety, access, and handling that bring about much concern, but you can address these without eliminating a crucial cost-control system that ensures that premiums don’t skyrocket,” Reynolds said.
The push to ban the two practices comes as small businesses in New Hampshire are already bracing for rising premiums in 2026, largely due to the popularity of GLP-1 medications. These drugs have been recognized as a driving factor for cost increases by both the New Hampshire Department of Insurance and the progressive New Hampshire Fiscal Policy Institute.
Under proposed legislation, healthcare plans sold in New Hampshire would be required to cover GLP-1 medications, which have led to premium increases of up to 14 percent, according to a study from the Employee Benefits Research Institute.
Raj Gupta, who owns Granite State Hardware in Manchester, told NHJournal he pays the full cost of premiums for his full-time employees and is anxious about the impact of the proposals. He currently pays $4,700 per month in premiums for two full-time employees, with each additional full-time employee increasing the cost by up to $2,500.
“Fortunately, our open enrollment period isn’t until July 2026, but we get a front-row seat for the next six months to see how these proposals play out,” Gupta said. “We’re not sure if it’s a blessing, a curse, or if we’ll be staring down an even larger bill.”