The Health and Social Care (Wales) Bill has been laid before the Senedd.
The Bill includes measures to remove private profit from the care of looked-after children and give people more say and control over their healthcare by enabling direct payments for continuing healthcare.
Welsh minister for social care Dawn Bowden said: "The Welsh Government is committed to an ambitious reform of children’s care services so they work better for children and their families.
"We do not believe that private profit should be made from caring for children and young people whose circumstances require them to be in the care of a local authority.
"This bill will eliminate private profit from the care of looked-after children and ensure public money is used to deliver improved services which meet children’s needs and deliver better experiences and outcomes.
"It will also enable direct payments for continuing healthcare so people can decide for themselves who provides the care they need."
Brendan Roberts, a care-experienced young person and a member of the Voices from Care Cymru board of trustees, said: "Whenever we have consulted care experienced children and young people about this, they are always clear that they think it is wrong for companies to make profit out of our need for care and support.
"We think that public money that is being spent by our corporate parents to provide for our care should all be spent on that. In a declaration agreed between Welsh ministers and care experienced young ambassadors in December 2022, ministers promised to remove profit from care. We are pleased to see them keep their promise today.
At the moment, those in receipt of continuing healthcare in Wales have no say over how their care is provided, with their care needs arranged by the NHS.
Rhian Davies, chief executive of Disability Wales said: "Voice, choice, and control are vital to ensuring the rights of disabled people including people with long term health conditions. The necessary changes to continuing healthcare reflecting these are very welcome.
"For too long, those on continuing healthcare have not been able to decide how and by whom their care is delivered. This change will allow disabled people to have and enjoy the same rights as those on social care direct payments."