Affordability is on the lips of lawmakers these days — and with good reason. Nearly half of Americans say they’re struggling to pay for basic necessities like rent, groceries and health care.
The good news is that Congress is weighing several reforms that could help make health care in particular more affordable.
Many of the drivers of today’s sky-high health care costs are a direct result of Obamacare. The 2010 law made it all but impossible — and in some cases illegal — for insurers to offer low-cost plans. Predictably, individual-market premiums have tripled since the law’s exchanges went online more than a decade ago.
Democrats tried to obscure those increases by implementing enhanced premium subsidies in 2021 and then extending them the following year through 2025. House Democrats managed to convince 17 of their Republican colleagues to approve another three-year extension of those subsidies earlier this year. Doing so would cost $85 billion over the federal government’s 10-year budget window.
Thankfully, that House bill is going nowhere in the Republican-controlled Senate. What can, though, are some ideas that the House GOP included in legislation passed just before Christmas.
Among them is an effort to expand access to association health plans, or AHPs. These insurance products allow small employers and individuals to unite in order to purchase something similar to the large-group plans available to bigger employers.
AHPs give their members more bargaining power with insurance companies. By collecting beneficiaries from a multitude of companies in a single risk pool, they also help insurers manage risk and keep a lid on premiums.
AHPs are one of many policy levers available to Republicans. A more comprehensive health care package should also restore access to short-term health plans as a workable option for Americans who need affordable coverage.
Because short-term plans are not subject to Obamacare’s insurance mandates, they typically cost far less than exchange policies. Yet Democrats have steadily restricted access to them through a Biden administration-era rule and a slew of state-level bans.
Republicans can reverse that trend by codifying rules implemented during the first Trump administration that allowed short-term plans to last up to a year — and to be renewed for up to three years.
Health savings accounts are another vital policy tool Republicans can employ to help more patients afford health care. HSAs are triple tax-advantaged. Money is untaxed going in, grows tax-free and can be spent on qualifying health expenses tax-free.
HSAs empower patients to take control of their health care — to shop around for treatments and services that offer the best value. No longer are they bound to an insurer’s network or coverage decisions. They can force providers to compete for their business. They’re the perfect vehicle for fulfilling President Trump’s goal of giving individuals control over their health care dollars, not insurance companies.
Lawmakers should consider making all Americans eligible to contribute to HSAs, including those covered by Medicare. Right now, only those with high-deductible plans can benefit from these powerful savings tools.
Raising the contribution limits would help, too. This year, contributions are capped at $4,400 for individuals and $8,750 for a family.
Lawmakers should also continue President Trump’s work to expand access to catastrophic coverage — low-premium plans designed to protect against major medical emergencies. While Trump made these plans more widely available, age restrictions still limit who can purchase them. Loosening those rules would quickly open another affordable coverage option to millions of Americans.
All of these reforms would target the most pressing problem facing American patients: affordability. More importantly, they would bring down costs by expanding choice and competition — not by shoveling more taxpayer money into a broken system.