To Make Health Care Affordable, Give Patients Choices

Affordability is on the mind of every American in 2024. From groceries to gas, Americans are spending more. Health care is no different, especially for those with costly medical conditions and high deductibles who started back at $0 of their “deductible met” on January 1.

Health care affordability was recently listed as a top issue for voters in 2024 alongside inflation, with eight in ten and nine in ten wanting presidential candidates to talk about the issues, respectively. In 2023, family health insurance premiums rose to nearly $24,000—a 7 percent increase from 2022—and one in five adults with insurance reported not obtaining needed health care in the past year due to cost.

The country is also spending more overall. Every December, the Centers for Medicare and Medicaid Services provides national health expenditure data for the prior year. Last month’s data showed that in 2022, Americans spent $4.5 trillion—17.3 percent of our GDP—on health care. This was a 4.1 percent increase from 2021 and averaged about $13,500 per person.

This year marks the 11-year anniversary of the implementation of the Affordable Care Act (ACA)—a sweeping law now proven to be affordable in name only. Earlier this month, President Joe Biden touted a record 20 million Americans enrolled in ACA marketplaces as a marker of the law’s success. What he didn’t address was the high cost of health care in America and the amount of government subsidization required to keep up with rising costs.

Four out of five Americans enrolled in the individual market are subsidized by the government—increasing from 9.7 million people in 2021 to 14.3 million in 2023 with higher numbers anticipated in 2024. This is largely due to the Biden administration’s enhanced premium tax credit subsidies from the American Rescue Plan Act and the Inflation Reduction Act. These subsidies go directly to insurance companies rather than to Americans, and extend far beyond the original safety net population. For example, these laws provide premium tax credits to those with incomes greater than 400 percent of the federal poverty line (above $120,000 for a family of four) paying more than 8.5 percent of their income on premiums.

Policy alternatives are desperately needed to address the affordability crisis in health care. Congress should give individuals control of their health care dollars and freedom to choose what works best for them and their families.

Federal policymakers should give ACA subsidies directly to patients instead of insurance companies, and increase their portability by allowing individuals to use the subsidies on direct health care spending or any health care coverage approved by their state insurance commissioners. America’s leaders should then prioritize five solutions to empower Americans with options to choose more affordable care and use these subsidies and other health care spending more efficiently.

First, policymakers should empower Americans with greater price transparency. Health care is the only good where you find out the prices after you have made the purchase. Price transparency enjoys broad bipartisan support, including across the Obama, Trump, and Biden administrations. Yet large, entrenched systems oppose price transparency regulations because they don’t want you to know they are charging so much more than the competitor down the street for the same service. Price transparency requirements should be codified in federal statute and paired with other reforms, such as ending dishonest billing and implementing site-neutral payments in government programs to ensure patients are informed and empowered to spend their health care dollars more wisely.

Second, health savings accounts (HSAs) should be expanded to give patients greater control over their health care dollars and decoupled from high-deductible plans to expand eligibility. Individuals should be allowed to use their HSA dollars to pay for monthly health plan premiums or alternative coverage arrangements. Contribution limits should be raised so these accounts can be utilized for additional savings, such as to help offset costly end-of-life care. HSAs allow patients to direct their health care dollars to best meet their needs.

Third, association health plans (AHPs) should be expanded. AHPs are offered by an employer-based association and provide small employers a way to gain access to the same type of insurance as larger companies. After Obamacare took effect, the number of small businesses offering insurance to their employees dropped off from a peak of 59 percent for the smallest-sized employers (three to nine employees) in 2010 to 39 percent in 2023. AHPs empower small businesses and level the playing field with large companies, especially those that offer competitive benefit packages.

Fourth, member-based nonprofit organizations, such as the Farm Bureaus, should be able to offer health benefits to members outside of the ACA marketplace mandates. These plans have been authorized in six states—Tennessee, Texas, Kansas, South Dakota, Indiana, and Iowa—and can be low-cost and high-quality options that give consumers more choices than the one-size-fits-all, top-down Obamacare approach.

Fifth, direct patient care can enhance access to trusted doctors. In this model, patients pay a clinical practice directly and receive access to a defined set of services, usually consisting of primary and preventive care. Patients and employers who contract with this model can benefit immensely. One case study found that direct primary care (DPC) was associated with 30 percent lower out-of-pocket costs and 20 percent lower employee premiums. Another case study found a 40 percent reduction in emergency department utilization. Policymakers can allow Medicare and Medicaid to reimburse and contract with DPC providers to ensure more Americans, especially the most vulnerable, can benefit from this innovative care model.

Americans need the tools to address health care affordability and gain control over their health care dollars. Ultimately, these solutions will put patients and doctors, not government and insurance bureaucrats, back in charge of health care.

Bobby Jindal (@BobbyJindal) was the governor of Louisiana from 2008-2016 and a candidate for the 2016 Republican presidential nomination. Heidi Overton, M.D., Ph.D., serves as Chief Policy Officer and Director for the Center for a Healthy America at the America First Policy Institute.

The views expressed in this article are the writers’ own.