Biden touts health care wins, but Bidenomics is driving health care costs higher

In his recent state of the union address, President Biden hailed his health care accomplishments, boasting that this year a record 20 million Americans signed up for health insurance through Affordable Care Act health plans.

What the president failed to mention is that average premiums for these plans have more than doubled since 2014. And average deductibles — the amount you must pay before your insurance kicks in — are up nearly 60 percent.

Does that sound affordable? 

A recent report showed almost 75 percent of voters still worry about the cost of health care and being able to afford unexpected medical bills. And some 40 percent of Americans delayed medical care last year due to concerns about cost.

The ugly truth is, it’s getting harder to find an affordable health care arrangement that fits our unique needs, and harder to find a doctor in our insurance network. These problems stem from, and reinforce, the root cause of today’s medical inflation: over-reliance on third parties like insurance companies, employers, and government programs. Ninety percent of health care today is paid for through third parties. Third parties, not patients, call the shots.

Three years ago, the president signed a bill expanding taxpayer subsidies to health insurance companies that that offer taxpayer-subsidized health coverage. The bill increased subsidies for people earning between 100 percent and 150 percent of the federal poverty level — making insurance free for many of them. It also enriched subsidies for people earning more than 400 percent of the Federal Poverty Level (FPL) — meaning people who don’t really need the extra help.

Unsurprisingly, these “enhanced” subsidies have inflated the price of health insurance, as a 2021 federal study confirms, and will cost taxpayers a staggering $100 billion by next year.

Overall, the U.S. government spent $1.8 trillion on health insurance subsidies last year. And yet, for all this spending the U.S. still has the worst health outcomes among 38 high-income countries. American life expectancy at birth is three years below the average for these nations.

The expanded ACA subsidies are set to expire next year. This is an opportunity for Congress to fix, not just the ACA, but health care generally. At a minimum, lawmakers should: 

1. Make subsidies less inflationary.
2. Reduce the burden on taxpayers.
3. Give patients more choice and control.

Happily, some lawmakers are working to fix these problems.

One is Rep. Pete Sessions (R-Texas). His Health Care Fairness for All Act (HR-3129) would offer every American under 65 a generous annual personal health credit to use for health insurance and medical expenses, as they see fit. The credit would be worth $4,000 for an adult and $2,000 for a child. That’s $12,000 for a family of four with two kids. People could use the money to choose the mix of coverage that’s right for them.

For some, it could mean an affordable insurance policy paired with a low-cost, monthly membership in a direct primary care arrangement that gives them unfettered access to their favorite doctors with no extra charges or hidden fees. For others, it could mean buying their prescription drugs at deep discounts through Amazon’s HSA store instead of paying inflated prices through their insurance.

Another pair of lawmakers — Reps. Greg Steube (R-Fla.) and Kat Cammack (R-Fla.) — have come up with a clever way to give people of limited means more options while reducing wasteful transfers to insurers, saving taxpayers an estimated $30 billion over a decade. Their ACCESS Act (HR-5608) would give millions of lower-income Americans a chance to have a tax-free Health Savings Account that’s pre-funded with money that would otherwise have gone to a health insurance company. This “HSA Option” would give them more money for health care, and importantly more access to medical items and services — and trusted doctors — their insurance doesn’t cover.

Each of these proposals is completely voluntary for individuals. If you like your health plan, you can keep it.

While the president and his allies celebrate the ACA’s 59 percent approval rating, a new survey shows the ACCESS Act enjoys the support of 82 percent of Americans. Some 78 percent of Republicans, 79 percent of Independents, and 88 percent of Democrats support the concept; overall, 69 percent like how it would give lower-income Americans access to some of the same health care options better-off Americans enjoy.

President Biden brags about his health care policies, but too many Americans live in constant worry over paying for care and surprise bills. Even people with generously subsidized premiums face high out of pocket costs and limited choices.

We can fix much of what’s broken in health care by funding patients — not third parties like insurance companies. It’s time to empower Americans with more control, more affordability, and above all more personal options. 

Dean Clancy is senior health policy fellow at Americans for Prosperity.