Democrats initiated the longest government shutdown in history under the guise of caring about Americans’ access to affordable healthcare. Now they have an opportunity to put their money where their mouth is.
The Senate will vote in mid-December on Democrats’ demand that temporary, and soon-to-expire, “enhanced” subsidies under the Affordable Care Act be made permanent. Doing this, they claim, is critical to keeping healthcare “affordable.”
Who are they kidding? Healthcare is more expensive than ever. Obamacare was supposed to fix this, but failed. And Democrats’ dream of a government takeover of the entire system with “Medicare for All” would only make things more expensive.
We need a new approach. Enter President Donald Trump, who has proclaimed a brilliant idea: fund people, not insurance companies.
Last week, the president declared, “We want a healthcare system where we pay the money to the people instead of the insurance companies.” The next day, he added, “Republicans should give money directly to your personal Health Savings Accounts that I expanded in our Great Big Beautiful Bill.”
In just a few sentences, the president painted a healthcare vision that empowers doctors and patients, introduces market-based competition where there’s almost none, and allows Republicans to go on offense. This is big.
An HSA is a tax-free financial tool that allows individuals to keep more of their own money for current and future medical expenses, resulting in a tax cut that reduces government dependency. The money in your account is never taxed. Having an HSA empowers you to use your own money to meet your own unique, personal needs. You can use it for just about anything — copays, lab tests, surgeries, prescription drugs, doctor’s appointments, and more — tax-free.
How do HSAs promote affordability? Every purchase comes with a built-in 25% discount, on average, thanks to the account’s generous tax treatment. HSAs reduce healthcare costs by encouraging patients to shop for value and forcing providers to compete, which in turn reduces costs and makes prices transparent for everyone.
Importantly, an HSA can be used for things your insurance doesn’t cover, for example, a prescription drug that actually works for you when your insurer insists you rely on a cheaper alternative that doesn’t.
Sadly, approximately 80-90% of Americans today lack access to this powerful tool, largely due to overly restrictive federal rules. Happily, Trump took a first step toward addressing this problem in his One Big Beautiful Bill Act, which made HSAs available to an additional 10 million Americans, in addition to the current 38.8 million.
To be clear, the president is not proposing to eliminate Obamacare or weaken its protections, as his critics assume, nor is he proposing to hand out welfare checks or increase government spending. The money going into HSAs would be means-tested, not universal, and would repurpose existing, permanent spending. Diverting former President Joe Biden’s temporarily “enhanced,” and soon-to-expire, ACA subsidies into HSAs is unnecessary and would be incredibly wasteful.
Democrats are vulnerable on healthcare because they are aligned with Big Insurance. Obamacare sends more than $100 billion a year to insurance companies, which have basically become overpriced, highly profitable, government-regulated utilities.
Yet all those billions fail to deliver actual affordability. Since 2014, ACA premiums have tripled, deductibles have doubled, and the cost of an average family health insurance plan has risen by 60%, to more than $27,000. Nearly half of U.S. adults worry they won’t be able to afford healthcare next year. Meanwhile, access to doctors and hospitals has shrunk, insurer claim-denial rates have grown tenfold, and patient wait times have reached historic highs.
Democrats’ fund-the-insurers model can never deliver affordability because the people who need the care are not the people who control the dollars. But with a Health Savings Account, they are.
Two great places to start the ball rolling on “funding people” are Sen. Rick Scott’s (R-FL) More Affordable Care Act and Rep. Greg Steube’s (R-FL) HSA ACCESS Act.
Scott’s bill would let states convert Obamacare subsidies into generous HSA deposits. It would also ease Obamacare’s costliest mandates by making insurance more affordable while retaining its most popular protections.
Steube’s bill would allow about 5 million Obamacare enrollees who earn less than two-and-a-half times the federal poverty level to receive a portion of their subsidy as a cash deposit to their HSA, putting $2,000 a year on average into participants’ hands while reducing average Obamacare premiums by 12% and saving taxpayers an estimated $30.8 billion over 10 years.
RICK SCOTT SAYS HIS HEALTHCARE BILL ‘DOES THE OPPOSITE’ OF OBAMACARE
Neither proposal would cost taxpayers a dime. And while we’re promoting affordability, let’s expand access to affordable short-term health plans and trusted specialists and make workplace coverage portable.
The USS Obamacare is sinking. Instead of bailing it out with more billions, Trump is calling Democrats’ bluff, forcing them to choose between their insurance buddies and the patients they claim to care about.
Dean Clancy is senior health policy fellow at Americans for Prosperity.
