As we approach the deadline for renewing Covid-era subsidies tied to the Affordable Care Act (ACA), there is a significant urgency among lawmakers. The potential lack of action could lead to substantial increases in insurance premiums for millions of Americans by 2026. Without these subsidies, many individuals may be forced to forgo health insurance entirely, a situation that is becoming increasingly dire.
Some political analysts believe that if Republicans wish to maintain control of the House in the midterm elections, they cannot afford to ignore the needs of these citizens. While it was Chuck Schumer and his Democratic colleagues who initially compromised during the government shutdown, the reality is that significant power rests with the Republicans, making it difficult for them to evade accountability.
This article evaluates an alternative proposal from former President Trump, which promotes health savings accounts combined with high-deductible insurance plans. This model may be beneficial primarily for healthier, wealthier individuals who can afford to contribute to these accounts and absorb higher medical expenses. For middle- and lower-income families, however, offering a limited amount in these accounts serves merely as a temporary fix for the larger problem of escalating healthcare costs associated with anything beyond basic care.
Supporters of this approach argue that involving patients financially will encourage them to seek out high-quality, affordable healthcare. However, finding such options often proves elusive. This disconnect explains the lack of enthusiasm around Trump’s proposed changes, which many view as a recycled concept rather than a viable solution.
By Noam N. Levey. Originally published at KFF Health News
Take the case of Sarah Monroe, who once enjoyed a stable middle-class lifestyle. Residing in a well-kept neighborhood near Cleveland, she and her family had a healthy six-figure income and adequate health coverage. However, everything changed four years ago when Monroe experienced troubling health issues during her pregnancy with twins.
After numerous visits to the emergency room, doctors diagnosed Monroe with a serious heart condition. The medical costs began to pile up, and within the year, she found herself overwhelmed with over $13,000 in medical debt.
This financial strain was exacerbated by the fact that, like tens of millions of Americans, she had a high-deductible health plan. Such insurance typically requires individuals to spend thousands before their coverage begins.
These types of plans have gained traction over the past two decades, particularly due to support from Trump and his Republican allies in Congress, many of whom show reluctance to maintain government subsidies that alleviate medical costs and premiums under the ACA.
While there is no unified GOP strategy in place, some GOP legislators are advocating for a system where Americans who do not receive employer-sponsored insurance are given cash in a specific healthcare account, which would be linked to a high-deductible plan. In this setup, individuals could opt for a lower monthly premium on an ACA marketplace, but be faced with an annual deductible exceeding $7,000.
Senator Bill Cassidy (R-La.) stated at a recent hearing, “A patient makes the decision. It empowers the patient to lower the cost.”
In a recent post on Truth Social, Trump further emphasized this viewpoint: “The only healthcare I will support or approve is sending the money directly back to the people.”
Although conservative economists and Republican lawmakers have championed this patient-empowering model since high-deductible plans first emerged, the results have often not matched the promise. Originally, many employers transitioned to these plans as a response to dissatisfaction with health maintenance organizations (HMOs), hoping to grant patients more control and stabilize costs.
With changes in tax regulations allowing for tax-free contributions to health savings accounts, the philosophy was that “skin in the game” would spur consumers to seek out higher-quality and lower-cost care. However, as Shawn Gremminger, leader of the National Alliance of Healthcare Purchaser Coalitions, observes, “The unfortunate reality is that largely has not been the case.”
Today, high deductibles have become commonplace, with the average plan for a single worker approaching $1,700—an increase from about $300 in 2006. Despite the prevalence of high deductibles, U.S. medical costs have soared, as demonstrated by a 74% hike in the average price of knee replacements from 2003 to 2016—an increase far surpassing overall inflation rates.
At the same time, countless Americans are accruing significant medical bills they cannot afford to pay, even with health insurance. A recent survey estimated around 100 million people in the U.S. carry some form of healthcare debt, with the majority being insured.
Monroe, despite having a health savings account linked to her high-deductible plan, could rarely save more than a few thousand dollars. That amount fell drastically short of covering expenses during her complicated pregnancy and health crisis.
“It’s impossible, I will tell you, impossible to pay medical bills,” she lamented.
Monroe faced additional challenges with her high-deductible plan. Though intended to encourage patients to shop for affordable care, this proved impractical during her complicated health situation, prompting her to select the largest health network available to ensure comprehensive coverage.
Federal regulations mandating hospitals to display prices have simplified some aspects of cost comparison, yet medical services remain challenging to shop for due to their complex nature. For instance, research indicates that only about 7% of total healthcare spending by those with employer-based insurance can be categorized as “shoppable” services.
Fumiko Chino, an oncologist at the MD Anderson Cancer Center in Houston, pointed out, “It makes no sense to expect patients with cancer or other chronic diseases to compare prices for complicated care when they’re facing a threatening diagnosis.”
High-deductible plans can leave patients grappling with overwhelming medical expenses that, as studies suggest, can lead to lower survival rates among cancer patients compared to those with more comprehensive coverage.
For Monroe and her family, the financial strain was severe enough to force them from their home to a smaller apartment. She depleted her savings, faced a deteriorating credit score, and had her car repossessed. Celebrations like Christmas and vacations became luxuries that her family could no longer afford.
Despite these challenges, Monroe remains grateful for her children’s health and retains her job. However, she cannot comprehend the rationale behind a continuing investment in a high-deductible insurance model.
“We owe it to ourselves to pursue a different approach,” she stated firmly. “We cannot treat people this way.”
