Congress doesn’t have to fix the health insurance industry, but it can help us work around it

In addition to former President Donald Trump’s repeal of Obamacare’s individual mandate, every Republican attempt to repeal the Affordable Care Act since its inception in 2010 has either failed or been toppled by President Joe Biden. As a result, health care has become less affordable and accessible over time.

Nearly half of respondents to a 2022 poll by the Kaiser Family Foundation reported delaying health care because of cost, and a third of insured adults were concerned about the cost of insurance premiums. The majority of black, Hispanic, uninsured, and low-income adults all say it is difficult to pay for health care.


Congress needlessly and clearly cannot fix the abomination that is the American health insurance industry. But it can finally help us cope.

Already, some people have health savings accounts — tax-advantaged accounts for funds specifically delegated toward qualifying medical expenses, including everything from over-the-counter drugs to co-pays and out-of-pocket care. But the majority of countries are legally prohibited from using HSAs.

Some HSA users have found that they can not only reduce out-of-pocket costs, but also increase access to timely care. It takes the average patient more than 20 days to see their primary care physician, but the direct primary care model offers a “concierge” service to patients. One Medical, a DPC practice recently purchased by Amazon, charges patients an annual fee of $199 for access to next-day appointments in major cities and 24-hour virtual care at no additional cost. But while One Medical relies on patient health insurance to cover lab costs, other DPC startups such as Forward charge higher up-front rates to go completely non-insurance deals.

Of course, paying for a high-quality DPC subscription like Forward without insurance leaves obvious risks: Such a patient would be 100% ready for emergency treatment, for example in the case of a car accident or cancer.

Congress can do two things to fix this. First, it can help patients act a little more like customers by removing the onerous regulations governing who can have an HSA, something Rep. Chip Roy (R-TX) in his Healthcare Freedom Act. Second, it may make some concessions to the pre-ACA catastrophic health insurance model. Even after some Trump-era deregulation, the Obamacare exchange only allows catastrophic coverage at high deductibles and low premiums for patients over 30 years of age with a “difficulty waiver.”

What about drug costs? Thanks to efforts by Congress to make health insurance more comprehensive, the medications and procedures that insurance companies now have to cover are becoming more expensive. Take oral contraceptives, which are mandated by the ACA to be fully employer-funded. From January 2014 to 2020 , the price of oral contraceptives almost doubled. Compare that with the price of prescription drugs which increased by around 40% in that period, and over-the-counter drugs which only increased by 10%. While the insurance industry has broken the laws of supply and demand for drugs, the HSA model can help restore that, reducing the list price of prescription drugs in the process.

The HSA-to-DPC model would also eliminate the moral hazard of the worst legacy of the New Deal: employer-sponsored health insurance.

While health insurance should ideally have a stake in reducing long-term costs through preventive care and short-term expenses, the most affordable forms of health insurance generally follow us from job to job. Thus, insurance companies are fine with treating chronic health problems or possible health consequences down the road for other companies to cover. For this, thanks to President Franklin D. Roosevelt, whose wage and price controls prompted insurance companies to offer health benefits in lieu of raises.

The health care industry is one fifth of the US economy. Congress has lost both the ability and the will to turn the insurance industry upside down on its own. However, with two minor legal changes, Congress could help people completely bypass an effective cartel, making the country happier, healthier, and wealthier in the process.


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