This week, the U.S. House of Representatives will vote on a Democratic bill that would massively expand Obamacare. They claim it’s vital to making health care more affordable. But the opposite is true.
Recall that Democrats created Obamacare and expanded it during the pandemic. Now they want to expand it again. No Republican voted for any of that. And they shouldn’t start now.
Not having a plan to make health care affordable is a luxury congressional Republicans can no longer afford. Americans are demanding health care affordability.
Happily, the GOP is starting to forge a plan. And that should make Democrats nervous.
The conventional wisdom holds “Republicans lose every health care debate.” And Democrats are counting on that axiom to remain true as they seek to retake the gavels in the U.S. House and Senate in 2026.
But this time feels different.
Three new factors have reshuffled the deck on the important health care issue: (1) voters’ desperate desire for affordability, (2) the manifest failure of Obamacare to produce affordability, and (3) the political prowess of Donald J. Trump.
President Trump’s “fund people, not insurers” rallying cry, reiterated in a December 17th national address, has created an opening for Republicans to go on offense with real reforms that provide real relief from high health care prices — something the Democratic plan to bail out the failed Obamacare program doesn’t even try to do.
As we’ll see, the list of such sensible reforms is long. Republicans just need to enact them, or at least force Democrats to vote on them, so voters can see and choose.
In his December 17th speech, the president renewed his call to fund tax-free Health Savings Accounts as an alternative to the Democrat’s demand that Congress extend the enhanced Affordable Care Act premium subsidies that Democrats added during the pandemic.
Those extra subsidies expired on January 1st.
Reinstating them retroactively wouldn’t reduce health insurance prices by even one whit, but it would fuel fraud and cost taxpayers nearly $30 billion a year, every penny of which would go straight to health insurers.
Instead, the president said, “I want the money to go directly to the people, so you can buy your own health care. You’ll get much better health care at a much lower price.”
He’s right. Directly funding tax-free HSAs is a much better idea than propping up a broken system that is the main driver of premium increases. Under the “Affordable” Care Act, health insurance premiums have tripled and deductibles have doubled.
By contrast, HSAs reduce prices by enabling people to shop for value. Just as we see at the grocery store and the gas station, prices get lower and more transparent when consumers are armed with the dollars and the power to choose, unhindered by third-party meddling. Since every HSA purchase brings the equivalent of a 25 percent discount, thanks to the generous tax treatment, and unspent funds roll over and grow from year to year, people will have powerful incentives to seek out value. That will reduce prices.
And here’s a bonus: HSAs enable people to obtain care and doctors their insurance doesn’t cover. Under Obamacare, access to doctors has shrunk, wait times have reached historic highs, and insurer claim-denial rates have grown tenfold. ACA insurers deny 20 percent of claims. HSAs free people from all those hassles.
“The only losers,” the president added, “will be insurance companies that have gotten rich. … They will not be happy, but that’s okay with me because you, the people, are finally going to be getting great health care at a lower cost.” Amen.
Democrat’s plan to reinstate the Biden subsidies would theoretically help 7 percent of Americans, 60 percent of whom, even without the extra help, will have access to a plan that costs them less than $2 a day in 2026.
Now, it’s true ACA enrollees who earn more than 400 percent of the federal poverty level have just lost the temporarily enhanced subsidies. But they knew this change was coming. And they constitute just one-half of one percent of the U.S. population. And at $128,600 a year for a family of four, it’s hard to argue they need additional public subsidies.
For those over 400% of poverty who may have lost coverage through no fault of their own, such as seniors in their early sixties (too young for Medicare) with very high medical bills, any new help should be targeted just to them. An extension of the extra subsidies for everyone would be wasteful overkill.
The genius of Trump’s HSA-funding idea is it positions Republicans as fighting for every American against the insurance companies. That’s more popular than Democrats’ status-quo message.
In a new Americans for Prosperity poll, 82% of voters say bringing down health care costs should be a top priority for Congress, 83% prefer having more options for personalized care over more government control and subsidies, and 80% and prefer that public subsidies go directly to consumers rather than insurers.
Trump is on the winning side of an 80/20 issue.
Trying to find a “compromise” to reinstate the extra subsidies is a fool’s errand because Democrats will ruthlessly block it. They want a political issue, not a signed bill.
And here’s why Democrats should be nervous.
Republicans have already enacted significant health reforms, in the Working Family Tax Cut bill Trump that signed in July. In this new law, Republicans have expanded HSA access to an additional 10 million Americans enrolled in Obamacare plans and made affordable direct-access-to-your-doctor subscriptions tax-free for 40 million HSA account holders, potentially benefiting 75-80 million Americans.
And Republicans are already busy building on those achievements. On December 11, a majority of the Senate voted to reduce ACA premiums by 11 percent through Cost-Sharing Reductions and to direct a portion of subsidies into the HSAs of ACA bronze-plan holders. Excellent.
And on December 17th, a majority of House members voted to expand HSA access to yet another 20 million Americans (workers and seniors), reduce workplace premiums by 29 percent through Association Health Plans, and make coverage more affordable and portable for up to 150 million workers through CHOICE arrangements. Now we’re talking!
These ideas deliver real affordability.
Congress should send them to Trump’s desk pronto, plus even more HSA access and prefunding reforms. Keep the bills coming.
One great idea they should add to the mix: Senator Rand Paul’s idea of a “health care marketplace for all.” Under this proposal, big national membership organizations like Costco and Sam’s Club would be allowed to offer health insurance to their millions of members at deeply discounted group prices. Those kinds of entities are much, much larger than even the largest employers. Think of the savings.
These kinds of market-oriented reforms would go a long way to fixing the system that Obamacare broke. And forcing votes on them would give voters a real choice in 2026.
Trump’s call to put health care dollars directly into patients’ hands is the kind of bold affordability solution Americans are demanding. Republicans have an historic opportunity to seize the initiative and go on offense.
Democrats are vulnerable on health care because they are wedded to an indefensible status quo and have no plan to fix it.
Republicans have a plan. They should seize the moment.
Dean Clancy is a Health Care Policy Fellow at Americans for Prosperity.
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