The ACA has proven to be a failure for all Americans. Insurance has not become more affordable with the introduction of the exchange market, and those on the exchange are losing insurer options with every new enrollment period, causing more to be uninsured. The American public does not need more government intervention into the health care market, they need more choice and transparency.
Health insurance plans on the exchange, which was supposed to be the affordable alternative to private plans, saw premiums increase 105% in 39 states between 2013 and 2017. On average, all U.S. households saw a 12% increase in health care premiums regardless of plan type.
Between 2016 and 2018, 2.5 million people who were on unsubsidized exchange plans dropped out of the individual market as their premiums increased and there was an increasing lack of choice among insurers.
The ACA included subsidies for some that had an income 100% to 400% the federal poverty level. The intention was to help fund premiums for people who would have otherwise been unable to join the exchange market. However, the ACA has led to a new population of uninsured people who have too high an income to qualify for subsidies but cannot afford the increase in premium costs.
Biden’s plan would eliminate the current 400% income cap for people to qualify for subsidies and would cap the amount of income spent on health care coverage from the current 9.86% to 8.5%. This would not change the charge rate insurance companies have negotiated with those in the medical field. Those rates would still be able to rise, and the government would pay the difference, putting the burden on the taxpayer.
That is not to say that lowering this cap would mean access to affordable care for many more Americans. As of 2018, 33% of uninsured Americans who qualified for subsidies chose to not purchase insurance on the ACA exchange, even with this assistance. And 35% of the uninsured had an income more than 400% the federal poverty level and still were unable to afford insurance on the exchange.
Currently, under President Trump’s administration, affordable care and transparency rules have been put into place to empower Americans to have choices and options when deciding on their health care funding.
Last June, Trump signed an executive order that would allow the expanded use of health savings accounts (HSA). An HSA allows a patient to have access to affordable care without incurring taxes as they save and spend the balance of the account. Sen. Ted Crus (R-TX) and U.S. Rep. Chip Roy (R-TX) have filed companion bills in their respective chambers for the Personalized Care Act. This bill would legislatively reduce restrictions on HSAs, which can make them a competitive alternative to traditional insurance, including how much can be contributed into these accounts.
There has also been the growth of direct primary care in response to the ACA as both patients and physicians become frustrated with the over-regulated market. Patients see the financial benefit of enrolling with a DPC physician, and physicians also see the benefit, as this model brings them back to the patient-physician relationship that allows them to practice outside of the bureaucracy and exasperation of the ACA.
Biden’s health care plan is not revolutionary. It’s more of the same—higher costs and fewer choices. Trump has shown that he can be a leader in empowerment Americans in the health care market. The Affordable Care Act was not the right answer a decade ago, and expanding it is not the path forward now.