Two-thirds of Americans worry about being able to afford healthcare, according to a recent KFF poll.
And they're looking to Washington to do something about it.
Republicans have an opportunity to meet that demand — and turn healthcare from a political liability to a policy success.
Just last month, the Trump administration proposed a rule that would expand access to catastrophic health plans on the Affordable Care Act's exchanges.
These policies carry lower premiums and higher deductibles than traditional exchange plans but still protect patients from financial ruin in the event of a serious illness or injury.
Today, catastrophic plans are largely unavailable on the exchanges. Obamacare restricts them to people under 30 or those who qualify for hardship exemptions.
That limitation makes little sense.
Most Americans simply do not incur large medical expenses in a given year.
According to the Peterson-KFF Health System Tracker, the bottom half of adults by medical spending averaged just $374 in health costs in 2022.
For many people, paying hundreds of dollars every month for comprehensive insurance coverage just isn't rational.
A low-premium catastrophic plan that protects against major medical expenses could be a far better option — especially given that benchmark exchange premiums averaged $625 per month this year.
The Trump administration is also exploring ways to give Americans greater control over their health care dollars.
Rather than sending federal subsidies directly to insurance companies, the president has proposed providing financial assistance to individuals.
The best way for the government to do so would be to make subsidy deposits into an individual health savings account.
HSAs allow individuals to set aside money for medical expenses tax-free, watch those savings grow tax-free, and withdraw them tax-free for qualifying care.
For many households, those tax advantages effectively reduce the cost of medical care by 25% or more.
This approach would empower patients to choose the coverage that best fits their needs. Some might select plans with narrower networks but lower premiums.
Others might opt for broader coverage. Still others may choose bare-bones insurance that protects against catastrophic costs while paying routine expenses out of pocket.
When patients control their healthcare spending, providers and insurers have strong incentives to compete for their business — by lowering prices, improving quality, or offering better service.
Lawmakers should also pursue reforms that address one of the biggest distortions in federal healthcare policy — the way Medicare pays different prices for the exact same service depending on where it's performed.
Today, Medicare often pays far more when a procedure is delivered in a hospital outpatient department than when the same service is provided in a physician's office or ambulatory surgery center.
These payment differences inflate costs for both taxpayers and Medicare beneficiaries, whose copays are based on what their providers charge Medicare.
They also create incentives for hospitals to buy up physician practices in order to direct additional referral traffic for tests and procedures to their more expensive outpatient departments.
The Trump administration has already begun moving in the right direction.
Earlier this year, regulators enacted a policy to align payments for certain drug-administration services — such as chemotherapy infusions — across care settings by cutting payments to hospital-owned outpatient facilities and bringing them closer to what Medicare pays physician offices.
The change is expected to reduce federal spending and lower Medicare beneficiaries' out-of-pocket costs while discouraging hospitals from shifting routine services into higher-priced settings.
Expanding these "site-neutral" payment reforms could save taxpayers tens of billions of dollars over time — and make healthcare more affordable for seniors and privately insured patients alike.
Americans are demanding relief from rising healthcare costs.
Expanding catastrophic coverage, empowering patients to control their health spending, and tackling distortions in federal payment policies would move the system in a more competitive and affordable direction.
If Republicans advance reforms like these, they won't just win the policy debate over health care affordability — they may win the political one as well.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Healthcare Policy at the Pacific Research Institute. Her latest book is "The World's Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It." Follow her on X @sallypipes. Read more Sally Pipes Insider articles — Click Here Now.
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