Commentary
Medical insurance premiums are soaring. They are up by 20 percent this year and predicted to bump up by another 15 percent next year, if we are lucky. For individuals or families seeking such insurance, the cost is approaching the service on a sizable home loan (another thing people cannot afford anymore). Those who can are leaving the system entirely.
Already this year, more than 3 million people have left the official exchanges. This is simply because they can no longer afford the premiums. This pace at which people are dropping insurance is accelerating. This leaves their medical care entirely up to them, which has a plus side: It certainly incentivizes healthy living.
KFF Health News has documented that more medical professionals themselves are leaving the system and choosing self-diagnosis and care themselves. They have an advantage of having access to prescriptions that many regular people need physicians to write. Plus, they are in a position to make a choice.
For many people, there is no choice. Companies with more than 50 employees are required to make medical insurance part of the pay bundle for full-time employees. People call this a benefit, but the cost is pulled from two directions: the business and the salary of the individual. I personally know of several companies that have frozen their payrolls at 49 people just to avoid what amounts to a mandate. Both the company and the people working there are relieved.
What’s striking about these trends is that everyone knows that the current system is unraveling. But this awareness is matched by complete inertia regarding doing anything major and structural to fix the system. This is only going to get worse. Right now, the rising costs are slowing job growth, hobbling enterprise, and driving families to financial ruin.
Since the 2024 election, Republicans have controlled the presidency and both houses of Congress. Among many priorities, they should have included comprehensive medical insurance reform that tears the guts out of Obamacare once and for all. The One Big Beautiful Bill Act included tiny provisions that made some meritorious changes, but they were so small that hardly anyone noticed.
What we needed was (and is) real and massive policy shifts. As it stands now, tens of millions of people are stuck in a system that does not serve their needs. This really cannot last. Something must be done.
The way it operates is so preposterous that it defies belief. You pay high monthly premiums, but with that money you have bought nothing but access. If you actually use the system, you are lucky and rare to get away with only paying the fee for a visit. You will likely say something that triggers higher fees that bump into your deductible. This is what you are required to pay out of your bank account before the actual insurance kicks in.
The craziness of the current system only begins there and gets wackier the deeper you plunge in with specialists, duplicative diagnostics, and negotiations with the insurer, which is as likely as not to decline to cover your costs.
That’s enough complaining for now. What precisely should be done to fix the system? This is not complicated. The following five steps are needed to bring back sanity to the whole system.
First, legislation should loosen the grip that the government has over businesses, mandating the medical insurance benefit only at 250 employees or repealing it entirely. This way employees would be free to shop for their own providers or sign up for a crowd-health solution. It should also make it far easier for any employee, even one who works for a large company, to choose salary over insurance. This is a simple change. Right now, some employees can do that but only if they go to the exchanges to buy, which no one would ever do.
Second, legislation should permit anyone to open a health savings account through any financial institution. Currently, you can only do that if you already have health insurance. That completely defeats the purpose. If anyone could have a health savings account, anyone could begin socking away money for medical expenses and deduct that amount from taxable income. This is such an obvious reform that it is hard to believe anyone could oppose it. Why is this not done already?
Third, insurers need to be liberated from defined benefits plans that were first concocted by the Affordable Care Act. Among the choices should be at least one that offers catastrophic-only plans that would only be triggered with a major health event. Otherwise, the person would simply pay himself for all other services. This must also exclude so-called preventative care, which is misnamed in any case. The premiums for such low-level coverage would also be affordable. Again, this reform is unbearably obvious.
Fourth, premiums should be permitted to adjust downward for lower levels of individual risk. This would require getting rid of community-based rating systems entirely. This is absolutely essential. It brings medical insurance coverage in line with every other form of insurance. Your house is insured based on your household risk of adverse events. Life insurance and car insurance work the same way. It would be preposterous to have any other system in automotive or life and yet here we are with medical insurance generally.
This would have a major impact on the health of Americans. What if by losing weight, exercising, and eating properly you could lower your premiums by hundreds of dollars per month? This would massively shift the incentive to live a healthy life. I know I gave up smoking when I saw the difference in premiums I would pay for life insurance. Apply that same model to everything and change the way people think entirely.
Fifth, the provider cartels need to be broken up by allowing great competition for insurance dollars. This goes for Medicare as well. Licensing and certificate-of-need laws in most states artificially restrict the supply of hospitals, clinics, and specialists, allowing incumbent providers to set prices well above what real competition would produce.
Insurers, in turn, negotiate opaque rates with these same protected networks, and patients never see the actual price of anything until the bill arrives. Legislation should strip away certificate-of-need requirements, open state lines to out-of-state providers and insurers, and mandate real price transparency so consumers can shop the way they do for every other service.
Medicare should be no exception: Opening its reimbursement structure to genuine price competition, rather than fixed administrative pricing set by bureaucrats far removed from the actual cost of care, would apply the same market discipline that private markets sorely need.
When providers have to compete for patients’ dollars instead of simply billing whatever a captured system allows, prices fall and quality rises, just as it does everywhere else in the economy that isn’t hobbled by cartel-like protections.
Taken together, these five reforms share a single thread: They remove government-imposed distortions and let markets do what they do best elsewhere. Millions more people will pay far less and be able to join crowd-health options. Families will be able to afford care again.
None of these ideas are radical; each simply asks that medical insurance be governed by the same principles that already govern every other form of insurance and every other competitive market. The obstacle has never been complexity. It has been decades of accumulated regulation protecting entrenched interests at the expense of patients.
Undoing that accumulation, piece by piece, is the real path to affordable, high-quality health care in America. Until then, we will live in this Orwellian world in which what’s called “insurance” is not that, “coverage” may or may not cover anything at all, and your “wellness checkups” are more likely to result in making you sicker, while all of it is called “affordable” but only a few can afford it.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.
