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The recent government shutdown highlighted a common pain point for Americans: the looming (un)affordability of healthcare.
Over 60% of adults in the US have said they worry about unexpected medical bills and the trouble paying for health services. Unfortunately, too often, these fears become reality. About 4 in 10 adults owe medical debt to collections agencies, family members, or credit card companies.[1]
Here’s what’s at stake with rising healthcare costs, and some of the proposed solutions sitting in the waiting room.
Today, about 30 million Americans have health insurance through the Affordable Care Act (ACA).[2] The ACA increases access to health insurance by using government funds to pay for a portion of the premium (or monthly insurance bill). This assistance is provided through tax credits.
The program is intended for those who don’t qualify for Medicaid and can’t get insurance through their jobs. About 92% of people with ACA-sponsored plans receive some premium assistance.[3] The financial assistance you can receive depends on how much money you make.
By subsidizing the cost of premiums, the ACA has significantly boosted the number of people on health insurance. But is simply “having coverage” really enough to relieve the burden of medical expenses? It depends.
Health services have become increasingly expensive over the past several years, causing a hike in insurance rates.[2] Higher costs have been shifted to consumers through more expensive plans. In addition to higher premiums, out-of-pocket costs have also risen, including deductibles and copays.[1]
Cost concerns are shared among people with ACA-sponsored plans and those who get insurance from their employers. Almost 40% of adults under 65 rate their coverage as “fair” or “poor,” saying medical bills are still a serious worry despite having insurance.[1]
During the pandemic, enhanced subsidies to further reduce premiums were enacted for those with ACA-subsidized plans. However, this financial assistance is scheduled to expire at the end of 2025. As a result, the out-of-pocket premiums are predicted to increase by about 75%, depending on the state and type of coverage.[3]
Some lawmakers want to extend these enhanced subsidies to avoid putting already-stressed Americans under more financial strain. Others say they’re too expensive for taxpayers and promote inflated profits for insurance companies.
President Trump recently suggested replacing ACA subsidies with direct payments to Americans to purchase health insurance instead.[4]
Another initiative, called TrumpRx is in the works to target drug prices in America. This is a direct-to-consumer portal where Americans can get “most-favored-nation” pricing on prescription drugs rather than going through insurance.
So far, major drug companies, including Pfizer, Eli Lilly, and Novo Nordisk, have agreed to offer discounted prices (up to 80%) on various popular prescriptions through TrumpRx. Part of the initiative also requires drug manufacturing to relocate to US soil.[5]
Healthcare is a deeply polarizing topic for politicians and voters. In the ever-evolving landscape of healthcare in the US, one thing is clear. Americans are struggling. And with a problem this big, perhaps we need more than one solution to fix it.
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