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Four Ways Congress Can Help Lower Health Insurance Costs

It’s no secret that ObamaCare is still wreaking havoc on the health insurance market. Employers are finding it more difficult than ever to offer health insurance to their employees and Americans continue to face unaffordable premiums. To make matters worse, political posturing and government regulation make innovative solutions to these problems more difficult to implement.

A new report from the Foundation for Government Accountability details a new approach to lowering health insurance costs for workers through a parallel risk pool on the individual market, as well as four other options lawmakers have to empower consumers and make insurance more affordable, adaptable, and flexible.

Short-term health plans make health insurance adaptable.

Whether an individual is between jobs, waiting for Medicare coverage to kick in, or simply missed their open enrollment period, short-term health plans exist to offer temporary—and affordable—coverage options to consumers. And with premiums 59 percent less expensive than those on the individual market, short-term plans are very attractive. States that fully allow short-term plans see higher exchange enrollment, more insurers in the market, and lower premiums overall.

But unfortunately, access to short-term health plans keeps being caught up in political headwinds. After decades of stable regulations issued during the Clinton administration, the Obama administration restricted the use of short-term health plans. President Trump restored access to them, creating consumer benefits worth $8 billion. And now, consumer access to them is under threat again by the Biden administration.

Congress could stop this cycle once and for all by codifying the Trump administration’s rules to ensure that short-term plans continue to exist for Americans.  

Association health plans maximize buying power.

Thanks to ObamaCare, it’s become increasingly difficult for employers to offer health coverage. Between 2003 and 2018, alone, the number of small businesses offering health care coverage to their employees dropped by 31 percent. Association health plans (AHPs), however, offer small businesses the opportunity to band together to purchase health insurance at a more affordable rate.

The Trump administration expanded the use of AHPs, allowing associations to include various industries, businesses from different states, and even self-employed entrepreneurs. Millions of Americans gained access to plans that were 29 percent more affordable, on average.

The Trump-era rule was challenged in court and now rests in legal limbo, but Congress could act now to codify the rules and allow businesses to retain greater buying power to the benefit of their employees.

Price transparency empowers consumers

Many consumers are not aware that some providers set lower cash prices for care compared to what they charge for those same services paid through insurance. Americans are used to shopping around for a good deal, but that’s only possible when they know the prices. During the Trump administration, a handful of reforms were enacted to increase price transparency in the health care market. Those were a good start, but additional transparency measures could help consumers in meaningful ways.

To empower consumers and drive down the cost of care, lawmakers could pursue additional reforms that require providers to share information with consumers about how paying cash could save them money.

Expanded use of out-of-network providers increases flexibility

In addition to higher prices, the advent of ObamaCare brought with it a narrowing of provider networks. Many patients have been forced to go outside of their network to find appropriate care and are forced to swallow the cost of doing so as payments to out-of-network providers do not count toward their deductible—even if the out-of-network provider is more affordable.

Should Congress allow expenses for lower-cost, out-of-network care to count toward in-network deductibles, patients would have greater flexibility to find the best care. And in turn, more competition would be introduced into the health care system, driving down costs everywhere.

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