Although health care did not receive much attention at the debate between the two major presidential candidates last week, voters consider it the second-most important issue in the upcoming election, behind only the economy. Neither Vice President Kamala Harris nor Republican nominee Donald Trump revealed any plan for reforming the nation’s health care system.
Voters have good reason to worry about health care. Costs keep rising, access to care is becoming more complicated, and the rules and prices are incomprehensible to the consumer. “[H]ealth costs are growing at a faster rate than in recent years,” the KFF research group notes. Premiums for health insurance in the individual marketplace are expected to rise by 12.7 percent in 2025 alone. Premiums in the Affordable Care Act (Obamacare) marketplace are forecast to increase by an average of 7 percent in 2025, after a 6 percent hike last year.
Average annual family premiums rose by 7 percent in 2023, to nearly $24,000, up by 22 percent over the past five years. Workers contributed “$6,575 annually toward the cost of family premium, up nearly $500 from 2022, with employers paying the rest,” KFF notes. The average U.S. family’s annual health insurance premium more than quadrupled from 1999 to 2023, and real, inflation-adjusted U.S. health care expenditures per capita have more than doubled since 2000. Health care spending as a percentage of gross national product rose from 13.3 percent in 2000 to 17.3 percent in 2022.
In 2021, my Heartland Institute colleague Justin Haskins and I developed and published The American Health Care Plan, in which we proposed dramatic federal-level reforms that would cut health care costs, increase access to high-quality care, and expand consumer choice for every American, by giving the health care system the market discipline it desperately needs.
A Democrat president and Congress, and a divided Congress since 2022, ensured that our plan would not be adopted. We believed it important, however, to make sure that lawmakers and the public would have a choice other than the current, massively distorted system and the disastrous socialized-medicine Medicare for All scheme then under consideration.
We still believe that the American Health Care Plan is the best reform for the nation’s health care system, and a smart presidential candidate would do well to champion it. We call it “a free-market, pro-liberty alternative to government-controlled health care.” It would fix the health care mess. We know, however, that national reform is going to be a tough sell.
As a result, The Heartland Institute has put together a follow-up policy study that outlines how states can reform their health care systems to accomplish some of these same goals even without national reform. Our new report, American Health Care Plan: State Solutions, describes nine steps states can take to make excellent health care more accessible and affordable.
First, states must cut waste in their Medicaid programs, especially by removing ineligible people from the rolls. Medicaid accounted for 27 percent of all state spending in 2021, and automatic re-enrollment implemented during the pandemic kept states from stopping payments to ineligibles. They can clean up their rolls now – and should.
States should improve price transparency and consumer choice by, for example, banning hospitals from collecting medical debt if they do not comply with federal laws regarding posting of prices or if they engage in surprise billing, in which patients are not warned that a provider is out-of-network and is far more expensive than expected.
Some states have “certificate of need” laws that require health care providers to get the government’s permission to add facilities or even equipment. Those oudated laws drive up prices and impede patients’ access to care. States should repeal those laws.
State and federal laws and consequently tangled insurance regulations and hospital policies increasingly intrude into the doctor-patient relationship. States should affirm doctors’ right to write off-label prescriptions and to write and speak in public about all medical issues. States should also end “prior authorization” rules by which insurance companies prevent doctors from immediately prescribing the medication that is best for the patient if it is more expensive than less-effective options.
Doctors and patients are increasingly turning to direct primary care (DPC), which provides basic health care services such as examinations, tests, and routine care associated with office visits for a small monthly payment, paired with very-low-cost catastrophic insurance. The average DPC cost for most people is $80 to $150 per month, a great bargain in today’s environment. States should foster DPC by defining direct primary care in simple terms and clearly stating that it is not insurance – because it is not insurance and its cost savings depend on freedom from the complicated, arcane regulations that apply to insurers.
States can and should also increase access to telemedicine, expand doctors’ “right to treat” freedom to patients with nonfatal debilitating conditions, and improve access to care by signing on to an Interstate Physician Assistants (PA) Compact to help serve people in the 7,200 federally designated professional shortage areas and other places of need. With nearly one in five medical professionals having left the profession during the first year and a half of the pandemic, licensure portability for PAs is an urgent need.
Finally, the 10 states that have resisted the pressure to take “free” federal money and expand Medicaid to middle-income families and single adults have a unique opportunity to implement even bigger reforms by applying for waivers to unshackle them from burdensome federal regulations. Fundamentally rethinking how these states help provide health care to the truly needy would spur innovative and unique solutions to the problems with the nation’s health care system and provide those states’ patients with better care and more choice.
This option would require the election of a president willing to grant these waivers – one sympathetic to market solutions.
Some states have already begun implementing some of these proposals. Every state should be thinking in these terms and applying the policies we describe in American Health Care Plan: State Solutions, instead of continuing to wait for Washington, DC to act.
