We have been witnessing lunacy. Senate Democrats repeatedly voted against a short-term, “clean” resolution to reopen the federal government because they insist, amidst massive deficits and dangerous debt, on adding another $1.5 trillion in total federal spending.
Among other items on their wish list, such as Medicaid eligibility for illegal aliens - House and Senate Democrats want to make the expansion of temporary Covid-era emergency taxpayer subsidies for Obamacare insurance premiums permanent. The Covid pandemic is over, folks.
Recall that President Obama and Congress established an income cap for the taxpayer insurance subsidies at 400% of the federal poverty level, or $128,600 for a family of four.
Today, congressional Democrats want to abolish that six-figure cap and subsidize the rich. Beyond fiscal insanity, this is a surreal rewrite of the social contract: compel today’s lower income taxpayers to subsidize tomorrow’s higher income Obamacare beneficiaries - indefinitely.
While Congress should reform the Obamacare subsidies to ensure that poor and lower middle-income people can afford coverage, they should refrain from expanding dependency on government up the income scale.
When this madness ends, Congress must address the routinely neglected and supremely unpleasant underlying problem: the indisputable and costly failures of the Affordable Care Act of 2010, or Obamacare, itself. Rarely has there been such a massive disparity between the official promises and the real-world performance of any major government program.
Let us pass over, for the moment, President Obama’s solemn 2009 promise that if you liked your health plan you could keep it. If fact, millions of Americans lost the coverage they knew and liked. Even Politifact, the lefty “fact-checker”, called Obama’s promise the “lie of the year”.
But Obamacare’s chronic conditions are still with us. The rapidly rising health care costs, the collapse of personal choice and competition in the individual markets, and the widespread reduction of patient access to preferred doctors and hospitals in the Obamacare plans.
The law was supposed to solve, prevent, or at least ameliorate these problems. It did not.
Lest we forget. During the health care debate, President Obama boldly promised that his signature legislation would “bend the cost curve” downward, and furthermore, the “typical” American family would see a yearly reduction in their health insurance premium costs of $2500. Even without the benefit of hindsight, President Obama’s claim seemed extravagant.
So, what happened? A comprehensive Heritage Foundation analysis of the insurance data describes the trends in quantitative detail. For example:
Premium costs exploded. Between 2013 and 2022, average monthly health insurance premiums in the individual markets rose from $244 to $568, a 133% increase. In 2014, the sticker shock hit the nation’s individual markets immediately, with radical hikes in premiums even among young people in their 20s. Obamacare’s top heavy regulatory system contributed to these dramatic increases, evidenced by the fact that 15 states over this period managed to reduce their premiums by securing waivers from Obamacare rules. Meanwhile, premium increases in the employer-based markets, which are less regulated by Obamacare, saw an increase of only 44% over the same nine-year period. Of course, for lower income people, these premium increases are papered over by very generous taxpayer subsidies, funding the coverage through ever larger payments to health insurance corporations. In the current government shutdown debate, Democratic congressional leaders want to expand these taxpayer subsidies to upper income families as well.
Deductibles Soared. There is a routine trade-off between rising premiums and deductibles, or front-end payments, for medical services. In 2024, workers in relatively small firms (less than 200 employees) offering “high deductible” employer-sponsored health insurance, faced a deductible averaging $2,317 for “self-only” coverage. Among Obamacare’s “bronze” plans, the lowest premium cost offerings, average deductibles for “self-only” coverage increased from $5,094 in 2014 to $7,144 in 2024. And for family coverage, the average annual deductible jumped from $10,278 in 2014 to $14,310 in 2024. Some enrollees, presumably, can afford “Affordable Care Act” coverage.
Choice and Competition Declined. Between 2013 and 2024, the number of plans available in the individual markets declined from 395 to 304, a 23% decline. The disruption, however, was periodically very severe. In 2018, for example, there were just 181 plans in these damaged and increasingly expensive markets; and in eight states patients had no plan choice at all. Government-sponsored monopolies.
Reduced Access to Providers. In a 2022 survey of large employer plans, the Kaiser Family Foundation found that 63% had “very broad” provider networks. Health plans could and did reduce their premium costs by narrowing their networks of doctors, hospitals, and medical specialists. In 2014, the first year that Obamacare’s rules on the insurance markets were implemented, it became clear that insurance companies were responding by restricting their contracts with medical professionals and institutions. By 2018, Avalere, a research firm specializing in health policy, reported that 73% of Obamacare plans had narrow networks. By 2024, according to the Heritage Foundation analysis, 80% of Obamacare plans had “more restrictive” access to medical professionals and specialists. Please note: Congressional liberals and their allies in academia used to call this “junk insurance.”
During the debate on the 2025 government shutdown, congressional liberals have tried to reframe it as a debate about health policy.
OK! Let’s engage. The “Affordable Care Act” coverage is unaffordable. So, Congress must fix the badly broken status quo that Obama locked in statutory concrete 15 years ago and follow some basic principles.
First, personal freedom is the best tool in the box. If any American citizen wants to purchase their health insurance on today’s Obamacare health insurance exchanges, they should be free to do so. But Congress and the Trump administration should also provide an “off-ramp” for Americans who want better and more affordable options.
Second, Americans should be able to control their health care dollars and decisions. They should be free to secure affordable, portable, quality coverage of their personal choice, with guaranteed consumer protections, especially for those with pre-existing medical conditions. On this, there is and should be a bipartisan consensus: big insurance cannot be trusted.
Third, any such reform should also provide for enforceable and fully transparent health care pricing, as well as intense market competition among health plans and providers to control cost and stimulate innovations in health care financing, benefit design, and care delivery.
Health policy is complicated and hard. Sound reform does not require the enactment of one giant, unreadable Obamacare-like 2700-page bill, riddled with mysteries and mistakes. Reform can be accomplished in stages, step by step, bill by bill. Small changes in law can have large impacts.
House and Senate members, working closely with the administration, should take their time, conduct the necessary hearings, and deliberate and debate and resolve their differences over specific policy changes. That is the best way to ensure their well-intentioned efforts do not result in the unintended consequences. The iron law of unintended consequences routinely goes berserk in health policy.
Americans are again ready for a change. It’s time for the Trump administration and its allies in Congress to go on offense.
Robert Moffit, Ph.D., is a senior research fellow in the Center for Health and Welfare Policy at The Heritage Foundation.
