The Democrats’ pointless government shutdown at least put Obamacare atop the national agenda again—proof that even high wire acts of congressional lunacy can deliver golden opportunities for reform. Not missing a beat, President Trump offered a revolutionary patient-centered proposal to resolve Obamacare’s multiple deficiencies.
It cannot come soon enough. The Affordable Care Act is unaffordable, evidenced by skyrocketing premium costs, crazy deductibles, and explosive taxpayer obligations to cover rising program costs. The return on the Obamacare investment has been in a tailspin: declining personal choice, reduced health plan competition, and growing restrictions on patient access to preferred physicians, specialists, hospitals and other medical facilities. Last year, for example, 80 percent of Obamacare plans had restrictive networks.
When President Obama signed the Affordable Care Act into law 15 years ago, he made several extravagant (and some flat-out false) promises. But Obama’s bold pledge to bend the health care “cost curve” downward—promising “typical” families annual cost savings of $2,500—turned out to be the most punitive policy failure.
Cost Explosion: A comprehensive Heritage Foundation analysis shows that insurance premiums in the nation’s individual health insurance markets jumped a stunning 133 percent between 2013 and 2024, roughly twice as fast as premium increases in the employer-based health insurance market.
Proof that the underlying costs of the program—mostly papered over by taxpayer subsidies—are absurdly high is also evident in the rise of deductible costs. Since 2014, rising Obamacare deductibles have been a nightmare for the relatively small number of people ineligible for generous taxpayer subsidies, such as middle income, self-employed people.
According to the Heritage analysis, the average deductible for self-only coverage reached $7,144 in 2024, while the average for family coverage hit $14,310. In short, the “low premium” Obamacare plans, especially those with narrow provider networks, are the quintessence of what liberals used to call “junk” insurance.
Bigger Subsidies: More than nine out of 10 Obamacare enrollees get generous taxpayer subsidies to cover their premium costs, and roughly four out of 10 enrollees pay little or next to nothing in health insurance premiums.
Amid the Covid pandemic in 2021, President Biden and his congressional allies enacted a temporary enhancement of the already generous subsidies, even lifting the cap to secure eligibility for funding wealthy individuals. Not surprisingly, the total cost of Obamacare’s taxpayer subsidies jumped from $53 billion in 2020 to $138 billion in 2025. If the Democrats’ current proposal to make the temporary Covid-era subsidy enhancement permanent were to become law, the Congressional Budget Office estimates that such a measure would add $350 billion to our budget deficits over 10 years.
Since its implementation in 2014, Obamacare’s comprehensive benefit mandates and massive regulatory regime spiked higher insurance costs. But so, too, has the design of Obamacare’s premium subsidies, which have weakened price competition among health plans. Consider the conclusion of a recent report issued by the Joint Economic Committee of Congress:
“Analysis by the Joint Economic Committee finds that enhanced PTCs ( premium tax credits) have not only outlived their intended temporary purpose, but that both economic theory and accumulating empirical evidence indicate that their design, focusing on maximizing coverage regardless of cost, materially weakens the role of price signals and thereby reduces pressure on insurers to contain costs. As a result, enhanced PTCs perform poorly as permanent policy. They do more to improve the financial outcomes of large health insurers than to reduce healthcare costs for Americans. Indeed, for every dollar that benefits consumers through lower premiums, roughly two dollars are captured by insurers, brokers, and intermediaries or are lost entirely as economic deadweight loss.”
In short, Obamacare is a great program for big insurance corporations and their middlemen, not so much for beneficiaries or taxpayers.
Emerging Fraud. The Government Accountability Office (GAO), the congressional watchdog agency, recently revealed something much darker than mere economic inefficiency. In their December 2025 report to Congress, GAO analysts shed a bright light on federal officials’ incapacity to detect and stop major health insurance fraud. Between January and August of 2024 alone, they report, federal officials received 275,000 complaints from people who found that they had been enrolled in an Obamacare plan or different plan coverage without their consent. In testing the program’s integrity for 2025, GAO investigators submitted 20 fictitious applications to obtain Obamacare’s heavily subsidized coverage, and 19 of those applications were approved.
The new GAO report reinforces congressional findings unveiled last November. In its analysis of the Obamacare insurance subsidies, the Joint Economic Committee then reported: “Since the implementation of the enhanced PTCs, the number of enrollees who file no claims has nearly quadrupled, and these individuals now constitute 35 percent of all enrollees. These cases impose fiscal costs and accrue gains to insurers without delivering health benefits, demonstrating that PTCs subsidize idle coverage rather than medical care.”
For big insurance companies, what could be more profitable than collecting on behalf of highly subsidized “enrollees” who don’t file any claims? Another job for Attorney General Pam Bondi.
The mounting evidence cannot be ignored. During a November 6, 2025 hearing conducted by the Senate’s Permanent Subcommittee on Investigations, Dr. Brian Blasé, President of the Paragon Health Institute, testified under oath that as many as 6.4 million people were improperly enrolled this year at an estimated cost of $27 billion: “Many of these enrollees were signed up without their knowledge or consent, victims of massive fraud schemes. A staggering 40 percent of fully subsidized enrollees used no medical services in 2024. Many of these zero-claim enrollees are phantoms.”
“Power to The People.” President Donald Trump’s solution to this mess: Give Obamacare enrollees direct control over the program’s health care dollars and allow them to choose the health plans they like. The President targets the problem congressional investigators identified: “The insurance companies are making a fortune. Their stock is up over a thousand percent over a short period of time. They are taking hundreds of billions of dollars, and they’re not really putting it back, certainly like they should.”
Opening private discussions with Congressional Democrats, Trump is adamant that a direct transfer of funds to individuals and families is the only legislative solution he would accept. Though conceptually simple, such a massive funding transfer requires getting the crucial details right. That is why members of the powerful House Ways and Means Committee are circulating legislative language to provide such direct funding. Meanwhile, Sen. Bill Cassidy (R-LA), chair of the Senate Health Education, Labor and Pensions Committee, is proposing to deposit the big Obamacare subsidies directly into personal health savings accounts.
Today, in sharp contrast to virtually every other sector of the economy, individuals and families have relatively little direct control over health care dollars or key decisions, such as the kind of health plan available to them. If individuals and families had direct financial control, health insurers would be forced to compete head-to-head for consumer enrollment—just like insurers do in every other line of insurance—and prove their worth in delivering efficient, high-quality care at affordable rates.
There is no reason, however, to stop at reforming Obamacare. As my Heritage colleagues Ed Haislmaier and Nina Schaefer argue, the White House and Congress should go much further and expand health savings account options in other health insurance markets. Equally important, they note, Washington should pursue an aggressive health care price transparency agenda—spotlighting insurers’ negotiated prices with providers—such as embodied in bipartisan legislation sponsored by Sens. Roger Marshall (R-KS) and John Hickenlooper (D-CO). Fully transparent free markets are not only ruthless in controlling cost and rapidly responsive to consumer demands, but also bountiful in delivering high quality goods and services.
By re-engaging in the Obamacare debate, President Trump may have lit the fuse of a new health care revolution; a creative disruption driven by consumers’ direct control of health care dollars and genuine market competition.
Robert E. Moffit, PhD, is a Senior Research Fellow at the Heritage Foundation. Vivian Ernst of the Foundation’s Young Leaders Program contributed research for this article.
