Instead of a 'Public Option', We Need a 'Personal Option'

Health care is a mess—and our political leaders aren’t helping.

Presidential candidates only offer vague ideas to address our health care problems. From former President Donald Trump’s “concepts of a plan” to Vice President Kamala Harris’s flip-flopping between “Medicare for All” (i.e., abolishing private health insurance) and “expanding and strengthening the Affordable Care Act (ACA),” no candidate has articulated a clear path to more personalized, affordable care.

Meanwhile, soaring health insurance prices continue to plague families. Polls show nearly half of U.S. adults say it’s difficult to afford health care. One in four say they or a family member have had problems paying for medical expenses during the past year.

And it’s no wonder. The average monthly cost of health insurance coverage has increased 47 percent since the beginning of 2013, right before ACA took effect.

Similarly, out-of-pocket costs have also soared under ACA. Nationally, the average family health plan deductible has risen to more than $10,000 a year while access to doctors and hospitals shrunk dramatically.

This mess just gets deeper, which is apparent in battleground states like Pennsylvania.

For 2025, Pennsylvania health insurers are asking for an 8 percent premium increase for individual plans sold through Pennie, the state-sponsored online health insurance marketplace.

Clearly, something’s broken.

Unfortunately, Pennsylvania Gov. Josh Shapiro’s “solution” repeats the ACA’s failed approach: give more taxpayer money to health insurance companies to “buy down” average consumer premiums. Shapiro’s proposed “Exchange Affordability Program” would provide more than $40 million a year in taxpayer funds to health insurance companies that sell their products through Pennie.

But do health insurers need more handouts? This new spending would add to existing generous state and federal subsidies to the same insurers—some of which are among the most profitable companies in America.

Paying insurers more ignores the underlying forces driving prices upward.

Why are insurance prices rising? Ill-designed government subsidies, mandates, and regulations fuel market consolidation, resulting in less competition and fewer consumer choices.

The Federal Trade Commission states that 95 percent of American health care markets are “highly concentrated.” That’s certainly true in Pennsylvania, where a few big players, such as UPMC Health Plan and Highmark, effectively monopolize many markets.

So, what can be done?

First, doctors and hospitals should receive the same price for equal services. Under the current discriminatory rules used by Medicare and most private insurers (sometimes called “facility fees”), hospitals get paid more than outpatient facilities and doctors’ offices for the same service. This encourages hospitals to buy up those entities and capture higher insurance payments without adding value. Federal reforms to establish site-neutral pricing would counteract this consolidation and restore competition.

Next, Pennsylvania lawmakers must expand the successful reinsurance waiver, which reduced Pennie premiums by 4.6 percent in 2024. This reform better targets federal subsidies to citizens with the most expensive medical conditions. In several states with larger reinsurance programs, average premiums in the individual-purchase market decreased anywhere from 10 to 37 percent, depending on the location.

Finally, lawmakers must adopt reforms from the Health Care Fairness for All Act to fund patients, not insurance companies. If lawmakers converted open-ended subsidies, like those under the ACA, into generous fixed-amount vouchers, families could obtain the coverage they need. And families should be able to save what they don’t spend in a tax-free health savings account for future medical needs.

Moreover, lawmakers must protect affordable direct primary care (DPC) arrangements. DPC is like a Netflix subscription to your favorite doctors, with no extra fees, hidden charges, or insurance middlemen. In Pennsylvania, legislation like House Bill 886 would remove legal barriers to DPC, and add the Keystone State to the list of other states that embrace this model.

With these reforms, health care will be more like shopping at Amazon or Walmart—with a wider selection, clearly posted prices, and fast, quality service. Competing providers will either please customers or go out of business.

Consumers don’t need another “government option”; they need a “personal option.”

With a personal option, people would still need—and have—health insurance. But it would be affordable, tailored to their needs, and stay with them when they change jobs.

Our current health care policies are failing Pennsylvanians. The Shapiro approach of shoveling taxpayer money at health insurance companies would only compound the problem and shift costs onto taxpayers.

Instead, let's empower Pennsylvanians and all Americans to take control of their health care.

Elizabeth Stelle is Director of Policy Analysis of the Commonwealth Foundation, Pennsylvania’s free-market think tank. X: @ElizabethBryan.