Imagine tuning into a Sunday football game. Amid the flurry of touchdowns and tackles, the commercials are filled with familiar names — State Farm, Allstate, Liberty Mutual, and Farmers — vying for your dollars to cover your cars, homes, and personal liability. You have choices, and the competing advertisements are evidence of a robust marketplace where consumers benefit from price competition and innovation. But imagine if, alongside those ads, you could also shop for your health insurance — across state lines, no different than car or home coverage. Here lies a fundamental problem in American healthcare: you cannot buy most health insurance plans outside your own state. Unlike auto and home insurance, which have broad risk pools and interstate competition, health insurance markets remain balkanized, resulting in fewer choices and higher costs for consumers.
The roots of this uniquely American challenge date back to World War II, when the Franklin D. Roosevelt administration instituted wage and price controls to curb inflation. Employers, competing for talent but unable to boost salaries, began offering health insurance as a fringe benefit — a decision that intertwined employment and insurance in a way that persists today. At the time, it may have seemed like progress, but it has left countless Americans dependent on their employers for coverage. When jobs change, so does coverage, leaving those between jobs exposed and often without affordable options. Those ineligible for Medicaid — because their income is just above the cutoff — are especially at risk for being uninsured.
Decades later, the Affordable Care Act (ACA) of 2010, commonly known as “Obamacare,” sought to address the coverage and affordability crisis — most acutely faced by people with preexisting conditions who previously found insurance unattainable unless provided through an employer. The ACA succeeded in expanding insurance coverage to millions, particularly through Medicaid expansion and the establishment of insurance marketplaces. However, for those who do not qualify for federal subsidies, premiums and deductibles have soared. In many instances, families can face monthly premiums in the thousands, coupled with out-of-pocket costs so high that insurance feels more like catastrophic “coverage” than true protection. So while the ACA has done some good, it has not even come close to solving the affordability problem for which it is named.
The reasons for these persistent affordability issues are not mysterious. The underlying dynamics are straightforward, even as the system itself grows ever more complex. First, the ACA left state-level insurance monopolies untouched. Insurers still must navigate and adhere to rules that keep them within state lines, limiting the competitive pressure that could lower costs. Second, the oft-repeated promise from President Obama — “If you like your plan, you can keep your plan” — proved optimistic at best. The law introduced 10 “essential health benefits” that all compliant plans had to cover, forcing many consumers off less expensive plans that no longer met federal guidelines. As a result, they and many others have found themselves paying more for benefits they did not want or need, in effect subsidizing coverage for others. The state of California even brags that most of those who are subsidized are provided with “Silver” plans, but doesn’t say how this is on the backs of those who can only afford “Bronze” plans. This is due to how the subsidy thresholds and cross-subsidization mechanisms work, which is grossly unfair.
Third, the entire model of private health insurance negotiation keeps true prices obscured from patients. When a patient asks for the “cash price” for a procedure, providers often cannot answer because what any individual owes depends on secretive agreements negotiated between insurers and healthcare providers. This lack of transparency keeps patients in the dark and undermines genuine market discipline.
So why, after all these years, have costs continued to rise with little improvement in affordability? The answer lies in political paralysis and conflicting priorities. Democrats, many of whom see the ACA as a bridge to “single-payer” or “Medicare for All,” have settled for more federal entanglement in healthcare. They frame healthcare as a universal right; yet, rights in a constitutional sense do not compel one party to render goods or services to another. Insurance, whether for health or property, is fundamentally a contract — a product someone may buy, not an entitlement.
Republicans, for their part, have ardently opposed the ACA for over a decade, but rarely offer comprehensive, workable alternatives. Their efforts have focused on repeal rather than reform, missing opportunities to build consensus around real improvements in price transparency, portability, and increased consumer choice.
What might genuine reform look like? First, Congress should act to preempt state laws that prevent insurers from selling across state lines. This change would foster true competition, broaden risk pools, and, by analogy to auto and home insurance, drive down costs for most consumers. Second, policymakers should require transparent pricing from healthcare providers. Using the negotiated prices that already appear on every patient statement as a baseline, providers could set clear, upfront prices for services, allowing consumers to shop and plan accordingly. Third, the government should remove the “10 essential benefits” coverage requirement, letting consumers tailor plans to individual needs — just as with any other form of insurance — while maintaining the current requirement to cover those with preexisting conditions. High-risk pools, already used effectively in auto insurance for drivers with numerous or serious violations, could support those with extraordinary health risks without distorting the broader market.
In sum, addressing the high cost of American healthcare requires breaking up monopolies, shining a light on real prices, and empowering consumers to choose products that suit their needs, providing health insurance portability, and eventually ending employer-sponsored healthcare. Instead, employers could offer to cover or enhance existing employee policies as a fringe benefit, but the employee’s health insurance would no longer rely on any employer. Only then can Americans enjoy a health insurance marketplace as dynamic — and as affordable — as the ones that already exist for our cars and homes.
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Walter Myers III is a Southern California-based Senior Fellow at Discovery Institute.
The views expressed in this piece are those of the author and do not necessarily represent those of The Daily Wire.
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