By Lori Lee
NDG Contributing Writer
As American healthcare spins out of control, twenty million Americans covered under the Affordable Care Act (ACA) face premiums so high, many may drop coverage, the New York Times reporting over one million have already done so. Faced with a serious health issue or injury, many will have no support.
All this is occurring in the context of a dramatically growing budget for Immigration and Customs Enforcement (ICE). As Americans continue to protest ICE actions, a growing number of democratic lawmakers are vowing to vote against the Department of Homeland Security funding bill, threatening a partial shutdown and blocking ICE funding, reported the Washington Post. Several Republican lawmakers have also called for a transparent investigation into recent ICE shootings and a hard look into federal agent strategies, Time Magazine reported.
As some Republican lawmakers start to steer from their charted course, Americans are trying to keep their heads above water when it comes to their healthcare. One out of every five dollars is spent on care in the U.S. today, as medical costs grow more expensive than housing and food. Many will certainly forgo necessities, as premiums, copays and deductibles rise, taking up a greater proportion of incomes to deal with injuries and illness.
Many have chosen to drop to less expensive plans, said health care advocate and Executive Director of Families USA, Anthony Wright, speaking at an American Community Media briefing. Even the lower-tier plans can save overall healthcare costs by providing crucial preventative care, while saving some from bankruptcy during a catastrophic illness.
His organization and many others have been working to avoid an imminent health catastrophe, and their fight is still on.
“We will continue our efforts to extend these tax credits to find a way to get the Senate to pass a clean extension, just like the House did,” said Wright.
After repeatedly rejecting the measure and as bipartisan support for the credits became more visible, a total of 17 Republican House members impressively crossed party lines, pushing through a clean, three-year extension. The credits, which had capped premiums at 8% of income, with even lower caps for certain wage brackets, expired in December, leaving baseline ACA subsidies in place while cutting protections for people 400% below poverty level.
Senators will soon consider the House measure but are expected to add minimum premiums and restrictions on income and abortion, according to the Washington Post.
With bipartisan support for the subsidies, the bill’s failure to pass the Senate could hurt Republicans by up to 15 points in competitive districts, according to some pollsters, American Health Insurance Plans (AHIP) reported.
Some states are stepping in—New Mexico, passing additional subsidies to make up for the expired credits, Colorado, California, and Maryland providing some subsidies, Kaiser Family Foundation, (KFF) reported. This, as California, Illinois, and Minnesota dropped or limited coverage for unauthorized immigrants due to limited state budgets.
As people fall off insurance plans, uncompensated care in emergency rooms will mean higher premiums for everyone, including the privately insured, said Wright. Stanford economics professor and researcher at the National Bureau of Economic Research, Dr. Neil Mahoney, agreed, noting, as people are pushed off Medicaid and grow more unhealthy, costs will increase over the entire system.
Premiums and deductibles have risen, driven by high prices. It is hard on businesses, especially the small businesses that are struggling to provide insurance for their employees. Employee insurance rates have increased much faster than wages, provoking businesses to make tough decisions— lower wages, reduce hiring, lay off workers, or drop employee insurance altogether. And without coverage, people struggle to show up focused at work, and productivity suffers, said Mahoney.
The high costs also affect the federal budget, he said, the U.S. government covering about 50% of American healthcare costs and making up one-third of the total federal budget.
Americans have a different mix of health problems, consuming different healthcare services, with 90% of costs going to chronic conditions. Yet, the most important driver of overall health costs is high prices, said Mahoney. From drugs to hospital care, we pay more than almost any other country, growing from about 5% of Gross Domestic Product (GDP) in 1960 to 18% in 2024. Americans now spend twice the percentage of GDP on healthcare compared to other countries.
“You can see this if you’ve looked at a hospital bill or if you’ve been to CVS to pick up a prescription, that the prices just don’t really make sense,” said Mahoney.
And drug costs, though not a huge fraction of government health expenditures, are “a huge pain point for everyday Americans.”
One in three Americans cannot afford their prescriptions, noted Meredith Basie of Patients for Affordable Drugs, and they pay between 4 and 8 times more than other high-income countries.
Many countries negotiate drug prices, noted Basie, though the powerful American pharmaceutical industry has prevented Medicare from negotiating prices for over 20 years despite that they negotiate on every other Medicare purchase, she said.
Congress finally permitted negotiations in legislation enacted during the Biden Administration, this January marking a significant milestone, as the first 10 most expensive and commonly used drugs received their negotiated 63% price reductions. This makes crucial insulin, diabetes, cancer, and immunotherapy medications, more accessible to a greater number of Americans.
Prior to the Inflation Reduction Act (IRA), people on expensive cancer medicines had been met with tens of thousands of dollars in co-pays. Now, Medicare recipients are capped at $2,000 a year for drug expenses, allowing more people to access the life-saving drugs they need.
Americans will continue to see price drops. The Trump Administration has negotiated additional reductions, saving consumers 63% on another list of drugs thanks to the 2022 legislation.
Yet, as Mahoney pointed out, exciting developments in healthcare technology and drugs, turbocharged by artificial intelligence, should bring prices down for everyone and not just those on Medicare.
American drug companies combine to form a powerful force. Well known for abusing the patent system, they manipulate the system in many ways to ensure they maintain their monopolies and prevent competition. One maneuver is to delay generics from hitting the market, sometimes paying generic drug companies for delays. This puts on hold price reductions that would save Americans 39% on average and up to 95% with five to six companies in competition.
Other market forces that affect the price is the supply of labor. Though healthcare job growth has driven the economy for about a year now since healthcare job losses during the pandemic, the U.S. still needs a greater supply of workers, said Mahoney, especially in rural and underserved areas. Current restrictions on nurses and advanced professionals and caps on doctors and training in these areas, suppress supply. These caps should be lifted, he said.
Expanding Medicare would also affect costs through the market by reinforcing competition. Medicare, an incredibly strong and efficient system, partly due to its negotiating power, could provide coverage for a greater number of Americans, effectively disciplining the market.
Medicare expansion, as a solution, is even accepted by economists typically skeptical of price controls, said Mahoney.
Antitrust agencies can also strengthen the market by countering unfair practices like “roll-ups,” where private equity firms buy up small health offices and monopolize prices, noted Mahoney. These reforms will help make markets more competitive, which is key to reducing costs, he said.
Mahoney urges that if the Senate passes an extension of the tax credits, it should be only an entry point to healthcare reform and not the end of the conversation.
The good news, said Basie, is there are programs that work very well, from Medicare to drug price negotiation, but it’s not easy.
“It takes sort of everybody rowing in unison to bring the fight to the people with their hands in the cookie jar.”
