Republicans advocate for high-deductible plans paired with health savings accounts
Senator Bill Cassidy, a Republican from Louisiana, spoke at a Washington, D.C. hearing about a plan to redirect government funds from ACA premium subsidies toward Americans’ health savings accounts. The goal is to empower individuals to fund their own care rather than rely on subsidies to insurance plans. Photographer Kevin Dietsch captured the moment; the image is included with coverage.
Sarah Monroe’s story illustrates the stakes. Once living a comfortable middle-class life near Cleveland, with a six-figure income and employer-sponsored health insurance, she began to notice troubling health issues four years ago during a pregnancy with twins. Recurrent emergency room visits for fainting and other symptoms led to a diagnosis of a potentially dangerous heart condition. The medical pathway ahead proved costly. Within a year, as she balanced caring for newborn twins and treating her illness, Monroe accumulated more than $13,000 in medical debt.
Her burden was partly a result of a high-deductible health plan that required paying thousands out of pocket before coverage started. Over the past two decades, these plans have become more common, and they’re now drawing renewed attention from President Trump and several GOP lawmakers who oppose broad subsidies for ACA plans.
Although Republicans have not coalesced around a single alternative, several top party figures support a model in which Americans without employer-provided insurance receive direct government funds deposited into a special health savings account, paired with a high-deductible plan. In this setup, individuals could select a marketplace plan that costs less monthly but carries an annual deductible that can exceed $7,000 for an individual.
“The patient makes the decision,” Cassidy stated at the hearing, emphasizing the idea that consumer choice can drive down costs. In a public post on Truth Social last month, Trump echoed a similar sentiment, writing that he would only endorse or approve healthcare measures that directly return money to the people.
The concept of patient “skin in the game” is a familiar refrain among conservative economists and GOP lawmakers who have championed high-deductible plans since they gained traction roughly twenty years ago. The argument, rooted in a backlash against HMOs, led many employers to shift workers into plans designed to give patients greater control—and cost-conscious incentives. A tax change later allowed patients to tuck money into tax-free health savings accounts to cover medical bills.
The premise is straightforward: when consumers have “skin in the game,” they will seek higher-quality care at lower prices. Yet, as Shawn Gremminger of the National Alliance of Healthcare Purchaser Coalitions notes, the expected outcome has not fully materialized.
Nowadays, most health plans include a deductible, with the average single worker with employer-based coverage facing about $1,700 in out-of-pocket costs before coverage kicks in, up from roughly $300 in 2006. For those with deductibles above $1,650, a tax-free health savings account can be paired to help cover expenses.
Despite the rise of deductibles, medical costs in the United States have surged. For example, the average price of a knee replacement rose by about 74% from 2003 to 2016, outpacing general inflation. Meanwhile, millions of insured Americans still incur substantial medical debt—roughly 100 million people in the U.S. reported some form of healthcare debt in a 2022 survey.
Shopping for medical care remains challenging. Monroe, despite having an HSA tied to a high-deductible plan, could not save enough to cover major bills when her twins were born or when she faced serious illness. She describes paying medical bills as effectively impossible.
Another obstacle is price comparison in medical services. Federal rules now require hospitals to disclose more pricing, which helps, but unlike buying a car or a computer, many medical decisions arise from emergencies or chronic conditions that unfold over years. Research from the Health Care Cost Institute indicates only about 7% of total healthcare spending for those with job-based coverage consists of services that can realistically be shopped for.
oncologist Fumiko Chino of MD Anderson argues that it’s not practical to expect cancer patients or others with chronic illnesses to shop for prices after a diagnosis. The urgent need to begin treatment often leaves little time for price shopping, especially for complex procedures like surgery, radiation, or chemotherapy.
Monroe’s experience reflects the deeper consequences. She and her family had to relocate to a smaller apartment, exhausted savings, saw her credit score plummet, and even lost a vehicle to repossession. While her children remain healthy and she continues to work, Monroe questions why the healthcare system would double down on a high-deductible model.
Her story underscores a broader concern: the current approach leaves many people vulnerable to mounting medical debt and insufficient protection when illness strikes. Proponents of alternative models argue for direct, government-supported funding into HSAs paired with high-deductible plans to encourage personal responsibility and lower premiums, while critics warn of heightened financial risk for patients facing serious illness. The debate continues as policymakers weigh the trade-offs between affordability, access, and the sustainability of health coverage. For now, the question remains: Is this the right path to ensure both reasonable costs and comprehensive protection for all Americans?
