Health care reform starts with insurers
Every president promises to fix health care, but the system rarely seems to change for the better. Even when so-called reforms pass, prices remain unpredictable. Costs continue to rise. If President Trump wants to succeed where others have failed, he’ll need to target the gargantuan insurance companies that lie at the intersection of every other aspect of the health care system.
Insurers — not patients and their doctors — are the ones that ultimately determine what treatments and procedures patients can receive, which providers they can see, and what they ultimately pay. While we often take this arrangement for granted, it is the defining feature of a broken market.
Take prescription drug prices. Even if manufacturers lower drug prices in a bid to increase their market share, what patients pay is still dictated by insurers, who could easily choose to pocket the savings and hold patient copays steady.
Indeed, pharmacy benefit managers, or PBMs — the insurer-affiliated middlemen that decide which drugs are covered — have a long track record of steering patients toward unnecessarily expensive medicines in order to reap larger profits. In 2024, the House Oversight Committee identified over 1,000 instances of avoidable drug cost increases due to PBMs.
Or consider access to tests, scans, and minor surgeries. A doctor might decide that a new test offers the best chance of helping a patient, only for the patient to find their insurer disagrees and it’s not covered. In 2023, insurers on the ObamaCare exchanges denied roughly one in five in-network claims and over a third of out-ofnetwork claims.
Americans are paying more than ever before for health insurance — since ObamaCare became the law of the land, premiums have more than doubled — but only because they have no other choice.
The current system routes virtually every routine transaction through insurers, despite the fact insurers’ interests typically conflict with the interests of patients and providers. To leave a lasting mark on the health care system, President Trump will need to break insurers’ stranglehold and restore consumers’ ability to make free and informed choices about the care they pay for.
The first step is cutting the bloat. Last year alone, ObamaCare ate up nearly $140 billion in taxpayer dollars as waste, fraud, and abuse have mounted. In 2024, insurers were estimated to receive over $40 billion in subsidies for patients who didn’t file a single claim.
The second step is promoting market-based alternatives that give patients control, like health savings accounts paired with high-deductible or catastrophic coverage insurance plans. Health savings accounts allow patients to save up money for health expenses tax-free, then use those funds to pay for routine care. High-deductible and catastrophic care plans offer the protection that people want from truly serious health challenges but come with substantially lower premiums than traditional plans.
Popularizing these types of plans would enhance patients’ freedom and incentivize them to shop around for routine care. In turn, that’ll force providers to compete on price and quality.
House Republicans recently held hearings with health insurance CEOs on the untenable status quo. And President Trump has announced his intentions to pressure insurance CEOs to change their corporate behavior.
If this administration, and its allies in Congress, want to succeed where others have failed, it must use the next three years to reform the bloated insurance system that has distorted health care for so long.
Robert Goldberg, PhD, is co-founder and vice president of the Center for Medicine in the Public Interest.
