Subsidies won’t fix America’s health care ‘crisis’

Health insurance premiums are rising in 2026 into the “even more unaffordable” range, with average increases on Affordable Care Act exchange plans of roughly 30 percent. Out-of-pocket costs are doubling for many families with pandemic-era enhanced subsidies expired. Employer-sponsored family coverage now costs nearly $26,000 per year.

We are paying more than ever for health insurance, yet wait times keep increasing and access to care continues to deteriorate. That is not a mystery. It is the predictable result of policies that empower systems over people.

Democrats’ instinctive response to rising premiums is to revive expired Obamacare subsidies. That instinct is understandable politically but indefensible economically and medically. Republicans dither, offering sops to media hysteria like $1,500 payments. 

Congress already decided the subsidy issue. The “enhanced” Affordable Care Act premium tax credits enacted to compensate for COVID lockdowns expired by law at the end of last year, although the original subsidies remain in place. Calls to restore the enhanced credits are not about lowering costs; they are about hiding expenses and scoring political points.

To understand why this debate keeps repeating, it helps to explain how ObamaCare subsidies actually work. Most Americans never see the money and therefore never experience the perverse incentives our health care system creates. 

Under ObamaCare, premium subsidies are advanceable, refundable tax credits tied to the price of a government-defined benchmark insurance plan. Consumers never receive these dollars — instead, the federal government sends the money directly to insurance companies each month, leaving enrollees responsible for a small remaining share of the premium, plus copays. This structure, explained in the Kaiser Family Foundation’s overview of premium tax credits and the Congressional Research Service description, ensures that Washington — that is, taxpayers — will pay insurers’ higher (and higher) premium rates.  

The pandemic-era “enhancement” of premiums intensified this arrangement by removing the income cap and lowering the share of income that households were expected to pay. As premiums rose, subsidies rose automatically. When those expansions expired, families suddenly saw the true price of coverage. Data on 2026 Marketplace plans show insurers raised premium rates by 26 percent to 35 percent. Many households will experience out-of-pocket increases exceeding 100 percent with the sunset of enhanced subsidies. 

This outcome was no accident — it was a feature. When subsidies rise in lockstep with premiums, insurers have no reason not to raise prices. Consumers, shielded from true costs, have no reason to save money by shopping. Economists describe this as a subsidy-price feedback loop. Politicians then declare (and the media hypes) the “crisis.” They demand more subsidies, locking the cycle in place. Taxpayers foot the bill. Insurers make more money. Policyholders get nothing.

The same perverse incentive structure dominates employer-sponsored insurance. In 2025, the average annual premium for employer-sponsored family coverage reached $25,572, according to the Kaiser Family Foundation’s Employer Health Benefits Survey. That money is not generosity from employers. It is earned wages that workers never receive. Rising premiums show up as lower wages, fewer benefits and slower income growth. 

Higher prices might be tolerable if access were improving, but it is not. Physician appointment wait-times are getting longer nationwide, particularly for primary care and specialty services, according to national data from AMN Healthcare. Patients can wait months to be seen. In extreme cases, Americans die while waiting for care — a phenomenon widely described as death by queue in systems dominated by centralized payment and government control. 

Doctors are not immune. Independent practices are closing, forcing physicians to join large, bureaucratically run group practices. Physicians are burning out under paperwork, prior authorization requirements and regulatory compliance. Regulatory costs exceed $2 trillion annually — half of all U.S. healthcare spending. Every hour spent navigating bureaucracy is an hour not spent with patients.

Some policymakers argue that price transparency will fix these problems. But transparency would help only if consumers had real choices and control over spending. Publishing prices in a system where insurers and government dominate does not restore competition. 

The better instinct is to change who controls the money. President Trump has argued that policymakers should “give the money to the people” rather than insurance companies. From an economic perspective, ownership matters. When consumers control dollars, providers compete. When government controls payment, prices rise and access shrinks. 

But consumer control cannot be layered on top of expanding subsidies and regulatory overload. Real reform requires changing the money flow itself. Patients should control their own health care dollars. Providers should compete for patients’ dollars rather than comply with bureaucracies. Insurance should return to its original purpose of protecting against major, unexpected expenses rather than prepaying routine care and predetermining prices for specialty care.  

That is the core idea behind the Empower Patients approach, realigning incentives, restoring competition and allowing health care to function like every other sector where consumers, not politicians or bureaucrats, are in charge. 

Congress already let the enhanced subsidies expire. That decision created political discomfort, but it also created an opportunity. Lawmakers can either double down on policies that overcharge families and ration care, or they can pursue reforms that finally let patients prosper. 

Deane Waldman, M.D., MBA, is professor emeritus of pediatrics, pathology, and decision science; former director of the Center for Healthcare Policy at Texas Public Policy Foundation; former director of the New Mexico Health Insurance Exchange; and author of 14 books, including “Empower PATIENTS – Two Doctors’ Cure for Healthcare.” Vance Ginn, Ph.D., is president of Ginn Economic Consulting, and previously chief economist of the White House’s Office of Management and Budget. He co-authored “Empower PATIENTS” with Dr. Waldman.

https://thehill.com/opinion/healthcare/5673507-rising-health-insurance-premiums/