It certainly doesn’t feel this way at times, but we have never been closer to a true free-market health care revolution than we are right now.
Thanks to an executive order (EO) signed by President Donald Trump, proposed legislation by Sen. Ted Cruz (R-Texas) and Rep. Chip Roy (R-Texas), and existing medical savings account law, we could be witnessing a free-market makeover of health care that delivers better care at lower prices.
Now, some may incorrectly think that we already have a free-market system in health care. This is clearly not the case, however, as centrally controlled pricing and extensive crony systems are rampant, shackling Americans with the most expensive and complex health care system in the world. Despite this dysfunction and the efforts of entrenched special interests, the United States is on the precipice of substantial reform.
Trump started the first stages of America’s health care revolution last June. That’s when he introduced the “Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First.” The order requires medical providers to disclose their prices to patients prior to the delivery of non-emergency services. This price information is crucial for patients to enjoy the most basic aspect of a free market: price shopping. The EO also clarified the use of health savings accounts (HSAs) for some of the most cost-effective medical practices: direct primary care (DPC) providers.
Cruz’s and Roy’s Personalized Care Act (S. 3112 and H.R. 5596) perfectly complements the EO. This innovative legislation would expand the use of HSAs, realizing their full potential. The bills would allow these pretax accounts to buy now-transparently priced services. By doing so, medical service providers would have to compete—improving quality and price to remain profitable. If not, better and more efficient providers will win their business. Unlike the current system, which works to maximize each service’s price, the EO and the Personalized Care Act would unleash a feverish race to offer the best service at the best price. All patients would benefit.
Additionally, the Personalized Care Act would free the 158 million Americans who obtain their insurance pretax through an employer. How? By providing them with the ability to purchase the insurance coverage of their choosing with pretax HSA dollars. That would create tax parity between individually owned policies and those provided through employers for the first time since the 1940s.
The 23 million Americans who already buy their own policies with after-tax dollars and the 27 million uninsured Americans would have the same opportunity to maximize HSAs and save hard-earned money. Using pretax HSA dollars reduces the out-of-pocket costs of these policies. It’s like a de facto subsidy that, unlike the Affordable Care Act (ACA), isn’t funded with other people’s money.
The Personalized Care Act does even more. It would codify in law what the EO initiated—the ability to use pre-tax HSA dollars for direct medical services. This move would be another victory in health care’s free-market revolution.
Free-market reform could even affect Medicare by increasing the use of Medical Savings Accounts (MSAs). MSAs already provide Medicare recipients access to, and control over, the dollars that they have contributed to the Medicare system. Under MSA Medicare plans, recipients can control Medicare-funded dollars in HSA-like MSA accounts. These accounts give the 44 million patients on Medicare the power to shop for and choose their own care. Seniors don’t need to seek the authorization of unaccountable bureaucrats to make what could be life-or-death decisions.
Combining Trump’s EO, the Personalized Care Act, and existing MSA law could directly open all Americans to a free-market revolution—transforming our wasteful health care system into a marketplace of efficient, competing services that provide high-quality care at lower prices.
Chad Savage, M.D. is a D4PCF policy fellow and the founder of the DPC practice YourChoice Direct Care in Brighton, Michigan.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.