Five Ideas to Improve the House Healthcare Plan

The U.S. healthcare system is deeply dysfunctional, bogged down by runaway government spending, bizarre regulatory carveouts, and price controls supported by both parties. Proposed “fixes” are a dime a dozen but regularly fall apart on close inspection. Unfortunately, the Lower Health Care Premiums for All Americans Act released by House Speaker Mike Johnson (R-La.) is just the latest in a series of disappointing congressional proposals that fail to meaningfully reduce federal intervention in healthcare.

To its credit, the 111-page bill expands access to Association Health Plans (AHPs) by permitting employers and independent contractors to use group buying power to negotiate for lower rates. The bill also allows self-funded insurance plans to purchase stop-loss insurance to protect themselves against catastrophically-high claims. However, the bill fails to expand Health Savings Account (HSA) eligibility or pave the way for much-needed regulatory reforms. And while the bill laudably leaves out enhanced Affordable Care Act (ACA or “Obamacare”) subsidies, the proposal reinstates direct payments to insurers known as “cost sharing reduction” (CSR) payments.

The Taxpayers Protection Alliance (TPA) has been closely following the healthcare debate and has five commonsense suggestions that would greatly strengthen the House proposal. Patients across the country deserve a better approach than the failed status-quo.

1. End Obamacare’s Cap on Physician-Owned Hospitals.

Prior to the passage of the ACA, the concept of doctor-owned hospitals was rapidly growing in popularity. The number of these institutions proliferated from less than 70 across the country in 2000 to about 250 by 2010. Obamacare brought this trend to a sudden halt by effectively barring the opening of new physician-owned hospitals.

Not surprisingly, this barrier to entry has resulted in significant artificial consolidation and correspondingly higher prices and lower standards of care. As the American Medical Association has pointed out, research has shown that prices at physician-owned hospitals are about a third lower than those at traditional hospital prices.

When allowed to operate, free markets reward innovative business models that cost consumers less than their traditional counterparts. When that innovation is blocked by force of law, it’s no surprise that consumers suffer as a result. It’s time to end this reckless restriction and allow for new doctor-owned hospitals to serve patients.

2. Permit Employers to Use Surplus Pension Funds to Finance Healthcare.

Existing regulations currently prohibit employers from using surplus pension assets to fund employees’ healthcare needs, even when those plans are funded well above their liabilities. Sen. Tim Scott (R-S.C.)’s Strengthening Benefit Plans Act of 2025 would allow companies with a surplus of pension funding to re-invest those additional resources to support the medical expenses of active employees.

This proposal would allow employers with plans with funding exceeding 110 percent of liabilities to allocate part of that surplus to help offset the rising cost of employee health benefits. Critically, the change maintains full pension funding and protects retiree benefits.

In July, TPA and seven other free-market and limited-government groups signed a coalition letter to the House and Senate urging them to include this legislation in the One Big Beautiful Bill (OBBB). While that effort was unsuccessful, TPA will be sending another letter to Congress to urge them to include this language in any healthcare reform efforts.

3. Allow all Americans Access to HSAs.

More than 60 million Americans enjoy the benefits of HSAs, which are tax-free savings accounts that can be used for qualified medical expenses alongside certain high-deductible healthcare plans—or certain “bronze” and catastrophic plans available through Obamacare exchanges. Direct Primary Care arrangements are now also HSA compatible thanks to reforms included in the OBBB.

Yet, many millions of Americans who would like to contribute to HSAs, cannot because their healthcare plans are not eligible to be paired with HSAs. Additionally, many HSA holders cannot effectively use their accounts because of strict contribution limits— $4,400 for individuals and $8,750 for families.

Introduced by Sen. Rand Paul, MD (R-Ky.), the Health Marketplace and Savings Accounts for All Act would expand HSA access to all Americans regardless of their health insurance plan (or lack thereof), raise the maximum annual HSA contribution to $24,500 for 2026, and expand access to already-mentioned AHPs. The House should incorporate Sen. Paul’s proposal into their own.

4. Right-size Pharmacy Benefit Manager (PBM) Reform.

Pricing practices by PBMs—third-party companies that manage prescription drug benefits for health insurers—have led to higher costs for taxpayers and patients. These middlemen have made a pretty (taxpayer) penny by charging taxpayer-funded government insurers like Medicare and Medicaid more than they pay to procure medications and pocketing the difference. The task for lawmakers is a tricky one: crack down on these practices as they apply to government programs (and taxpayers by extension) without resorting to industry-wide rules that would raise costs on the entire healthcare sector.

Recent bipartisan legislation by Sens. Mike Crapo (R-Idaho) and Ron Wyden (D-Ore.) achieves this balancing act by focusing reforms on interactions between PBMs and Medicare and Medicaid. Their bill would, among other things, require greater participation in the National Average Drug Acquisition Cost survey to ensure accurate Medicaid payments to pharmacies and increase PBM reporting requirements to Medicare Part D plan sponsors.

In contrast, the House healthcare reform proposal increases PBM reporting requirements across the entirety of the healthcare industry, threatening to increase costs and bolster bureaucracy. Speaker Johnson should take a page (or 79 pages) from Sens. Crapo and Wyden and right-size the scope of PBM reform.

5. Nix CSR Payments.

In the early days of Obamacare, the federal government would pay large insurance companies about $7 billion per year to provide low-income enrollees with low-deductible plans. In 2017, President Trump rightly called these payments “BAILOUTS” and ended these payments.

Since then, groups including the Kaiser Family Foundation have claimed that bringing back CSR payments would actually lower deficits. The crux of this claim is that, after CSR payments were cut off, insurance companies responded by increasing prices of “silver” (mid-tier) plans on Obamacare exchanges. Obamacare pays out subsidies based on the price of the second lowest-cost silver plan in a marketplace. Insurance companies quickly learned that they could recoup—and then some—any money they lose from CSR elimination by a) increasing prices of silver plans; and b) sitting back as plan subsidies automatically increase as a result.

The solution to this perverse game, though, is not to kowtow to insurance companies (as the House plan does) by bringing back CSR payments. Rather, lawmakers should let any enhanced Obamacare subsidies expire and transfer all remaining means-tested subsidies to Americans’ HSA accounts. This—coupled with Sen. Paul’s reforms outlined above—would delink any subsidies from insurance companies and let Americans shop around for the healthcare of their choice. Policymakers should not take as a given that taxpayers will fork over money to big insurance companies.

Conclusion

These suggested reforms by TPA are just the beginning. TPA has identified three additional strategies here—in addition to many more—that would lead to increased choice and competition and lower costs across healthcare markets. If Speaker Johnson is serious about reforming the healthcare system, TPA is eager to help.