The healthcare market is anything but free. Patients are disconnected from the prices of routine care and have limited insurance options due to government coverage mandates. Those same mandates inflate prices and distort the market. Without deep reforms to the health insurance system, healthcare costs will continue to rise.
Several bills would make modest improvements, including proposals from Sens. Bill Cassidy and Mike Crapo and another from Rand Paul, all Republicans. Each would move the system slightly closer to a functioning market but fall short of addressing the structural failures driving high healthcare costs.
The proposals expand access to Health Savings Accounts (HSAs), which provide tax-advantaged funds to pay for medical care. The Cassidy-Crapo bill would redirect money now sent to insurers — through the Affordable Care Act subsidies for bronze and catastrophic plans — directly to individuals. Insurers would no longer receive subsidies automatically; they would have to compete for enrollees to obtain those dollars.
Pairing HSAs with low-cost catastrophic plans would also help restore insurance to its traditional role: protection against unexpected and expensive medical events, rather than a prepayment mechanism for routine care. When coverage focuses on emergencies rather than everyday services, patients have an incentive to compare providers’ costs and quality, just as they do for other shoppable services.
Paul’s bill similarly expands HSAs by allowing anyone with any insurance plan to qualify. Today, HSAs are limited to people with high-deductible health plans. This bill would eliminate that restriction and substantially increase annual contribution limits, starting in 2026, giving households greater incentive to save for medical expenses.
Expanding HSAs alone will do little to reduce costs if patients remain excluded from decisions about their routine care. If underlying prices remain opaque, HSAs simply shift funds to a different account without changing the information or prices patients face. HSA expansion is more effective when paired with policies that strengthen patients’ ability to purchase medicines directly and to see upfront prices for routine hospital services.
Direct-to-consumer pharmaceutical sales reintroduce price competition by allowing manufacturers to sell directly to patients, bypassing insurance and pharmacy benefit managers. When patients can see the actual price of both name-brand and generic medications, they can make simple price comparisons and choose lower-cost options. Some companies have begun moving in this direction, but Congress can create a clearer legal framework to help these efforts.
Hospital price transparency is further behind. The administration required hospitals and insurers to publish comprehensive price lists for 300 healthcare services. Yet, hospital compliance has lagged. Earlier this year, President Trump issued an executive order directing the Treasury, Labor, and Health and Human Services departments to enforce these rules more aggressively. Even so, most patients still don’t know what their care will cost until after a hospital visit.
Patients can’t shop for affordable care if they cannot see the prices. Upfront prices are not feasible for complex or evolving medical situations, but many routine services don’t fall into that category. Hospitals already have the data to set predictable, up-front prices for common procedures performed millions of times nationwide, including imaging, routine childbirth, joint replacement and standard outpatient surgeries.
Paul’s bill contains incremental improvements, but expanding HSAs alone addresses only part of the fundamental disconnect between patients and prices that has stripped healthcare of the competitive pressures that lower costs and improve quality. Restoring market discipline will require not just empowering patients with HSAs but also enabling direct purchase of medicines and enforcing upfront pricing for routine hospital care.
