Nine Reform Ideas to Improve the ACA Status Quo

As Thanksgiving approaches (and we offer a recipe for a tasty dish below), it is worth expressing gratitude for everyone working to make our health care system more affordable, transparent, and responsive to families. Many dedicated individuals in Congress, in the Trump administration, and across the country are working to expose failing health care policies and advance reforms that improve Americans’ well-being. Last week’s testimony before the Senate Finance Committee was an opportunity to advance that effort by outlining why Congress should not extend the COVID-era ACA subsidy boosts and by offering nine reforms that would lower premiums, expand options, and reduce federal power and spending.

In the testimony, I made the case that continuing the expanded subsidies would entrench a deeply flawed structure, dramatically raise federal spending, penalize workers with employer-sponsored insurance, incentivize employers to drop coverage, lead to massive waste and fraud, and drive long-term health care prices and premiums even higher. Here is a PBS News Hour segment from last week where I explain why extending the COVID-era subsidy boosts would deepen existing problems and increase long-term federal costs. (The segment also features a progressive voice acknowledging the significant fraud in the program.)

As Congress weighs how to address rising premiums, shrinking choices, and escalating federal costs, the following nine recommendations provide achievable, targeted reforms that would improve affordability and expand choice. (See the testimony for a more robust explanation.)

Affordability Idea No. 1: Appropriate CSR Payments

Congress should appropriate cost-sharing reduction (CSR) payments. Because the ACA lacked a valid appropriation, a federal court ruled that the Obama administration was making illegal payments to insurers. The Trump administration halted those payments. Insurers responded by “silver loading,” deliberately raising silver premiums which increased federal premium subsidy spending since the subsidy is linked to a silver plan. A CSR appropriation would reduce silver plan premiums by roughly 12 percent, lower overall ACA subsidization by tens of billions of dollars, and restore the law’s original subsidy design.

The following table shows the state premium reductions that would result from a CSR appropriation, and here is an explainer on Paragon’s HSA Option, which includes a CSR appropriation. These state-by-state estimates show how a CSR appropriation would deliver immediate premium relief nationwide, with an average $900 decrease for a single 40-year-old adult.

Affordability Idea No. 2: Create the HSA Option

Congress should allow eligible exchange enrollees to take their CSR subsidy as a deposit into a health savings account (HSA) rather than as reductions in insurer-controlled cost-sharing. This HSA option approach empowers patients by giving families direct control over the subsidy and the flexibility to use funds for dental, vision, mental health, and out-of-network services. Independent modeling by the actuarial firm Milliman shows nearly 70 percent of enrollees would be better off selecting the HSA option, accumulating up to $2,000 per year for future health care needs.

Affordability Idea No. 3: Make HSAs More Flexible and Accessible

Congress should modernize HSA eligibility rules to allow more plan designs to qualify. Current HSA requirements force plans into rigid high-deductible structures that often restrict pre-deductible coverage and reduce access for people with chronic conditions. Linking HSA eligibility to actuarial value standards, rather than strict deductible thresholds, would broaden consumer choice and enable families to use tax-advantaged dollars more effectively.

Affordability Idea No. 4: Address the ACA’s Inflationary Subsidy Structure

Congress should reform the ACA’s inflationary subsidy design by capping the benchmark used to calculate premium subsidies. Today, subsidies rise dollar-for-dollar with premiums, insulating enrollees from costs and giving insurers little incentive to restrain prices—especially in highly concentrated markets. Setting the benchmark at 125 percent of the national average premium would prevent states and insurers from inflating premiums to extract larger subsidies while still allowing for reasonable geographic variation.

Affordability Idea No. 5: Expand Access to Short-Term Health Plans

Congress should improve access to short-term limited-duration insurance (STLDI) as an affordable option for consumers who lack generous ACA subsidies by codifying a 2018 federal rule that permitted plans for up to three years. Short-term plans typically offer far lower premiums, substantially broader provider networks, and greater overall value for many middle-class families. Evidence shows that these plans do not harm the ACA risk pool; states that permitted short-term plans between 2018 and 2023 experienced stronger individual market enrollment, slower premium growth, and greater insurer participation.

Affordability Idea No. 6: Allow Small Employers to Form Association Health Plans

Congress should permit small employers to band together through Association Health Plans (AHPs), allowing them to obtain the same economies of scale and regulatory advantages enjoyed by large firms. Early AHPs formed under a 2018 Department of Labor rule delivered generous benefits and premiums below ACA plans, with strong participation among small businesses. CBO projected that expanded AHPs could cover up to 4 million people—without new federal spending—but litigation halted the rule, making congressional action paramount to revive these gains.

Affordability Idea No. 7: Unleash ICHRAs

Congress should codify and expand Individual Coverage HRAs (ICHRAs)—a way that employers can offer coverage by providing a tax-preferred contribution that workers use to purchase individual market coverage. In a 2019 federal rule that expanded ICHRAs, the federal government predicted ICHRAs would now cover more than 10 million people. Uptake has lagged largely because the individual market remains unattractive—featuring high premiums and narrow networks—and because expanded ACA subsidies crowd out employer-provided options.

Affordability Idea No. 8: Expand and Enforce Price Transparency

Congress should strengthen enforcement of hospital and insurer price-transparency requirements and impose meaningful penalties for noncompliance. Transparent prices enable consumers to shop for value, help employers implement more efficient payment models such as reference pricing, and expose the large—and often unjustified—price variations within markets. Compliance with existing regulations has been uneven, and stronger enforcement is essential to unlocking the competitive benefits transparency is intended to deliver.

Affordability Idea No. 9: Expand Access to Catastrophic Plans

Congress should allow all Americans to purchase catastrophic health plans, removing the ACA’s arbitrary restrictions on age. Recent federal guidance will expand eligibility in 2026 for individuals of any age who are ineligible for CSR subsidies, but this step remains too limited. Making catastrophic plans widely available would give consumers more affordable protection against major expenses and allow families more options to select coverage that aligns with their needs and preferences.

Together, these nine reforms would meaningfully improve affordability, strengthen competition, and move the health care system toward a more patient-centered and fiscally responsible future.

Finally, here is a Thanksgiving recipe from our congressional affairs lead, Ryan Long—a long-standing staple for Long-family Thanksgiving meals.

Sweet Potato Casserole (from Ryan Long)

Sweet potatoes have always been a staple at our Thanksgiving table. For a long time, it was sweet potatoes with marshmallows on top, which is always delicious. Then, in ninth grade, a family friend brought over mashed sweet potatoes with a pecan-candy topping, and it has been a fixture at every Thanksgiving since. Some swear this is a dessert, but it goes best right alongside your stuffing, turkey, and mashed potatoes.

Recipe:
40 oz canned sweet potatoes
½ cup butter
1 tsp vanilla
½ cup milk
1 cup sugar
2 eggs – beaten
½ tsp cinnamon
½ tsp nutmeg
½ tsp ginger

Topping:
1 cup brown sugar
½ cup flour
⅓ cup butter
1 cup chopped pecans

Mix ingredients, put in 10 x 15 dish, sprinkle on the topping, bake at 375 degrees for 45 to 60 minutes.