Health Care Freedom for Patients Act of 2025

Senate Finance Committee Chair Mike Crapo and Senate HELP Committee Chair Bill Cassidy have introduced the Health Care Freedom for Patients Act of 2025, legislation to address several problems with the Affordable Care Act (ACA). In marked contrast to misguided proposals to extend the COVID-era subsidies and empower insurers, the Crapo–Cassidy framework would expand options, reduce premiums, and shift more control to patients without increasing overall federal spending or deficits.

Appropriating CSRs Reduces Premiums by 11 Percent and the Ten-Year Deficit by $30 Billion

The chairmen propose appropriating cost-sharing reduction (CSR) payments to end the silver-loading distortion that has driven up premiums and federal subsidies. By restoring the payment structure the ACA originally envisioned, a CSR appropriation would reduce premiums by 11 percent and lower overall federal subsidy costs. Here is a brief on the benefits of a CSR appropriation, which also includes a discussion of Paragon’s HSA option proposal. While not an element of the chairmen’s legislation, the HSA option would integrate well to extend benefits of HSAs to lower-income ACA enrollees.

Opening Up Catastrophic Plans

The chairmen’s legislation would expand access to ACA catastrophic plans for all individuals. The ACA restricted access to these plans to adults under age 30 or those who qualify for hardship exemptions. Removing these restrictions would expand consumer options and enhance competition in the market.

Creating an HSA Contribution for ACA Enrollees Who Select a Catastrophic or Bronze Plan

The legislation would provide HSA contributions—$1,000 for adults under age 50 and $1,500 for those age 50 and over—for individuals who select bronze or catastrophic plans and have income below 700 percent of the federal poverty level (FPL). This component aligns with President Trump’s call to send resources to people, not insurers. HSAs give individuals the freedom to spend funds on the services and providers they value most, including out-of-network physicians, dental or vision care, or direct primary care arrangements. They also create a stronger personal connection to the cost of care, encouraging price sensitivity for routine and shoppable services.

The chairmen’s HSA proposal would provide the most benefit to middle-income enrollees who do not benefit from the CSR program. Lower-income enrollees would have large incentives to enroll in silver plans because they must be enrolled in a silver plan to benefit from CSRs and the corresponding lower deductibles and out-of-pocket limits. Middle-income enrollees, who do not benefit from CSRs, would have incentives to switch from gold or silver plans to catastrophic or bronze plans under this proposal. (To the extent enrollees with income below 200 percent of the FPL switch from silver plans to bronze or catastrophic plans, there would be savings to the government because the government’s cost of their CSR subsidy would exceed the amount of the HSA contribution.)

No Extension of COVID-era Subsidy Boosts

Most importantly, the Crapo-Cassidy framework resists the media and insurance company campaign to stampede Congress into reinstating pandemic subsidy boosts to health insurers, which Democrats previously scheduled to expire at the end of 2025. Permitting the COVID subsidy boosts to expire recognizes that the underlying ACA subsidies are already extraordinarily generous and that subsidy boosts caused numerous problems.

For the average exchange enrollee, the underlying subsidy means that federal taxpayers will cover more than 80 percent of the premium next year. And as ACA premiums have risen sharply over the past decade, taxpayers—not enrollees—have absorbed nearly all that increase. The COVID-era subsidy boosts pushed that even further, creating widespread fully subsidized plans, which encouraged fraud, led to millions of phantom enrollees, and weakened cost discipline throughout the market. Maintaining those subsidy boosts would only put upward pressure on premiums and health care prices while increasing improper federal spending.

One Key Policy Addition Needed to Reduce Fraud

One important anti-fraud protection missing from the chairmen’s framework is a minimum monthly premium payment. A modest personal contribution of at least $25 per month, regardless of the plan selected, is the most effective safeguard against fraud. Requiring every subsidized enrollee to pay something each month ensures the individual actually wants the plan and restores an essential layer of accountability.

Obamacare Needs Major Reform, Not More Subsidization

Obamacare needs significant reform. The law has made individual market plans less attractive, with high premiums and high deductibles for plans with narrow networks. The subsidies represent a much larger government benefit than workers receive if they obtain coverage from an employer, which pushes employers not to offer coverage. The law is significantly increasing federal deficits, with much of the spending on ineligible or phantom enrollees while further entrenching an inefficient, insurance-dominated health sector.

The Crapo–Cassidy approach would represent an improvement. It avoids the worst policy mistake Congress could make (extending the COVID subsidy boosts), takes reasonable steps to reduce distortions, strengthens program integrity, and shifts resources toward people rather than insurers.

Congress should pair these reforms with the additional consumer-directed policies outlined in my Senate Finance Committee testimony, including the HSA Option, broader access to association health plans, restoration of more flexible rules for short-term limited-duration insurance, and improved individual coverage health reimbursement arrangements (ICHRAs). Together, these reforms would expand the availability of more affordable options for families and small businesses, reduce fraud and improper payments, and empower Americans to choose the plans and providers that best meet their needs.