One of The Best Reforms to Obamacare Would be to do Away With its 'Nonsensical' Required Coverages

President Trump is heading to Pennsylvania to speak to Americans about affordability. Joining me to discuss is EJ Anthony, chief economist at the Heritage Foundation. EJ Anthony, thanks so much for joining us here again today. >> Jack, my pleasure. Thank you for having me. >> Now, President Trump is heading to Pennsylvania next week to speak about affordability. Does the administration have a good uh data to back up their message on the price of goods for everyday Americans? Well, we certainly have seen some prices coming down since the start of this year, so that's welcomed relief. Uh unfortunately, we're also seeing some prices continue to rise. Some of that is a leftover uh from the bad policies of last year. For example, uh the Fed, unlike today where I think you can make a case for cutting interest rates. There really was no case for cutting interest rates uh back in the fall, right about a year ago, but that's exactly when the Fed was cutting rates and that created inflationary pressures that started to rear their head 6 12 months later. In other words, right now. So again, we're still dealing with a lot of hangovers from the Biden administration. But the really important thing is not just what are prices doing, but what are wages and prices doing. And in that regard, we we've seen uh earnings growth outpace inflation in 2025. Very welcomed relief for consumers because they had exactly the opposite of that during the previous four years under Biden, for example. Uh the a what the average American could buy with his or her weekly paycheck actually fell. It was down about 4% by the time Biden left office. So things are moving in the right direction certainly. Uh but that doesn't mean we've undone all the damage of the last four years, unfortunately. And the administration said that we should start seeing more improvements in 2026. Why this timeline? >> Well, because a lot of the uh public policies that are going to affect 2026 were were just uh put in place today, were just put in place right now in 2025. So, by the same token that when Biden took office, you didn't immediately have 40-year high inflation. you didn't immediately see uh the interest rate on a 30-year mortgage, for example, triple or quadruple in some markets. It took time for the policies that were enacted uh in 2021, let's say, to have an effect. And some of those policies didn't even take effect until 23 or 24. So, when we passed uh for example, when when they passed the uh the tax bill this year, some of those provisions are not actually going to have much of an impact until 2026. But you know, all that to say, the good work that has been done this year, the foundation that has been laid in 2025, I think will support more robust economic growth in 2026. So that that's a very bullish outlook in my opinion. >> And EJ, I want to get to another topic here. Subsidies for the Affordable Care Act are set to expire at the end of the year. President Trump's proposed giving the subsidies that would normally go to the insurance company to the consumer instead. How would that affect premiums? >> Oh, it would put tremendous downward pressure on those premiums because under the current system, what happens is the government uh just keeps increasing the subsidies as much as the insurers will increase their premiums. It look, it's exactly what has happened with student loans. Every time the government says, "Look, we're going to give you more money for student loans," right? What happens? Tuition goes up. cost of attendance goes up because colleges and universities smell blood in the water and they know that they can simply just match the increase in the in student loans with the cost of attendance increase. That's what happens. And what happens in healthcare now under the unaffordable care act, which is what it should be called, Obamacare, uh is that every time you see an increase in these subsidies, the insurance companies just increase costs for consumers to match. And so it hasn't made anything more affordable. It has made it unaffordable. It has helped add to the national debt and made the deficit much worse. And it has reduced competition instead of increasing competition. If you give the money to people, people can take the money wherever they want or not even they don't even have to spend it all. Uh and all of that puts downward pressure on premiums. It puts downward pressure on health care costs and that's going to be a big win for the American people. So, uh, you and several congressional Republicans repeat this message that, um, you know, the the subsidies are obviously increasing the the price of the premiums, but among the plans being proposed in Congress, they're looking to reform Obamacare or the ACA rather than uh do away with it. Um, what would you recommend uh that drives prices down uh that Congress would be considering? then one of the best reforms they could do would be doing away with all of the nonsensical requirements that Obamacare has put in place in terms of what must be covered. Because look, what do you think would happen to your car insurance if we mandated if the government said your car insurance must cover things like oil changes, tire rotation, uh uh tuneups, replacing a spark plug or a timing belt or timing chain? What would happen to the cost of your car insurance? it would go through the roof because the car insurance company now has to cover all of these additional expenses. They're going to require high higher premiums to simply make up for that. Except you'll end up paying even more in the long run because now you've introduced a middleman into the process and he's always going to want to take a cut off the top on every single repair or every single maintenance item you have done. So what's the parallel with health care? Do away with all of that. you know, make it so that we go back to a model where you just pay a low cash price for most services. And what your health care actually covers are catastrophes. Your health care should cover emergencies like if you break a leg or if you need a a surgery, things like that. It should not cover things like your annual checkup because believe it or not, you end up paying more in the long run for that annual checkup if health insurance is involved. It's actually cheaper in the long run to pay a much lower premium and to pay a low cash price for that checkup. EJ Anthony, thank you so much for sharing your insights here today. Always appreciated. Oh, >> it's my pleasure. Thank you for having me.