By NextBestFitNo cost sharing at the point of care
Covered services are free when used: no deductibles, copays, or coinsurance.
Ends underinsurance and new medical debt; the model already assumes it.
To review: Costs the most of the cost-sharing options and raises use; compare with Germany-style income-capped copays.
Review ledgerHow this path connects
This path
No cost sharing at the point of care
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Set cost sharing to zero for all covered services by law
- Remove deductibles and coinsurance from claims systems
- Ban balance billing by participating providers
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Underinsurance: covered, but can't afford to use it
Removing deductibles, copays, and coinsurance makes covered services free when used. It ends underinsurance and removes billing at the point of care.
- Medical debt affects about 100 million people
Removing deductibles, copays, and coinsurance ends most medical debt for covered services.
- About $1 trillion a year in administrative cost
Removing cost sharing eliminates billing at the point of care.
What it creates or worsens
- Longer waits if demand grows faster than capacity
Free covered care increases use, placing more demand on care services.
12 paths soften this
Legal wait-time guaranteesLonger waits if demand grows faster than capacityChosenBuild capacity before demand risesLonger waits if demand grows faster than capacityChosenPay for activity on top of budgetsLonger waits if demand grows faster than capacityChosenFund more residency slotsPhysician shortage, especially in primary careChosenFull practice authority for NPs, PAs, pharmacists, dental therapistsScope-of-practice limits waste capacityChosenTeam-based care with physician oversightScope-of-practice limits waste capacityRejectedFee-for-service at public fee scheduleU.S. prices are far higher than in other countriesChosenKeep means testing, but expand home careLong-term care requires spending down to povertyChosenAllow private insurance for covered servicesTwo-tier care: a private fast lane for those who can payRejectedBudgets adjust automatically for population, age, and volumeFixed budgets can ration careChosenBase budget plus activity paymentsFixed budgets can ration careChosenWaiting-time guarantees as a backstopFixed budgets can ration careChosen - Raises spending or loosens control over it
Making care free increases use and spending, as found in the RAND experiment.
- Replacing premiums with taxes
Free covered care requires higher taxes.
Who's affected
Who gains
- People with ongoing or specialist care needs
- Underinsurance: covered, but can't afford to use it: High deductibles and coinsurance lead them to avoid care.
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- Low- and middle-income households
- Underinsurance: covered, but can't afford to use it: High deductibles and coinsurance lead them to avoid care.
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- Replacing premiums with taxes: Income-based taxes replace flat premiums that took a large share of their pay.
- Uninsured people
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- People with unaffordable deductibles or coinsurance
- Medical debt affects about 100 million people: Medical debt leads them to skip care and face damaged credit and financial distress.
- Doctors, nurses, and other clinicians
- About $1 trillion a year in administrative cost: Time goes to billing and insurer rules instead of patients.
- People with employer coverage
- About $1 trillion a year in administrative cost: Premiums pay for the administration.
- Taxpayers and public budgets
- About $1 trillion a year in administrative cost: Public programs pay for it too.
Who loses
- Health insurers, brokers, and their shareholders
- Underinsurance: covered, but can't afford to use it: They benefit from lower premiums.
- About $1 trillion a year in administrative cost: Insurers, billing firms, and clearinghouses earn from the complexity.
- Employers
- Underinsurance: covered, but can't afford to use it: They benefit from lower premiums.
- Replacing premiums with taxes: Businesses that never offered coverage start paying toward it.
- Health financing intermediaries and lenders
- Underinsurance: covered, but can't afford to use it: They administer health savings accounts associated with high-deductible plans.
- Medical debt collectors and buyers
- Medical debt affects about 100 million people: They collect or buy medical debt.
- Hospitals, clinics, and care organizations
- Medical debt affects about 100 million people: Hospitals sell medical debt or sue to collect it.
- Insurance and billing workers
- About $1 trillion a year in administrative cost: Their jobs exist because of the complexity.
- People with employer coverage
- Longer waits if demand grows faster than capacity: They are seen fastest today and would share one queue with everyone.
- People with ongoing or specialist care needs
- Longer waits if demand grows faster than capacity: They need specialists and procedures most often.
- Taxpayers and public budgets
- Raises spending or loosens control over it: Public budgets pay the added spending.
- High earners
- Replacing premiums with taxes: They pay more under income-based taxes than they did in flat premiums.
Where it has been tried
- UK, Canada (hospital & physician care): No charges for covered services.
- England: In a November 2024 parliamentary answer, the government reported that about 89% of prescription items in England were dispensed free in the community.