Subsidies: The Status Quo of American Healthcare’s Cathedral

Mariam Kalathil

On March 23, 2010, the Affordable Care Act (ACA) was signed into law. This act set goals to expand American healthcare access, strengthen its benefits, and reduce costs with income-based subsidies and tax credits, as well as the creation of a health insurance marketplace. Even in a politically polarized nation, the ACA has undeniably shown significant success in accomplishing its goals.

The ACA marketplace is an online platform where individuals can compare and purchase health insurance plans for themselves or their families. In 2025, it reached a record high enrollment figure for the fourth year in a row, totaling 24.3 million Americans. The aggrandizement can be attributed much to the extension of enhanced subsidies. The millions include farmers, ranchers, small-business owners, and other self-employed individuals, all of whom lack the option to be employer-insured.

So, then, is it only 24 million who rely on the ACA, and subsequently, subsidies? Not in the slightest. Most Americans believe their healthcare is private, and the slim majority prefer it that way; however,ut this is a false reality as 91% of Americans receive government-subsidized healthcare, and it follows that private backing is a mirage in the heat.

The U.S. healthcare system is a mixed system, termed private because most health insurance is provided by private companies, and the majority of hospitals and doctors’ offices are privately owned, operating in a market-driven environment. The government acts as a payer rather than a direct provider or controller of healthcare services, and its subsidies finance coverage directly within the private insurance market, lowering patient premiums. Private insurers provide plans but rely heavily on public funding to remain affordable.

Source: Reinhardt UE. The Money Flow from Household to Health Care Providers (2011).

Characteristic high costs that often come up in conversation of the state of American healthcare are due to a lack of centralized cost control and largely unbridled private healthcare entities, driven by profit. Hospitals, along with pharmaceutical companies and medical device sales, operate by these values.  Now, the system relies on market forces and competition among insurers. This is all quite representative of American individualism and free-market values; but can’t “American” keep its definition in other industries, not the one directly affecting lives to the point of upheaval?

Recently, there has been a narrow semblance of agreement within Congress that has brought the government shutdown to an end. But despite the shutdown’s end, there is still much to address.  

Selena Simmons-Duffin, health policy correspondent for NPR, explains that people who shop for health insurance are left in a strange purgatory as open enrollment for the upcoming year approaches. Open enrollment is the specific annual period during which individuals can sign up for, change, or cancel plans. The imminent expiration of subsidies has already resulted in monthly premiums increasing and uncertainty about future costs. With the projection for premiums to skyrocket, as well as the event that subsidies are not extended, Americans may have to choose less comprehensive plans or simply go uninsured.

The future of healthcare subsidies is uncertain, but there are some ideas circulating regarding change. Bill Cassidy, Senate Health Committee chair, mentioned a federally pre-funded spending account for health expenses. Later, Senator Rick Scott expressed sentiment for a similar health savings account. However, these plans are far from formed, and their potential efficacy is unclear. Another proposition looks at adjusting subsidies to favor younger and lower-risk individuals to lower premiums, increase enrollment, and even boost insurer profit. The intent would be to design a more targeted subsidy scheme under the ACA rather than a uniform one. Design should be regulatory, cautious, and considerate of public options.

The intricacies, contours, and folds of the healthcare institution are manifold and not swiftly understood by all. However, at present, the institution in the United States resembles a grand and stately cathedral. Government subsidies stand sanctifying the system, while insurers and private intermediaries act as its stewards, mediating what Americans depend on most. Americans enter the cathedral, and it commands reliance and a still sense of vulnerability in the face of something so complex and unreachable.

Copy editor: Aubrey Taylor

Photography source: Mariam Kalathil (Canva)