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Health Care in the 2020 Presidential Election: Commercial Health Care Costs

Health Care in the 2020 Presidential Election: Controlling Cost
  • Lovisa Gustafsson
    Lovisa Gustafsson

    Vice President, Controlling Health Care Costs, The Commonwealth Fund

  • Lovisa Gustafsson
    Lovisa Gustafsson

    Vice President, Controlling Health Care Costs, The Commonwealth Fund

  • In their health care proposals, both Trump and Biden focus on reducing prices for those with commercial health insurance by tackling inefficiencies in the market

  • Trump emphasizes a patient-driven market, while Biden aims to increase competition through antitrust actions and gain purchasing leverage through a new public plan option

The Issue

Health care spending in the United States continues to rise. The U.S. spends more per capita and as a percentage of gross domestic product than other developed countries yet has worse outcomes. The driver of high prices in the U.S. is commercial prices, which include the prices paid for health insurance received through employer or private health plans. As costs have risen, so too have patients’ out-of-pocket costs in the form of higher premiums, deductibles, and copayments, increasing the number of patients who struggle to afford needed care. As in previous elections, health care is a top issue for voters and both President Donald Trump and Vice President Joe Biden have proposed multifaceted approaches to curbing health care costs, with a focus on commercial prices.

The Candidates’ Approaches

President Donald Trump

Overall approach: Based on President Trump’s record, his approach to addressing health care costs is based on promoting a patient-driven health care market and greater transparency of health care prices. This analysis is based on his record to date. He does not have a specific election platform.

Increase competition: Signed an executive order and issued a final rule that would require hospitals, starting in 2021, to publish the prices of services on their websites to allow patients to make decisions based on costs. This transparency is meant to increase competition and ultimately bring down prices.

Surprise billing: Signed an executive order regarding surprise billing. Supports congressional efforts to pass legislation that would ban providers from charging patients out-of-network rates when the patient doesn’t have control over the provider seen, such as with anesthesiologists or radiologists. If Congress doesn’t act by the end of 2021, directs the U.S. Department of Health and Human Services to prohibit surprise bills.

Vice President Joe Biden

Overall approach: As laid out in his campaign proposal and in recommendations by the campaign’s Unity Task Force, Vice President Biden seeks to increase competition in health care markets and remove inefficiencies from the system.

Increase competition: Biden proposes using antitrust authority to reduce consolidation among providers. Through mergers and acquisitions for several decades, health care providers have become consolidated — thereby decreasing competition — with few restrictions. This has produced significant increases in prices with little to no quality improvements.

Vice President Biden has proposed establishing a public health care option, which would control health care spending in two ways. First, it would negotiate prices with providers, using purchasing leverage to obtain lower prices. Second, it would inject competition into highly consolidated health insurance markets by providing an alternative option to existing plan offerings.

Biden also has proposed increasing price transparency in the health care system across all payers.

Surprise billing: Proposes to ban providers from charging patients out-of-network rates when the patient doesn’t have control over the provider seen.

Administrative overhead: Administrative overhead contributes to the high cost of health care, representing up to a third of spending. Proposes reducing spending through uniform medical billing, allowing more health care dollars to be spent on patient care rather than paperwork.

Both candidates have more detailed proposals addressing prescription drug costs. For details, see this post.

Both candidates have more detailed proposals addressing coverage and patient affordability. For details, see this post.

Implications of the Candidates’ Approaches

To assess the implications of the candidates’ approaches to coverage and affordability, the public might consider the following questions:

Will the approach reduce commercial health care prices?

Both candidates’ proposals focus on reducing prices for those with commercial health insurance. Some of the proposals, such as banning surprise billing, would decrease some prices for some patients, while for others, such as price transparency, there is less evidence as to impact on prices. Ultimately, the impact will depend on the mix of proposals and how they are implemented.

Will the approach make commercial health insurance and health care more affordable?

As health care prices decrease, in theory so would overall spending and patients’ premiums. Both candidates’ proposals are focused on inefficiencies in the commercial market. Biden’s proposals together are more expansive, as they address additional factors and present additional strategies to bring prices down.

Do other policies pursued by the candidates have spending implications?

The Trump administration continues to pursue the repeal of the Affordable Care Act, including the law’s Medicaid expansion. Medicaid generally pays the lowest prices for health care of all payers, so switching patients from Medicaid to commercial or other insurance would likely raise prices for those patients and increase overall spending. In addition, the loss of marketplace subsidies and market reforms (for example, protections for people with preexisting conditions) would increase premiums in the individual market to levels unaffordable for most people without employer plans, if they could get a plan at all.

Both candidates also propose reforms to Medicare, such as alternative payment models to coordinate care, reduce costs, and increase quality. While changes to Medicare payment and reimbursement do not directly impact the commercial market, commercial insurers often follow Medicare’s policies, so there could be spillover effects.

Will the approaches provide consumer protections against surprise billing?

Both candidates propose to protect patients from high medical bills from out-of-network providers, known as surprise bills, although their plans lack detail. Congress recently considered several bipartisan proposals to address surprise bills but has not passed one.

Publication Details



Lovisa Gustafsson, "Health Care in the 2020 Presidential Election: Commercial Health Care Costs," To the Point (blog), Commonwealth Fund, Oct. 12, 2020.