President Donald Trump has announced a health care plan that would replace government subsidies for insurance with direct payments into consumer health savings accounts, a proposal that some experts say would hurt low-income Americans.
The Trump administration on Thursday asked Congress to pass legislation that would codify Trump’s Most Favored Nation Agreement and make more medicines available over-the-counter.
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“This will reduce health care costs and increase consumer choice by increasing price transparency, increasing competition, and reducing the need for costly and time-consuming doctor visits,” the White House said in a release outlining the order.
President Trump’s framework, dubbed the “Great Health Care Plan” and outlined in a White House fact sheet, includes a cost-sharing reduction program that could reduce premiums for the most common Obamacare plans by more than 10%, replacing government subsidies for insurance with direct payments to Americans.
The White House did not provide details about how much money it planned to send to consumers to buy insurance or whether the funds would be available to all Obamacare enrollees or only to those with lower-tier bronze or catastrophic plans.
The idea mirrors one floated among Republican senators last year. Democrats largely rejected the bill, arguing that the account was not enough to cover most consumers’ costs. Currently, such accounts are used disproportionately by America’s wealthiest people, who have more income, more money to contribute, and more incentive to lower their tax rates.
White House press secretary Caroline Levitt was asked at a Thursday briefing whether the president could guarantee Americans would be able to afford their health care costs under his plan.
“If this plan is implemented, every American who receives health care in the United States will experience cost savings as a result,” she did not elaborate.
“These are the common sense actions that make up President Trump’s great health care plan, the most comprehensive and boldest agenda ever considered by the federal government to reduce health care costs,” Levitt said.
The White House said the plan does not affect people with pre-existing conditions.
The plan also targets pharmacy benefit managers and requires insurers to disclose the profits they receive from premiums and the frequency of denials.
Companies publish comparisons of rates and coverage in “plain English” on their websites, as well as the percentage of revenue paid out on claims compared to overhead costs and profits. They would also be required to publish the percentage of claims denied and average waiting times for routine care.
“Instead of just putting the problem on paper, we embarked on this great health plan, a framework that we believe will help Congress enact legislation that addresses the challenges Americans desperately need,” Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, told reporters at a White House briefing.
The White House has also not given an implementation timeline, and with a deeply divided Congress, it is unlikely that any major health care legislation will be passed soon.
Providers and insurance companies that accept Medicare and Medicaid money are also required to post their prices and fees.
Obamacare looms
The announcement comes as millions of Americans face rising health care costs this year, as applications for most federally subsidized Obamacare plans close Thursday.
On average, premiums will increase from $888 in 2025 to $1,904 in 2026, according to health policy firm KFF, which is far greater than the savings promised in President Trump’s plan.
Congress remains divided over whether and how to restore generous coronavirus-era tax credits that expired late last year.
Retroactive expansion of federal aid is still possible, with a bipartisan group of lawmakers negotiating a possible extension, but even Republicans are divided on whether it should be done.
Oz said the Trump administration wants the funds to go directly to consumers through health savings accounts rather than insurance companies, a position also taken by Republicans in Congress who oppose extending Obamacare subsidies.
President Trump has said he may veto the subsidy extension bill, but the plan does not mention subsidies.
“This is not a specific reference to the bipartisan Congressional negotiations that are currently underway. It says our priority is to get money to the people, not the insurance companies,” the White House official said.
President Trump and the Republican Party are seeking to repeal former President Barack Obama’s flagship bill, the Affordable Care Act, but Trump has long struggled with the lack of a comprehensive health care plan. President Trump was thwarted in his first term in an attempt to repeal and replace the law.
When running for president in 2024, Trump said he only had a “concept of a plan” to tackle health care. His new proposal lacked many details and appeared to be a planning concept.
On Wall Street, shares of health insurance companies soared on news of the impending plan. United Healthcare rose 0.8% in intraday trading. Humana rose 3.5% above the market, and Oscar Health rose 6.4%.
On the other hand, pharmaceutical stocks are on a downward trend. Eli Lilly fell about 3.7%, AbbVie fell 1.9% from its opening price and Bristol-Myers Squibb fell 0.9%. Meanwhile, Johnson & Johnson remains in positive territory, about 0.3% above the market opening price.
