United States President Donald Trump announced a health care plan that would replace government subsidies for insurance with direct payments for consumers into health savings accounts, an idea some experts said would hurt low-income Americans.
The Trump administration called on Congress on Thursday to enact legislation for Trump’s code Most Preferred Nation Drug price deals and making more drugs available to buy over the counter.
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“It will lower healthcare costs and increase consumer choice by strengthening 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.
Trump’s framework, dubbed “The Great Healthcare Plan” and described in a White House fact sheet, includes an insurance cost-sharing reduction program that could lower the most common Obamacare plan premiums by 10 percent and replace government subsidies for insurance with direct payments to Americans.
The White House did not provide details on how much it plans to send consumers to buy insurance, or whether the funds will be available to all “Obamacare” enrollees or only those with low-level bronze and catastrophic plans.
The idea floated among Republican senators last year. Democrats largely rejected it, saying the accounts weren’t enough to cover costs for most consumers. Currently, such accounts are used disproportionately by the wealthiest Americans, who have more income to fund them and a greater incentive to lower their tax rate.
White House press secretary Carolyn Levitt was asked at her briefing Thursday if the president could guarantee that people would be able to pay their health care costs under his plan.
“If this plan is implemented, every American with healthcare in the United States will see lower costs as a result,” she said without elaborating.
“These are common-sense actions that make President Trump’s outstanding health care plan, and they represent the most comprehensive and bold agenda for reducing health care costs the federal government has ever considered,” Leavitt said.
The White House said the plan would not affect people with pre-existing conditions.
The plan also targets pharmacy benefit managers and requires insurance companies to disclose profits from premiums and frequency of denials.
Companies will publish their rate and coverage comparisons on their websites in “plain English” as well as the percentage of revenue paid for claims against overhead costs and profits. They must also publish the percentage of claims denied and the average wait time for routine care.
“Instead of just looking at the problems with paperwork, we entered into this great health care plan, a plan that we believe will help Congress create legislation that will address the challenges of the American people,” Mehmet Oz, administrator of the US Centers for Medicare and Medicaid Services, told reporters on a White House briefing call.
The White House also did not provide a timeline for implementation, and a deeply divided Congress is unlikely to quickly pass major healthcare legislation.
Providers and insurers that accept Medicare or Medicaid payments must also post their prices and charges.
Obamacare looms
The announcement comes as millions of Americans face higher healthcare costs this year, with open enrollment for most federally subsidized Obamacare plans set to close on Thursday.
on average, Premium costs will increase From $888 in 2025 to $1,904 in 2026, according to health policy firm KFF, a far bigger jump than the savings promised in the Trump plan.
Congress is divided over whether and how to restore generous Covid-era tax credits that expired at the end of last year.
Retroactively expanding federal subsidies is still possible, and there is a group of bipartisan lawmakers negotiating a possible extension, but Republicans are divided on whether they should do so.
The Trump administration wants the funds to go directly to consumers using health savings accounts, Oz said, instead of insurance companies, a position also adopted by congressional Republicans who oppose increasing Obamacare subsidies.
Trump has said he could veto any legislation to increase subsidies and is not mentioned in the plan.
“It doesn’t specifically address those bipartisan congressional negotiations that are going on. It says our priority is to get the money going to the people as opposed to the insurance companies,” the White House official said.
Trump has long been troubled by the lack of a comprehensive health care plan as he and Republicans have sought to repeal former President Barack Obama’s signature legislation, the Affordable Care Act. Trump failed in his first term in trying to repeal and replace the law.
When he ran for president in 2024, Trump said he only had “concepts of a plan” to address healthcare. His new proposal, short on many details, appeared to be the concept of a plan.
On Wall Street, the healthcare insurance provider’s stock rose on news of the plan. UnitedHealthcare was up 0.8 percent in afternoon trade. Humana is 3.5 percent higher than the open market and Oscar Health is up 6.4 percent.
On the other hand, pharmaceutical stocks are trending lower. Eli Lilly fell about 3.7 percent, ABV was down 1.9 percent and Bristol Myers-Squibb was down 0.9 percent. Johnson & Johnson, on the other hand, remained in positive territory about 0.3 percent higher than the market open.