WASHINGTON — President Trump announced Thursday that he intends to replace government subsidies for health insurance with direct payments to consumers, a proposal critics warn could disproportionately harm lower-income Americans.
In a video posted to social media Thursday, Trump outlined plans for new health care legislation. The plan does not include a solution for people who purchase their health insurance on Healthcare.gov.
The announcement comes as millions of Americans face rising health care costs following the expiration of COVID-19-era tax credits for federally subsidized Obamacare plans. Open enrollment for most health insurance plans closes Thursday.
In a brief, single-page outline, the White House presented a plan to Congress aimed at reducing drug prices and insurance premiums, increasing cost transparency, and holding insurers accountable.
The proposal lacks a clear implementation timeline, and given a sharply divided Congress, major healthcare reforms are unlikely to advance quickly—despite Trump urging lawmakers to act “without delay” in the video.
The plan includes direct payments to consumers, allowing them to purchase their own healthcare coverage. Critics warn that replacing subsidies with cash payments could push lower-income Americans toward less comprehensive plans outside the Affordable Care Act marketplace. That law was designed to pool healthy and sick individuals together to keep premiums affordable.
Trump’s plan also urges Congress to formalize his “most-favored-nation” drug pricing agreements and seeks to expand access to medications by making more of them available over the counter. He has pushed pharmaceutical companies to align U.S. prices with those in other wealthy nations and has secured agreements with 14 drugmakers to lower costs on select medicines for Medicaid beneficiaries and cash-paying patients. The plan also takes aim at PBMs.
