President Donald Trump has hinted at “concepts of a plan” for healthcare for months as legislators debate the future of key subsidies under the Affordable Care Act, and on Thursday the White House unveiled a more concrete version of its vision for health policy.
Called “The Great Healthcare Plan,” Trump’s proposal would send the value of the now-lapsed Affordable Care Act (ACA) enhanced subsidies directly to consumers rather than route the tax credits through their insurer to bring down premiums.
A fact sheet (PDF) on the plan offers few details on how this would work, but, in an announcement video, Trump said the funds would be deposited into a health savings account in the individual’s name. Generally, individuals cannot apply funds from HSAs toward premiums, and it’s unclear whether the White House plan would make changes to enable this.
“Instead of putting the needs of big corporations and special interests first, our plan finally puts you first and puts more money in your pocket,” Trump said in the announcement.
“The government is going to pay the money directly to you. It goes to you, and then you take the money and buy your own healthcare,” Trump continued. “The big insurance companies lose and the people of our country win.”
He described the ACA’s subsidies as a “flagrant scam” designed to line the pockets of health insurance companies while premiums in the individual market skyrocket.
The proposal would also renew funding for the ACA’s cost-sharing reduction payments, which were eliminated in 2017 under Trump’s first term. The White House said in the fact sheet that funding CSRs would likely reduce premiums on the most common ACA plans by 10%, saving taxpayers $36 billion or more.
In addition, the plan would “end kickbacks from pharmacy benefit managers to the large brokerage middlemen that deceptively raise the cost of health insurance,” per the fact sheet. Neither the announcement nor Trump’s video expounded on what this could look like or what they meant by “kickbacks,” in particular.
For example, a significant priority under Trump’s previous term was regulation that would eliminate safe harbor protections for PBM rebates in Medicare Part D. That rule was ultimately tossed in 2019 after significant pushback from the industry.
Since then, however, under public and lawmaker pressure, the industry’s “Big Three” have begun to shift away from the more traditional rebate model and have embraced pass-through discounts, which are provided to the consumer at the point of sale.
And following the very public launch of Mark Cuban’s Cost Plus Drug Company, legacy PBMs have also emulated cost-plus models and other, more transparent options.
Financial incentives paid to brokers that would be designed to increase enrollment or to steer patients to certain plans or insurers are generally illegal already, and the Department of Justice has pursued this type of fraudulent behavior aggressively.
Beyond the ACA-specific provisions, the plan aims to “hold big insurance companies accountable” by requiring that they post rate and coverage comparisons online in plain English, making it easier for consumers to shop for coverage. It would also require that health plans publish what percentage of their revenue is paid out to claims compared to overhead costs and profits.
For-profit health plans largely publish this information already as the medical loss ratio, which is the the amount of premium revenue they use to pay for claims versus what is applied to administrative and other costs. Under the ACA, most payers are required to spend at least 80% of premium revenue on claims in the individual and small group markets, and 85% of revenue in large group and Medicare Advantage.
The plan would also mandate that insurers post the percentage of claims they reject, as well as the wait times for “routine care,” on their websites, though it does not specify the conditions or services for which this would apply. It includes language to codify price transparency requirements that were established by the Centers for Medicare & Medicaid Services in the previous Trump administration.
The policy proposal would also codify the White House’s most-favored-nation drug pricing deals and allow for more pharmaceuticals to be available as over-the-counter products, further lowering health costs, per the fact sheet.
In the video, Trump said that through the plan, drug costs could decrease by “300, 400, even 500% starting this month” at his direct-to-consumer website, TrumpRx.
“I have to reiterate, the lowest price in the world is what you’re going to pay, before you were paying the highest price in the world by far, and the politicians did nothing about it, so I’m asking Congress to complete the work that we’ve started,” Trump said.
Sen. Ron Wyden, a leading Democrat and the ranking member on the Senate Finance Committee, blasted the plan in a statement, saying the approach “is all about making your healthcare cost more and letting giant corporations decide if and when you get healthcare.”
“Time and again, Donald Trump has made empty promises to the American people about lowering their healthcare costs, and today’s announcement is no different,” Wyden said. “Instead of cracking down on Big Pharma and Big Insurance, Trump and Republicans caused premiums to skyrocket, slashed payments to hospitals and communities around the country, and signed off on sweetheart deals with health industry CEOs.”
The plan also drew the ire of Protect Our Care, a nonprofit organization focused on healthcare affordability.
President Brad Woodhouse said in a statement that the proposal “does nothing to stop premium hikes or protect coverage.”
“Calling this a solution doesn’t make it one,” he said. “For the millions of Americans facing skyrocketing costs and disappearing coverage, this isn’t help — it’s a joke.”
On the other hand, Louisiana Republican Bill Cassidy, M.D., praised the plan in a statement Friday and pledge that the Senate Health, Education, Labor and Pensions (HELP) Committee, which he chairs, will take action on healthcare affordability.
The president’s proposal aligns with a number of Cassidy’s own priorities, including leaning on HSAs in the absence of the enhanced subsidies and reforming PBMs.
“I absolutely agree with President Trump that we must make health care affordable and give power to the patient, not more profit to insurance companies. This plan lowers the actual costs of care for all Americans,” Cassidy said. “The HELP Committee has and will take action on the President’s affordability agenda.”