On January 15th, the final day of the ACA enrollment period, President Trump announced the Great Healthcare Plan to lower healthcare costs for all Americans. This proposes an alternative to the Democrats’ plan of extending the expired premium ACA subsidies for the next three years, a plan that the House recently passed but is unlikely to get through the Senate. Republicans do not want to extend the enhanced ACA subsidies, as they are a high cost to taxpayers and are driving only 4% of the premium increases people face this year. However, that does not negate the fact that Americans will have to pay a greater share of their premiums and are being priced out of coverage, which must be addressed. Here are the details of the plan and how it would lower healthcare costs.
Lowering Insurance Premiums
Rather than giving ACA subsidies to insurance companies, this plan would “send money directly to the people.” The fact sheet does not detail what this would look like; however, Senators Bill Cassidy and Mike Crapo introduced legislation in December that would do just this. The Healthcare Freedom for Patients Act would make a contribution of $1,000 or $1,500 into the health savings accounts (HSAs) of Americans under 700% of the federal poverty level. The individual can then decide which plan they would like to pay for with that money. The individual would have to be enrolled in an HSA-eligible bronze or catastrophic plan on the ACA marketplace. Catastrophic plans are high-deductible health plans that tend to have lower premiums. Currently, only people under age 30 are eligible for catastrophic plans, but this bill would make them available to everyone, expanding consumer options.
Making payments to individuals rather than insurance companies completely changes the incentive structure for pricing plans. If insurance companies are not receiving subsidies, then that is no longer an incentive to increase premiums in order to get more government money. On the other side of that coin, consumers now have complete decision-making power over the plan they choose, meaning that insurance companies must respond to their choices and likely lower costs to get more enrollees.
This bill would also make a significant change for cost-sharing reductions (CSRs) on the silver plan. CSRs are a form of financial assistance that insurance companies are required to give to enrollees between 100% and 250% of the federal poverty line to lower their out-of-pocket costs. However, funds to reimburse the insurance companies for this discount were not explicitly appropriated for this in the ACA, and the Department of Health and Human Services stopped funding them in 2017. To make up those costs, insurance companies began increasing premiums so that they would get more funds from the premium tax credits—a practice known as “silver loading.” This bill, by appropriating funds to insurance companies for CSRs, is expected to decrease premiums by 11%.
Enforcing Transparency and Accountability
President Trump has been leading on price transparency measures since his first term. The federal price transparency rule, which went into effect in 2021, requires all hospitals to post the prices of the 300 most common services and procedures on their websites in a consumer-friendly display, and a machine-readable file for all services and procedures offered by the hospital. A similar rule also went into effect in 2022 for health plans. Compliance has remained low as the federal government has taken few enforcement actions under the Biden administration.
Since returning to office, President Trump signed an executive order directing his administration to better enforce price transparency. In December, three federal agencies released a proposed rule that would “improve the standardization, accuracy, and accessibility of public pricing disclosures” for health plans. There has also been legislation introduced, such as the Patients Deserve Price Tags Act, which would codify price transparency and strengthen the requirements so patients have even better access to price information.
The Great Healthcare Plan also encourages accountability of large insurance companies beyond pricing. First, insurance companies would have to use “plain English” when publishing rate and coverage comparisons, rather than industry jargon, so that people can better understand the plans they are purchasing. This idea seems to come from the Plain Writing Act of 2010, which requires all federal agencies to use understandable language in communications with the public. The plan would also require insurance companies to publish how their revenues are spent, the percentage of claim denials, and average wait times for routine care on their websites. Under ERISA, employers can request some similar, plan-specific data to fulfill their fiduciary duties. President Trump is proposing public-facing transparency on much broader insurer-wide data, and no specific rules or legislation have been proposed that would enact these policies.
Lowering Drug Costs
Finally, President Trump’s plan includes codifying his Most-Favored-Nation deals, which makes it so pharmaceutical companies can’t charge Americans higher prices than they would in other nations, and approving more safe pharmaceutical drugs available for over-the-counter purchase (OTC). Expanding the availability of OTC drugs is particularly promising as drugs tend to be cheaper once multiple manufacturers can produce them, and patients do not need to have a doctor’s appointment to get them prescribed or refilled.
Overall, the Great Healthcare Plan outlines a fundamentally different approach to lowering costs that shifts power away from large institutions and towards the people. By giving payments directly to consumers, enforcing transparency and accountability, and expanding access to lower‑cost medications, the direction is clear that meaningful reform creates a market where prices are visible, and individuals get to decide how money is spent on health care, not insurance companies. This is a stark contrast to propping up a system that is not actually working for the American people.