United States President Donald Trump announced a healthcare plan that would replace government subsidies for insurance with direct payments into health savings accounts for consumers, an idea that some experts have said would hurt lower-income Americans.

The Trump administration on Thursday called on Congress to pass legislation to codify Trump’s most-favoured-nation drug price deals and to make more medicines available for over-the-counter purchase.

Recommended Stories

list of 4 itemsend of list

“This will lower healthcare costs and increase consumer choice by strengthening price transparency, increasing competition, and reducing the need for costly and time-consuming doctor’s visits,” the White House said in a release outlining the order.

Trump’s framework, dubbed “The Great Healthcare Plan” and outlined in a White House fact sheet, includes an insurance cost-sharing reduction programme that could reduce the most common Obamacare plan premiums by more than 10 percent and replaces government subsidies for insurance with direct payments to Americans.

The White House did not provide details on 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 those with lower-tier bronze and catastrophic plans.

The idea mirrors one floated among Republican senators last year. Democrats largely rejected it, saying the accounts would not be 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 bigger incentive to lower their tax rate.

Advertisement

White House press secretary Karoline Leavitt was asked at her briefing on Thursday whether the president could guarantee that, under his plan, people would be able to cover their healthcare costs.

“If this plan is put in place, every single American who has healthcare in the United States will see lower costs as a result,” she said without elaborating.

“These are common-sense actions that make up President Trump’s great healthcare plan, and they represent the most comprehensive and bold agenda to lower healthcare costs to have ever been considered by the federal government,” Leavitt also said.

The White House said that the plan would not affect people with pre-existing conditions.

The plan also targets pharmacy benefit managers and requires insurance companies to disclose the profits they take from premiums and the frequency of denials.

Companies would publish their rate and coverage comparisons on their websites in “plain English” as well as the percentage of revenues paid out to claims compared with overhead costs and profits. They would also be required to publish the percentage of claims they reject and the average wait times for routine care.

“Instead of just papering over the problems, we have gotten into this great healthcare plan, a framework that we believe will help Congress create legislation that will address the challenges that the American people have been craving,” US Centres for Medicare & Medicaid Services Administrator Mehmet Oz 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 pass major healthcare legislation quickly.

Providers and insurers who accept Medicare or Medicaid money would also have to post their pricing and fees.

Obamacare looms

The announcement comes as millions of Americans face higher healthcare costs this year, with open enrolment for most federally subsidised Obamacare plans closing on Thursday.

On average, premium costs will increase to $1,904 in 2026 from $888 in 2025, according to health policy firm KFF, a far greater jump than the savings promised in the Trump plan.

Congress remains divided on whether and how to reinstate generous COVID-era tax credits that expired at the end of last year.

Retroactive expanded federal subsidies are still possible, and there is a group of bipartisan lawmakers negotiating a potential extension, but Republicans remain divided on whether they should do so.

The Trump administration wants funding to go directly to consumers using health savings accounts, Oz said, rather than to insurers, a position also adopted by Congressional Republicans who oppose extending the Obamacare subsidies.

Advertisement

Trump has said he may veto any legislation to extend the subsidies, and the plan makes no mention of them.

“This does not specifically address those bipartisan congressional negotiations that are going on. It does say that we have a preference that money goes to people, as opposed to insurance companies,” the White House official said.

Trump has long been dogged by his lack of a comprehensive healthcare plan as he and Republicans have sought to unwind former President Barack Obama’s signature legislation, the Affordable Care Act. Trump was thwarted during his first term in trying to repeal and replace the law.

When he ran for president in 2024, Trump said he had only “concepts of a plan” to address healthcare. His new proposal, short on many specifics, appeared to be the concept of a plan.

On Wall Street, healthcare insurance provider stocks surged on the news of the looming plan. UnitedHealthcare is up 0.8 percent in midday trading. Humana is up higher at 3.5 percent than the market open, and Oscar Health is up 6.4 percent.

Pharmaceutical stocks, on the other hand, are trending lower. Eli Lilly is down by about 3.7 percent, AbbVie tumbling 1.9 percent below the market open, and Bristol Myers -Squibb is down by 0.9 percent. Johnson and Johnson, on the other hand, does remain in positive territory at about 0.3 percent higher than the market open.