Barely two weeks into the new year, Americans are really feeling the crunch.
The enhanced subsidies that made the Affordable Care Act more affordable for 22 million Americans last year expired at year’s end. Initial Obamacare enrollment has already dropped by 1.4 million people, and that number may be bleaker now that the final enrollment period has ended in most states. People trying to maintain their insurance coverage face significantly higher premiums, and that even includes those with employer-provided insurance.
What are the Republicans, who fully control Washington, doing about this crisis? Most of them are doing nothing at all—because they don’t consider it a crisis. Just 17 GOP members of the House of Representatives joined Democrats last week in passing a three-year extension of the enhanced subsidies, and negotiations on the bill have stalled in the Senate. And on Thursday, President Donald Trump pretended to take action by unveiling “The Great Healthcare Plan.”
It is not “great,” to say the least; even calling it a “plan” is generous. It’s more like “concepts of a plan,” as Trump famously said when asked during a September presidential debate whether he had a plan for replacing Obamacare. “We have been trying to analyze the Trump health ‘plan’ but I worry that unless Congress puts something real together we are analyzing air,” Drew Altman, president and CEO of the health news and research nonprofit KFF, said on Bluesky. There are few details in the GHP, and it’s missing a rather important one: Trump doesn’t call on Congress to extend the enhanced subsidies. The ideas it does contain likely wouldn’t do anything to help people who are struggling with rising costs right now.
First, Trump wants pharmaceutical companies to charge government insurance plans the cheapest prices they charge other countries for prescription drugs. Trump struck deals with Big Pharma last year to lower the prices of some drugs for some Medicare and Medicaid patients, but he’s now calling for “codifying” those deals. But this would only impact a small portion of Americans’ medical care costs—and it’s worth noting that last year’s deals didn’t stop prescription drug prices from going up on average.
As an alternative to the enhanced subsidies, which lowered the cost of monthly premiums for eligible ACA enrollees, Trump wants Congress to fund health spending accounts that people can use to buy health insurance. “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 health care,” he said in his video announcement, sounding a bit like a home shopping network salesman. It’s not clear, of course, how generous the funds would be for those accounts, or who would qualify.
Trump also wants insurance companies and providers to be more transparent about the costs of services. In theory, that’s fine. Hospitals and doctors offices charge different prices to different insurance companies, and often charge still different prices for uninsured patients paying on their own; the same procedure can cost wildly different amounts even in the same hospital, depending on who’s paying. It’s a confusing system that both hospitals and insurance companies employ hundreds of workers to negotiate and navigate. But publishing what providers charge insurance companies is just as likely to drive costs up as down because insurers, being motivated by profits, are always trying to negotiate the highest rates possible. If an insurer sees that another insurer is getting paid more for a particular procedure, then it will demand that rate as well (and if negotiations go sour, patients could find themselves locked out of their preferred health care provider).
The idea of posting prices is also based on a false hope: that patients will shop for the cheapest care, driving costs down. But that’s not how medicine works. People choose their doctors based on factors like convenience, trust, and quality, not just price. They form relationships with their doctors; the longer the relationship, the better the doctor understands their patient’s medical history. So patients are often reluctant to switch, even if it lowers their costs. (Some people might be weirded out by the lowest prices: They want the best health care for themselves, not basement-bargain care.)
Factors besides price and quality shape costs for bigger players in the industry, too. Research shows that even nonprofit hospitals often reward their CEOs for company growth and increased earnings more than the quality of the care they provide. Even savvy negotiators, like the CEOs of major companies buying large plans to cover their workforce, haven’t been able to keep prices for plans from rising: The costs of employer-provided plans have tripled since 1999.
None of Trump’s ideas, however vague, address these basic problems. And none of them will help people afford insurance today, as simply extending the enhanced subsidies would. In fact, introducing this health care “plan” now has added more confusion than anything else. This is not how the government is supposed to work. The president himself shouldn’t be playing lead dealmaker with the entire health care sector, and doing so only nibbles around the edges of the fundamental problem. Health care is obscenely expensive, and only wholesale change to the system will fix it. But that will require action from Congress, which can’t even agree on something as simple, and obviously beneficial, as the enhanced ACA subsidies.
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