Trump unveils healthcare plan featuring direct payments over insurance subsidies
- - Trump unveils healthcare plan featuring direct payments over insurance subsidies
By Ahmed AbouleneinJanuary 16, 2026 at 12:37 AM
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FILE PHOTO: U.S. President Donald Trump speaks at the Detroit Economic Club in Detroit, Michigan, U.S., January 13, 2026. REUTERS/Evelyn Hockstein/File Photo
By Ahmed Aboulenein
WASHINGTON, Jan 15 (Reuters) - U.S. President Donald Trump announced a healthcare plan on Thursday 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 White House says the plan would lower drug prices and insurance premiums, make costs more transparent and hold insurance companies accountable.
"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," U.S. Centers for Medicare & Medicaid Services Administrator Mehmet Oz told reporters on a White House briefing call.
The White House did not provide a timeline for implementation, but a deeply divided Congress is unlikely to pass major healthcare legislation quickly.
The Trump administration expects the plan to receive bipartisan support in Congress, a senior White House official said on the call.
The plan, which the administration is calling on Congress to pass as legislation, would codify Trump's most-favored-nation drug price deals, and aims to make more medicines available for over-the-counter purchase.
Trump has been pressuring drugmakers to lower their prices to what patients pay in similarly wealthy nations and has struck deals with 14 drugmakers on prices of some of their medicines for the government's Medicaid program for low-income Americans and for cash payers.
Under Trump's plan, those deals would be grandfathered into legislation codifying the most-favored-nation approach.
Trump's framework, dubbed "The Great Healthcare Plan" and outlined in a White House fact sheet, includes an insurance cost-sharing reduction program that could reduce the most common Obamacare plan premiums by over 10% and replaces government subsidies for insurance under the Affordable Care Act with direct payments to Americans into health savings accounts.
Critics say replacing subsidies with health savings account payments could force lower-income Americans to shift toward short-term or high-deductible insurance plans.
OBAMACARE ENROLLMENT CLOSES, COSTS RISE
The announcement comes as millions of Americans face higher healthcare costs this year with open enrollment for most federally subsidized 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 it should reinstate generous COVID-era tax credits it allowed to expire 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.
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.
PBMS, INSURERS IN THE CROSSHAIRS
The plan also targets pharmacy benefit managers, the industry middlemen who negotiate drug prices for employers and health plans, and requires insurance companies to make public the profits they take out of premiums and the frequency of care denials.
Companies would have to publish their rates and coverage comparisons on their websites in "plain English" as well as the percentage of revenue paid out to claims compared to 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.
Providers and insurers who accept Medicare or Medicaid money would also have to post their pricing and fees.
Oz said the Trump administration did not discuss the plan with health insurance companies.
(Reporting by Ahmed Aboulenein; Additional reporting by Ryan Patrick Jones, Katharine Jackson, and Bhargav Acharya; Editing by Chizu Nomiyama and Bill Berkrot)
Source: “AOL Money”
