Trump’s “Give Money to the People” Healthcare Plan Will Make Costs Worse

President Trump’s New Health-Care “Fix” Will Make Affordability Even Worse

When President Trump says he wants to “give the money to the people, not the companies,” it sounds like a populist revolution in health care. In reality, it’s a shell game that shifts even more risk and cost onto patients while leaving the real profiteers—insurers, hospital conglomerates, and Big Pharma—largely untouched.

Behind the slogan is a concrete idea: take the federal money that currently helps lower people’s insurance premiums under the Affordable Care Act (ACA) and reroute it directly into individuals’ pockets, often through Health Savings Accounts (HSAs) or similar accounts. Axios

On paper, that sounds empowering. In practice, it’s a fast-track to higher premiums, more uninsured Americans, and even more financial stress for anyone who actually gets sick.

Let’s unpack why Trump’s “give the money to the people” plan would make health care less affordable—not more.

What Trump Is Actually Proposing

Trump isn’t proposing new money for health care. He’s proposing to relabel existing ACA subsidies. Right now:

• Federal subsidies are paid to insurance companies on behalf of enrollees to reduce premiums and, in some cases, out-of-pocket costs.

• These subsidies are means-tested and tied to the cost of comprehensive coverage on the ACA marketplaces.

Trump and Senate Republicans are now pushing to take that same pot of money and send it directly to people, primarily through HSAs or flexible spending accounts. The Washington Post

The pitch:

Instead of “subsidizing insurance companies,” we’ll put the funds in your account so you can “buy your own health care” and keep what you don’t spend.

Sounds nice. Until you remember: health care in America is not cheap, transparent, or optional. And you still have to buy it from… the same companies.

How ACA Subsidies Actually Work Today

Under the ACA:

• Enhanced premium tax credits (boosted during COVID) now help over 20 million people afford coverage on the exchanges. The Washington Post

• These subsidies scale with income and the actual price of insurance in your area. When premiums go up, subsidy amounts rise, cushioning people from the full brunt of the increase.

• Crucially, this structure stabilizes the risk pool—keeping healthy and sick people in the same system, which keeps premiums lower for everyone.

Independent analyses have repeatedly shown that when these subsidies are weakened or pulled back, premiums spike and millions lose coverage. When President Trump cut off cost-sharing reduction payments back in 2017, the Congressional Budget Office projected higher premiums and increased federal spending as a result. Wikipedia

In other words: the boring, technocratic subsidies Trump loves to mock are doing a very un-boring job—holding the entire individual market together.

Why Routing Money Through HSAs Makes Affordability Worse

1. HSAs don’t pay your premiums

Most ACA enrollees’ biggest expense isn’t a random copay—it’s the monthly premium. Trump’s preferred approach (redirecting subsidies into HSAs) doesn’t actually pay those premiums directly. The Washington Post

• HSAs are typically tied to high-deductible health plans (HDHPs).

• The money can help with deductibles, copays, and other out-of-pocket costs—but it often can’t fully cover the premium for a comprehensive plan.

• Bronze-level plans on the ACA exchanges now carry average deductibles near $7,500 per year—before insurance really starts paying. The Washington Post

So Trump is essentially saying:

“We’re going to stop stabilizing your premium and instead hand you a coupon for your $7,500 deductible.”

That’s not reform. That’s cost-shifting.

2. HSAs disproportionately benefit the healthy and the well-off

To benefit from an HSA, you need disposable income to contribute and the ability to front medical costs until you meet your deductible. That’s not the reality for many low- and middle-income families, especially those on tight budgets or with chronic illness.

Study after study, plus past GOP proposals like the Empowering Patients First Act, show that HSA-centric approaches tilt the playing field toward higher-income, healthier households. Wikipedia

Meanwhile, the people who actually need care—diabetics, cancer patients, folks with disabilities—face:

• Higher exposure to out-of-pocket costs

• More risk of skipping care because they can’t afford to “spend down” their HSAs

• Greater odds of ending up in medical debt, collections, or bankruptcy

That’s not empowerment. That’s a cost-sharing time bomb.

3. You still end up paying… the same companies

The supposed genius of Trump’s line—“give the money to the people instead of the companies”—falls apart the moment you ask one simple question:

And who do people pay when they go to the doctor, hospital, or pharmacy?

They pay:

• Insurance companies for premiums

• Provider systems (which are increasingly giant hospital chains)

• Pharmaceutical companies charging monopoly prices

Every dollar that “goes to the people” passes straight through to the same corporations unless you tackle prices and market power. Trump’s plan does not.

Policy experts have already warned that diverting ACA subsidies into individual accounts could push healthier people into cheaper, skimpier plans and leave sicker people trapped in the exchanges—raising premiums and risking a full-blown “death spiral” of the individual market. Politico

So yes, you might technically get the money. But you’re still handing it to the same middlemen, just with less protection.

The Death Spiral Problem: How This Can Blow Up the Market

The ACA depends on a basic tradeoff:

• Everyone—healthy and sick—joins the same regulated markets.

• Subsidies and rules (like pre-existing condition protections) keep coverage accessible and comprehensive.

Trump’s approach breaks that bargain:

1. Pull stabilizing subsidies out of the marketplace structure.

2. Encourage people to chase cheap, high-deductible or short-term plans.

3. Leave sicker and older patients concentrated in the traditional exchange plans.

We’ve already seen what happens when Trump plays games with ACA rules:

• His administration expanded short-term “junk” plans that don’t cover essential benefits and can exclude pre-existing conditions. Wikipedia

• Cutting off certain ACA payments in 2017 forced insurers to raise premiums on exchange plans. Wikipedia

Now add his new idea: drain ACA subsidies into HSAs and let people fend for themselves. Policy experts from both centrist and liberal organizations are already warning that this combination could destabilize the exchanges and push premiums even higher. Politico

The endgame?

• Fewer people insured

• Those who are insured paying more for less

• A system tilted even more toward predatory, bare-bones coverage

Trump’s Broader Record: Less Coverage, More Risk, Same Profits

Trump is selling this as a new idea, but it fits neatly into a pattern:

• Stopping ACA cost-sharing payments in 2017 — projected by the CBO to increase premiums and federal spending. Wikipedia

• Executive Order 13813 — promoting short-term and association health plans with skimpier coverage, undermining ACA protections. Wikipedia

• The “One Big Beautiful Bill” Act — cuts to Medicaid and changes that are expected to leave about 10.9 million more Americans without insurance by 2034, according to the CBO, while raising premiums for many who remain insured. Investopedia

Now he’s adding:

“Let’s grab the ACA subsidies and route them through individual accounts instead of stabilizing the marketplace.”

This is not a plan to make health care affordable. It’s a plan to:

• Reduce federal responsibility

• Shift risk to individuals and states

• Preserve the profit model of insurers and hospital systems

• Let the market “sort out” anyone who can’t keep up

In other words: the opposite of security and affordability.

What a Real Affordability Plan Would Do Instead

If we were serious about making health care affordable, we’d focus on prices and power, not clever ways to hand people coupons.

A real plan would:

• Cap or regulate prices for hospital care, physician services, and prescription drugs—especially in highly concentrated markets.

• Expand public or non-profit coverage options that don’t exist to skim profit off every MRI, chemo infusion, or insulin pen.

• Maintain and strengthen income-based subsidies that directly tie support to the cost of comprehensive coverage, instead of flat deposits that quickly get wiped out by a single ER visit.

• Simplify the system so people don’t have to gamble on networks, deductibles, and exclusions just to avoid financial ruin.

Trump’s “give the money to the people” plan does none of this. It leaves the underlying extortion scheme intact and simply moves the point at which you feel the pain—from your premium bill to your HSA balance to your collection notice.

The Bottom Line

The line “we’re going to give the money to the people instead of the companies” is political poetry, but economic nonsense.

In a system where:

• Prices are unregulated

• Insurance is mandatory for anyone who doesn’t want to risk bankruptcy

• Market power is heavily concentrated in a few giant corporations

…redirecting ACA subsidies into individual accounts doesn’t liberate you. It just makes you the first line of defense against a predatory system that still plays by its own rules.

You don’t defeat an extortion scheme by handing the hostages gift cards.

You defeat it by changing who’s in charge, regulating what can be charged, and making sure no one’s health—and no one’s bankruptcy risk—depends on how well they can navigate Trump’s latest buzzword-driven experiment.