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President Donald Trump has unveiled a new health care framework that would fundamentally change how Americans receive federal financial assistance for medical coverage. The proposal, branded “The Great Healthcare Plan,” calls for sending health care payments directly to households rather than routing federal subsidies through insurance companies.

Trump urged Congress to move quickly to turn the framework into law, presenting it as a way to lower drug prices, increase consumer choice, and reduce overall health care costs. However, health policy experts across the political spectrum say the plan raises serious questions and could backfire if it replaces the current subsidy system without strong safeguards.

What the Plan Proposes

At the center of the framework is a shift away from insurer-based subsidies toward direct payments to consumers. Under the current Affordable Care Act structure, most subsidized marketplace enrollees receive premium tax credits that are sent straight to insurers, reducing monthly premiums at the point of purchase.

Trump’s plan instead supports sending that money directly to eligible Americans, allowing them to decide how to spend it on health insurance and medical care. The White House has said the approach would apply not only to Affordable Care Act enrollees but also to people outside the ACA marketplace.

However, the framework offers few specifics. It does not define eligibility, payment size, spending rules, or whether any existing subsidies would remain in place alongside the direct payments.

Why Experts Are Skeptical

Health economists say the lack of detail makes it difficult to assess the real-world impact, but many see structural risks.

Gerard Anderson, a professor of health policy at Johns Hopkins Bloomberg School of Public Health, said that replacing subsidies with flat payments would likely reduce the overall level of financial assistance many consumers receive today.

If payments fall short of covering premiums, healthier and younger individuals may choose to drop coverage altogether. That would leave an older and sicker risk pool behind, pushing insurers to raise premiums for those who remain insured.

Nick Fabrizio, a health policy expert at Cornell University, also raised concerns about how consumers might use the money.

“If you give people cash without guardrails, there’s a real risk it won’t be spent on health care,” he said, adding that a voucher-style system would be necessary to prevent misuse.

Impact on ACA Subsidies and Coverage

The proposal comes as Congress is already debating whether to revive enhanced Affordable Care Act subsidies that expired at the end of last year. Those subsidies, introduced in 2021, significantly lowered premiums for millions of Americans.

According to estimates from KFF, a nonpartisan health policy research organization, the expiration of those enhanced subsidies could more than double premiums for the average recipient. While baseline premium tax credits still exist, the enhanced support had provided substantially larger assistance for many middle- and lower-income households.

Under the current system, most consumers choose to receive subsidies as immediate premium reductions rather than waiting for a lump sum at tax time. Trump’s framework explicitly criticizes what it calls “billions in extra taxpayer-funded subsidy payments” to insurers and argues that consumers should instead receive that money directly.

Policy analysts say such a shift could complicate bipartisan efforts to restore enhanced ACA subsidies and increase uncertainty for insurers setting future premium prices.

The Role of Health Savings Accounts

Some Republicans have previously supported replacing ACA subsidies with contributions to health savings accounts. Trump’s framework echoes that idea, though it does not explicitly outline an HSA-based system.

HSAs allow consumers to save money tax-free for medical expenses, but they come with limitations. Funds generally cannot be used to pay insurance premiums, and only people enrolled in high-deductible health plans are eligible to contribute.

Matt McGough, an ACA policy analyst at KFF, said those restrictions could prevent many consumers from accessing coverage at all if subsidies were removed.

“You would have hurdles just getting people insured,” he said, noting that HSAs do little to reduce upfront premium costs.

Why the Payment Amount Matters

The size of the direct payment is one of the most critical unknowns. Small payments could disproportionately hurt older Americans, who face significantly higher insurance premiums.

A proposal introduced in December by Senate Republicans would provide annual HSA contributions of $1,000 for individuals ages 18 to 49 and $1,500 for those ages 50 to 64. Policy experts say those figures fall far short of what many households previously received through enhanced ACA subsidies.

For example, a 60-year-old earning roughly $63,000 per year could face annual premiums of around $15,000 without subsidies. Under the enhanced ACA system in 2025, that same individual received roughly $7,300 in federal assistance. A flat $1,500 contribution would cover only a fraction of the cost.

Because premium tax credits vary widely based on age, income, and location, replacing them with uniform payments could create significant winners and losers across the system.

The Bottom Line

Trump’s direct-payment proposal reflects a broader push to give consumers more control over health care spending. While some elements of the framework, such as greater price transparency, have bipartisan appeal, experts warn that replacing subsidies with cash payments could lead to higher premiums, more uninsured Americans, and greater financial strain on households.

As multiple analysts put it, the outcome will depend entirely on the details — details that, for now, remain largely undefined.

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