Verdict: The "Great Healthcare Plan to Lower Costs", not So Great
To be a Prepared Patient (and Consumer), it is important to know where the winds are blowing with regard to health care. There has been mounting pressure on the Trump Administration to propose solutions to our health care crisis and so the White House released its plan. In this newsletter, I will break it down, but first, some background for the problem of U.S. health care.
The Affordability Crisis
My friend's son is between jobs. He just turned 27 years old and so is no longer eligible to stay on his parent'’ health insurance. He chose a plan on the ACA Marketplace this past fall and while renewing, found that he lost the enhanced subsidy which made the premiums affordable. The result is his premium increased substantially. Despite having a chronic condition that requires ongoing care, he chose a "lesser" plan to reduce his monthly premium but knows that because he needs care, his out-of-pocket expenses will be substantially more than last year. My friend told me that her son plans to cut back on physician visits and look for cheaper medications. Compared to others I know who are older and require far more health care, he is relatively fortunate. I have other acquaintances who have told me that they have not signed up for a health plan this year, testing their luck that they won't get sick or have an accident that requires expensive care that they cannot afford.
The U.S. is experiencing a deepening health care affordability crisis driven by skyrocketing medical expenses, rising insurance premiums, and diminishing financial protections. National health spending now accounts for an unusually large share of economic output, far above peer nations, and costs continue to grow faster than wages, straining household budgets and public finances alike. Without federal subsidies, premiums for 24 million people who access their insurance from the ACA Marketplace have increased dramatically, in some cases more than doubling, prompting people to downgrade coverage or forgo insurance entirely—a situation described as an affordability “cliff.” This crisis isn’t limited to the ACA Marketplace and insurance premiums; a large share of adults finds out-of-pocket medical costs and deductibles difficult to afford, and many delay or skip needed care because of cost concerns. Affordability is now the top health concern for Americans, with polls showing that cost outranks access and other health issues as the most urgent systemic problem.
For many individuals and families, high health care costs translate directly into financial strain, debt, and difficult life choices. A substantial portion of Americans report trouble paying medical bills, resulting in medical debt that can exceed thousands of dollars and is concentrated among both uninsured and underinsured households. These costs often force people to cut back on essentials like food or savings, postpone care, or stay in jobs they might otherwise leave just to keep health benefits. Even those with employer-sponsored insurance face rising premiums, deductibles, and coinsurance, meaning coverage does not fully protect them from financial burden. The inability to afford care leads a significant share of adults to delay or forego doctor visits, prescriptions, or preventative care—actions with real consequences for long-term health and financial security.
Why Health Care Doesn't Work Like a Normal Market
Some commenters will have us believe that health care is is like any other commodity or service in our economy. That if we just got rid of insurance, enforced price transparency and promoted self pay, we could solve our health care crisis. Not so fast. To be a Prepared Patient is to understand how health care is different.
According to healthcare economics research, the U.S. healthcare system doesn't follow the same economic rules as most other industries because it breaks the basic requirements for competitive markets to work well. In typical markets, customers know what they're buying, care about prices, can wait to make purchases, and can freely choose between different options. Healthcare is completely different: people need care unpredictably and often urgently; patients don't have the medical expertise to judge whether treatment is necessary, high-quality, or if better alternatives exist; and doctors, not patients, usually make the decisions, acting more as advisors than neutral sellers. Health insurance, which people need to protect themselves from devastating medical bills, creates another problem by separating patients from the actual costs, which weakens the price sensitivity that normally keeps markets in check. These built-in features create well-known issues like moral hazard (using more care because insurance pays), adverse selection (sicker people seeking more coverage), powerful healthcare providers who can control prices, and complicated administrative systems, all of which require government regulation and shared financing arrangements that regular consumer markets don't need.
Healthcare Isn't Optional
Most importantly, healthcare isn't a regular product in either a moral or economic sense because people don't have a choice about needing it: people must have care to survive, function, and participate in society. Unlike things people buy by choice, individuals can't realistically "decide" whether they need emergency surgery, cancer treatment, or insulin. They also can't comparison shop in the moment or put off getting care when prices go up. Treating healthcare like a typical market product leads to outcomes that would be unacceptable for other goods like people going bankrupt from illness, delaying or skipping necessary care, and unequal access based on how much money people have rather than what they actually need. Healthcare economics research consistently demonstrates that because healthcare involves life-or-death necessity, unpredictability, and patients knowing far less than providers, efficiency and fairness can't be achieved through normal market forces alone. Therefore, healthcare must be treated differently from other goods and services—more like roads, schools, or other public infrastructure—where government oversight, shared risk through insurance pools, and values like fairness and access are just as important as economic efficiency.
The Great Healthcare Plan - Not a Solution, Not a Plan
1) Lowering Prescription Drug Prices
Plan goal: Codify “Most Favored Nation” pricing so Americans pay the lowest prices seen in other countries.
Why it won’t work: Many economists and industry experts argue that forcing U.S. prices down to match other countries can reduce incentives for pharmaceutical innovation and discourage investment in new drug development, because revenues are a key driver of R&D. Moreover, other countries’ price controls often lead to restricted access or delayed launches, outcomes U.S. patients will likely not tolerate.
2) Making More Drugs Available Over the Counter
Plan goal: Expand over-the-counter (OTC) availability for “verified safe” drugs to cut costs and reduce doctor visits.
Why it won’t work: This benefits only a narrow category of low-risk medications; most high-cost prescription drugs can’t safely be made OTC, so this won’t meaningfully reduce overall drug spending or premiums. It also risks misuse or inappropriate self-treatment if patients self-diagnose beyond OTC indications.
3) Lowering Insurance Premiums by Direct Payments to Individuals
Plan goal: Replace government subsidies to insurers with direct cash payments to consumers to buy coverage.
Why it won’t work: Direct payments or health savings account (HSA) funding does not guarantee comprehensive coverage and could push lower-income people into cheaper, less protective plans. For out of pocket payments for care, the amounts being proposed won't cover most health care costs even for those who are relatively healthy. Experts warn that this could undermine shared risk pools (a core function of the ACA marketplace), raising premiums for sicker individuals and increasing the uninsured rate.
4) Ending PBM “Kickbacks”
Plan goal: Eliminate middleman payments that allegedly raise insurance costs.
Why it won’t work: While transparency around PBM practices is useful and PBM practices need to be reigned in, “ending kickbacks” alone won’t lower prices if underlying negotiated prices remain high and insurers still lack bargaining leverage, particularly in concentrated provider markets. This simplifies a complex pricing network without addressing root causes.
5) “Plain English” Insurance Standards
Plan goal: Require insurers to post easily understandable pricing, denial rates, and profit/overhead data.
Why it won’t work: Greater transparency is valuable and should be enforced, but doesn’t automatically reduce premiums or improve access; consumers often cannot meaningfully compare plans because real prices depend on individual health needs and network details, and many people lack tools or expertise to interpret complex data even in plain language.
6) Maximizing Price Transparency for Providers and Insurers
Plan goal: Force hospitals and insurers to display prices prominently.
Why it won’t work: Price transparency has been required in some forms for years with limited impact on actual prices, because negotiated rates vary and patients rarely (if ever) “shop” for urgent or specialized care. Who would shop for the cheapest surgeon? Transparency alone doesn’t give consumers bargaining power in markets where competition is weak or information remains hard to use.
Overall Implementation and Detail Shortfalls
Issue: The plan is a broad framework that lacks specifics on funding, eligibility, or legislative pathways.
Why this matters: Without clear mechanisms, timelines, or consensus in Congress, experts say the proposal is unlikely to translate into meaningful cost reductions and may destabilize existing insurance markets, especially as enhanced ACA subsidies have expired or are under debate. This will and is already harming patients who are forgoing coverage and treatment.
Bottom Line
The Great Healthcare Plan's focus on codifying drug pricing deals, replacing traditional subsidies with direct payments, and increasing transparency comes as insurance affordability is already deteriorating. For example, premiums for 14 million people using ACA marketplace plans are now more than double without the renewed subsidies, causing many to drop coverage.
Health policy experts warn that replacing income-based subsidies with direct payments or health savings accounts would likely reduce overall coverage, especially among low-income individuals and those with pre-existing conditions, while destabilizing insurance risk pools and driving premiums even higher. Congressional Budget Office analyses estimate that parallel cuts to Medicaid and ACA supports could leave roughly 10–11 million people uninsured by 2034 and increase uncompensated care costs by tens of billions of dollars, burdening hospitals and safety-net providers. Reduced insurance coverage and higher out-of-pocket costs are well-documented to worsen health outcomes through delayed care and higher mortality—some analyses project tens of thousands of preventable deaths annually under similar policy scenarios. While specific plan components may reduce certain prices on paper, the broader consequence of reduced coverage and financial protection would likely worsen overall affordability, increase financial risk for families, and strain healthcare providers, particularly in rural and underserved communities.
Now more than ever, it is critical to be a Prepared Patient. My book, The Prepared Patient: Your Guide to Surviving the Healthcare System can help you become more knowledgeable about how to choose your care, your coverage and know your rights to protect your health and finances. It is to be released soon by Johns Hopkins University Press.