Trump’s Obamacare Plan Is Still Not Great
The Republican plan to more than double premiums is gone, but the insurance will get worse, and the poor will pay more.
by David Dayen and Ryan Cooper November 25, 2025
One of the main goals of the enhanced subsidies, established in 2021, was to universalize affordable insurance and avoid the “cliff” effect of cutting off aid at a particular income level. The Trump proposal restores that cliff but sets it much higher. Prior to 2021, the cliff was set at 400 percent of the federal poverty level. The Trump plan raises that to 700 percent. This means that single individuals making under around $109,000 a year would qualify for subsidies, as well as a family of four making under $225,000 a year. Most people above that income level are getting their insurance from their employer, and while there will be select cases of people paying far more, they will be less numerous.
The Trump plan also includes nominal minimum payments for everyone—that is, abolishing any zero-premium plans—as a supposed anti-fraud measure. Now, there has been an epidemic of companies cheating the ACA system by signing people up for exchange coverage, or switching their existing coverage, particularly in the insurance fraud hotbed of Florida. Since most people wouldn’t notice or care if they got signed up for a free plan, the insurance broker or agent can fraudulently collect the government subsidy. The Republican idea is that adding a nominal payment would cut down on scamming.
But the root of this problem is malicious companies, not the typical Republican welfare queen stereotype. Previous research has shown that even a tiny cost-sharing requirement, as low as $1 to $5, leads to much reduced insurance enrollment and worse health outcomes among low-income populations. By rights, the government ought to crack down on scammers rather than making the poor pay more—and indeed, under the Biden administration the Centers for Medicare & Medicaid Services had done just that, with plan changes associated with a broker or agent going down by a reported 70 percent as of October last year. Alas, Republicans seem likely to demand their pound of flesh.
The Trump team has a bigger goal, though, of opening up the market to Health Savings Accounts and junk insurance run by middlemen. They’ve hit upon a way to provide cash incentives to make insurance potentially unusable when you actually need it. That will be lucrative to the private contractors with the power and influence to capture the market.
As part of the package, the president’s plan will reportedly include an option he’s been talking about on social media, whereby individuals can receive their subsidy directly rather than giving it to an insurance company. This is fairly insane, because one person will not have the purchasing power of a large pool of insured policyholders to get favorable prices from hospitals and other providers, even if that money is tax-advantaged in some way.
The way Trump gets around that is by using the cash promise as an incentive for people to downgrade their insurance. Under his plan, if someone on the insurance exchanges shifts from a “gold” to a “silver” or “bronze” plan, they will get the difference in subsidy placed into a tax-exempt Health Savings Account, from which they can purchase health care. This may sound attractive—you get your money to do with it as you please!—but it’s just a recipe for worse coverage and more uncertainty.
The lower tiers of ACA plans come with increased out-of-pocket expenses and higher deductibles, which the HSA account is unlikely to offset. The administration apparently wants Congress to appropriate additional “cost sharing reductions” to lower out-of-pocket costs, but that feels like the one thing House Republicans would insist on keeping out of the plan. So people will be enticed into making their insurance crappier in exchange for “cash” tied up in a savings account with limited utility. (UPDATE: Friend of the Prospect Andrew Sprung checks in to note that even the cost sharing reductions idea is a poison pill, designed to eliminate something called “silver loading” that states have used to make ACA plans cheaper and boost enrollment.)
It will also affect everyone who stays in their gold and silver plans. The individuals who want to keep their good coverage are likely sicker patients who know that they need to use insurance over the course of a year. If everyone leaving the better plans is relatively healthier, it makes the “risk pool” of those who remain sicker on average. That will almost certainly raise the costs of that insurance over time.
The HSA money, meanwhile, could end up flowing to a new set of schemes that either promise to close gaps in the bad ACA plans or offer emergency room coverage or some other patch. These could easily herald a return to the bad old days before Obamacare, when insurance was of dubious value when called upon. Trump has been changing federal rules to promote short-term “ junk insurance” plans with limited benefits that trick customers into thinking that they are more comprehensive. Because the plans would exist outside of the ACA framework, for example, they may not cover so-called “pre-existing conditions,” and may exempt basic things like mental health and maternity care.
Trump’s Obamacare Plan Is Still Not Great - The American Prospect
Seems to be a second pass at expanding business for Christian Health Ministries. Lobbyists inserted an exemption in the original law to allow health-sharing programs run by Christian businesses in addition to regulated health insurance policies.
How Obamacare Enabled a Multibillion-Dollar Christian Health Care Cash Grab
How Obamacare Enabled a Christian Health Care Cash Grab — ProPublica |
