A “Great Healthcare Plan,” but Few Answers on Affordability
Transparency and discount programs were highlighted, but structural cost drivers went unaddressed.
Affordability is a top concern
As President Trump delivered his State of the Union address, he spoke about strength, growth and a “great healthcare plan.” But for many Americans, one question remains: Why does healthcare cost so much, and what will make it more affordable?
According to KFF polling, the cost of healthcare is Americans’ #1 financial worry — more than the affordability of food, rent, utilities, or gas. remains one of the public’s top financial concerns. Over half of Americans say their healthcare costs have increased over the past year, and 2/3 say Congress should not have allowed enhanced Affordable Care Act (ACA, aka “Obamacare”) subsidies to expire. Meanwhile, Pew Research has also reported that the majority of Americans and many Republicans believe it’s the federal government’s responsibility to ensure healthcare for all, even if they disagree on how to get there.
In that context, the president’s speech offered broad goals but few details on how to lower premiums, deductibles and drug prices in a lasting way. For families paying thousands of dollars each year for coverage, those details matter.
What is driving higher healthcare costs?
Healthcare prices rise for several reasons.
Hospital systems have merged in many parts of the country, which can reduce competition and raise prices. Prescription drugs in the United States are often more expensive than in other countries. Administrative costs, including billing and insurance paperwork, also add to overall spending.
The president again highlighted price transparency. During his first term, rules required hospitals and insurers to post negotiated prices. However, compliance has been uneven and the posted data can be difficult for consumers to use.
(Later today, I’m helping a friend get estimates for abdominal hernia repair surgery. She hasn’t been able to get a quote from her insurance company or the area hospitals. I’ll let you know how that goes.)
Transparency may help over time, but so far it has not led to broad reductions in prices.
Who would benefit from “Trump Rx”?
The president promoted TrumpRx, where you can download coupons so you can buy prescription drugs at discounted prices if you’re paying cash without insurance.
The impact would likely differ by group.
Many Medicare beneficiaries now have a $2,000 annual cap on out-of-pocket prescription costs under recent federal law. For them, negotiated Part D prices may already offer protection.
For most people with insurance through their job, they’re probably better off using their insurance coverage to buy prescriptions. Their prescription spending often counts toward annual deductibles and out-of-pocket limits. Paying cash outside their insurance plan may not count toward those limits.
If you’re uninsured and can’t afford to may for insurance premiums, you probably can’t afford to pay cash for a brand-name prescription medication, even at a discount.
TrumpRx coupons may be most helpful for medications that are often not covered by insurance, such as IVF drugs or GLP-1 weight-loss treatments. It was not a coincidence that President Trump highlighted Catherine Rayner as the first customer of the new TrumpRx website.
During his address, the president introduced Rayner and shared that she and her husband had struggled with infertility. He said an IVF medication she had previously paid about $4,000 for was available for under $500 through TrumpRx.
Her story illustrated how discounted cash pricing can help patients who are paying entirely out of pocket for medications that insurance typically does not cover — in this case, a drug used for in-vitro fertilization.
President Trump’s “Great Healthcare Plan”
The president also spoke about his broader healthcare plan. One plan is to give insurance subsidies directly to individuals instead of offering them as tax credits.
But the size of those subsidies matters much more than how they’re delivered. Insurance premiums tend to rise along with inflation and overall healthcare costs. If subsidies don’t increase at the same pace, coverage becomes less affordable over time.
Congress allowed the expiration of enhanced ACA subsidies, which lowered premiums for millions. Many Americans are concerned about the impact of those changes.
What voters will be watching
Healthcare affordability affects nearly every American household. Surveys show strong public interest in lowering costs and maintaining coverage. While the State of the Union address outlined goals such as competition, transparency and new drug purchasing options, questions remain about how those ideas would reduce costs for most families.
President Trump didn’t address the biggest driver of healthcare spending hospital care and physician services.
With the midterms on the horizon, healthcare costs may once again become a defining kitchen-table issue. The question for voters will be simple: Are their bills getting smaller, or not?