Trump’s U.S. healthcare proposal sparks cost concerns among experts
NEW YORK, UNITED STATES — Healthcare policy experts are raising concerns over United States President Donald Trump’s proposal to give Americans direct payments for healthcare, warning that the plan could lead to higher costs for consumers and destabilize the insurance market.
According to a report from ABC News, critics argue that the proposal lacks sufficient detail, leaving many questions unanswered about its impact on premiums, coverage, and the broader healthcare system.
Unclear impact on premiums and coverage
Experts told ABC News that the plan’s specifics are murky, making it difficult to predict whether it could drive up healthcare costs.
“The president’s idea is sort of a poorly fleshed out idea. Frankly, I think he was just stumbling around to say he has something to offer,” said Leighton Ku, a professor and director of the Center for Health Policy Research at the Milken Institute School of Public Health at George Washington University.
Gerald Anderson, a professor of health policy and management at Johns Hopkins University, outlined two potential scenarios.
The first involves giving ACA policyholders money to pay for services directly, which is likely to have a minimal impact on the insurance industry.
The second would allow Americans to buy any insurance outside the ACA marketplace, which could undermine standardized coverage.
“If that’s the scenario, that could have a profound effect on the ACA and the system because the ACA was set up to make sure that the insurance packages that were on the exchange were valid and provided services to the people,” Anderson explained.
Ku added that while young, healthy Americans might benefit from direct payments, older or chronically ill individuals could struggle.
“On the other hand, if you are older or a person who has some chronic disease problem like diabetes, like heart disease, like HIV, the health insurance [may] be extraordinarily expensive and getting $1,000 relative to what you would get right now as the subsidy under the ACA marketplace is completely insufficient,” he said.
Financial risks for insurers and system stability
Experts cautioned that if people opt to allocate direct payments to other necessities instead of premiums, it could negatively impact insurance companies’ bottom line.
“The question is, would they use it to buy health insurance, or would they just keep it because they have to make a car payment, or they have to buy food or something like that? And so, the insurers would be very concerned that that money would never get to them,” Anderson noted.
Ku further highlighted structural problems with the plan, pointing out that it ignores the medical loss ratio requirement under the ACA, which mandates that insurers spend at least 80% of premiums on healthcare services.
“There’s less financial protection for the individuals. So, that’s why [Trump’s plan] is structurally something that is considered a bad idea,” he said.
In the outsourcing world, the potential shift in how payments are handled could also affect outsourced healthcare services, including claims processing and administrative functions often handled by third-party providers.
If insurers receive fewer direct funds due to Americans redirecting payments, outsourced service providers may face reduced demand or contract renegotiations, highlighting the plan’s ripple effects beyond direct healthcare costs.
