In saying its “Great Healthcare Plan” in January 2026, the Trump administration turned the newest in an extended historical past of efforts by the U.S. authorities to rein within the hovering price of healthcare.
As a doctor and professor learning the intersection of business and health, I do know that the challenges in reforming the sprawling U.S. healthcare system are immense. That’s partly for political and even philosophical reasons.
Nevertheless it additionally displays a complex system fraught with competing interests—and the truth that sufferers, hospitals, medical insurance firms, and drug producers change their behaviors in conflicting methods when confronted with new guidelines.
Hovering prices
U.S. healthcare is the most expensive in the world, and in keeping with a ballot printed in late January 2026, two-thirds of People are very worried about their ability to pay for it—whether or not it’s their drugs, a physician’s go to, medical insurance or an unpredictably expensive medical emergency.
Disputes over well being coverage even performed a central role within the federal government shutdown in fall 2025.
Trump’s healthcare framework outlines no particular coverage actions, however it does set up priorities to deal with a variety of longtime considerations, together with prescription drug costs, worth transparency, decreasing insurance coverage premiums, and making medical insurance firms usually extra accountable.
Why have these challenges been so troublesome to deal with?
Drug worth sticker shock
Prescription drug prices within the U.S. began rising sharply in the 1980s, when drugmakers elevated the event of innovative new treatments for common diseases. However efforts to fight this pattern have resembled a sport of whack-a-mole as a result of the elements driving it are so intertwined.
One situation is the distinctive set of challenges that outline drug improvement. As with all shopper good, producers worth pharmaceuticals to cowl prices and earn earnings. Drug manufacturing, nonetheless, involves an expensive and time-consuming development process with a high risk of failure.
Patent safety is one other situation. Drug patents last 20 years, however finishing expensive trials vital for regulatory approval takes up a lot of that interval, decreasing the time when producers have unique rights to promote the drug. After a patent expires, generic variations will be made and bought for considerably much less, decreasing the earnings for the unique producer. Although some knowledge challenges this claim, the pharmaceutical industry contends that top costs whereas medication are below patent assist firms get well their funding, which then funds the invention of latest medication. They usually usually find ways to extend their patents, which retains costs elevated for longer.
Then there are the intermediaries. As soon as a drug is in the marketplace, costs are sometimes set by negotiations with directors known as pharmacy benefit managers, who negotiate reductions and rebates on pharmaceuticals for well being insurers and employers providing advantages to their employees. Pharmacy profit managers are paid based mostly on these reductions, so they don’t have an incentive to decrease whole drug costs, although new transparency rules enacted February 3 intention to alter fee practices. Drugmakers usually raise the list price of medication to make up for the markdowns that pharmacy profit managers negotiate—and possibly even more than that.
In lots of international locations, centralized authorities negotiators set the worth for pharmaceuticals, leading to decrease drug costs. This has prompted American officers to think about using those prices as a reference for setting drug costs right here. In its blueprint, the Trump administration has known as for a “most-favored nation” drug pricing policy, below which some U.S. drug costs would match the bottom costs paid in different international locations.
This will work within the quick time period, however producers say it may additionally curtail investment in innovative new drugs. And a few business specialists fear that it could push producers to raise international prices.
Coverage specialists have questioned whether or not TrumpRx will carry down drug costs.
In late 2025, 16 pharmaceutical companies agreed to most-favored nation pricing for some medication. Shoppers can now purchase them instantly from producers through TrumpRx, a portal that factors customers to drug producers and offers coupons for buying greater than 40 extensively used brand-name medication at a reduction, which launched February 5. Nonetheless, many medication accessible by the platform can be purchased at lower prices as generics
Growing worth transparency
Fewer than 1 in 20 People know how much healthcare services will cost earlier than they obtain them. One repair for this appears apparent: Make suppliers listing their costs up entrance. That method, customers may evaluate costs and select essentially the most cost-effective choices for his or her care.
Spurred by bipartisan support in Congress, the federal government has embraced price transparency for healthcare companies over the previous decade. In February 2025, the Trump administration announced stricter enforcement for hospitals, which should now publish precise costs, fairly than estimates, for frequent medical procedures. Knowledge is combined on whether or not the method is working as deliberate, nonetheless. Hospitals have diminished costs for folks paying out of pocket, however not for those paying with insurance, in keeping with a 2025 examine.
For one factor, when laws change, firms make strategic choices to attain their monetary objectives and meet the brand new guidelines—typically yielding unintended penalties. One examine discovered, for instance, that worth transparency laws in a sequence of clinics led to an increase in physician charges to insurance companies as a result of some suppliers who had been charging much less raised their costs to match costlier opponents.
Moreover, a 2024 federal authorities examine discovered that 46% of hospitals were not compliant. The American Hospital Affiliation, a commerce group, recommended worth transparency imposes a high administrative burden on hospitals whereas offering complicated data to sufferers, whose prices could fluctuate relying on distinctive elements of their circumstances. And the effective for noncompliance, $300 per day, could also be insufficient to offset the cost of disclosing this information, in keeping with some well being coverage specialists.
Past excessive prices, sufferers additionally fear that insurers won’t actually cover the care they obtain. Cigna is at present combating a lawsuit accusing its medical doctors of denying claims almost instantly—within an average of 1.2 seconds—however considerations about claims denial are rampant throughout the business. Companies’ use of artificial intelligence to deny claims is compounding the issue.
Curbing the rise in medical insurance premiums
Many People struggle to afford monthly insurance premiums. However curbing that enhance considerably could also be not possible with out reining in general healthcare prices and, paradoxically, maintaining extra folks insured.
Insurance coverage works by pooling cash paid by members of an insurance coverage plan. That cash covers all members’ healthcare prices, with some utilizing greater than they contribute and others much less. Premium prices therefore depend on how many individuals are within the plan, in addition to the companies insurance coverage will cowl and the companies folks really use. As a result of healthcare prices are rising general, business insurance coverage firms may not be able to significantly lower premiums with out decreasing their potential to cowl prices and soak up danger.
Nearly two-thirds of Americans under age 65 obtain medical insurance by employers. One other 6.9% of them get it through Affordable Care Act marketplaces, the place enrollment numbers are extraordinarily delicate to premium prices.
Enrollment in ACA plans nearly doubled in 2021, from about 12 million to greater than 24 million, when the federal government launched subsidies to scale back premiums through the COVID-19 pandemic. However when the subsidies expired on January 1, 2026, about 1.4 million dropped coverage, and for many who didn’t, premiums more than doubled. The Congressional Funds Workplace initiatives that another 3.7 million will become uninsured in 2027, reversing some of the huge gains made for the reason that ACA was handed in 2010.
When medical insurance prices rise, healthier people may risk going without. Those that stay insured have a tendency to want extra well being companies, requiring these extra expensive companies to be lined by a smaller pool of individuals and elevating premium costs even greater.
The Trump administration has proposed routing the cash spent on subsidies on to eligible People to assist them buy medical insurance. How a lot folks would obtain is unclear, however amounts in previous proposals wouldn’t cowl what the subsidies supplied.
To sum it up, healthcare is extraordinarily difficult and there are quite a few obstacles to reforms, as successive U.S. administrations have discovered over time. Whether or not the Trump administration finds some success will rely upon how effectively the insurance policies are in a position to surmount these and different obstacles.
Patrick Aguilar is the managing director of well being at Washington University in St. Louis.
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