After resolving the government shutdown issue, Trump is facing pressure to introduce a new plan to tackle rising healthcare costs in the United States, as subsidies under the Affordable Care Act (ACA), commonly known as Obamacare, are set to expire at the end of the year.
“The only healthcare policy I support or would approve is one that sends money directly to the people,” Trump wrote on Truth Social on November 18, referring to a new healthcare assistance plan he has long promised as a replacement for Obamacare since his first term.
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The idea of transferring funds directly to citizens rather than through insurance companies is being explored by Republican officials as part of efforts to restructure the U.S. healthcare system. In the agreement that reopened the government earlier this month, the House temporarily set aside its dispute over Obamacare-related “tax credits,” which allow Americans to offset healthcare costs against their tax obligations.
Republican proposals remain vague, but party leaders argue that direct payments would be more effective than the current tax-credit system. Meanwhile, Democrats want to strengthen Obamacare by extending pandemic-era subsidies that are set to expire early next year. According to research group KFF, if the tax credits are not renewed, healthcare premiums for 22 million Americans receiving subsidies would double on January 1, 2026. Senate Majority Whip John Thune has pledged to bring the tax-credit issue to a vote in mid-December, though he cannot guarantee full Republican support. House Speaker Mike Johnson has also not committed, insisting the pandemic-era subsidies are “wasteful.”
Even if renewed, the tax credits cannot solve the broader trend of skyrocketing healthcare costs in the U.S., which have become a burden for most Americans regardless of whether they are insured through employers, Medicare, or Obamacare. More than 150 million people covered by employer insurance are expected to see the highest average cost increase in 15 years in 2026. Seniors on Medicare may also face a 9.7% rise in premiums for outpatient services, doctor visits, and medical equipment next year.
Many Republican lawmakers, former Trump officials, and researchers have proposed expanding the role of Health Savings Accounts (HSAs), a system widely used by workers through employer-provided insurance. Individuals can set aside pre-tax income to cover approved medical expenses, typically paired with high-deductible insurance plans.
Senator Bill Cassidy has suggested combining HSAs with lower-tier Obamacare plans, allowing Americans to receive federal funds via HSAs to pay for medical services themselves. Brian Blase, a former Trump White House adviser, argued that the government should shift part of its cost-sharing support for low-income individuals into HSAs. Senator Rick Scott introduced a bill to create “Trump Health Freedom Accounts,” enabling people to use such accounts to pay insurance premiums as well.
Democrats have expressed doubts about both the timing and feasibility of these proposals. Senator Catherine Cortez Masto warned that millions could lose coverage if the House moves too hastily. She suggested extending the tax credits for one more year to give both parties time to evaluate long-term solutions.
Senator Ron Wyden also argued that a comprehensive plan cannot be crafted in just a few weeks, especially as many Obamacare beneficiaries enter a new premium cycle in January 2026.
Economist Robert Kaestner noted that the idea of sending healthcare funds directly to citizens has existed for more than 40 years. He believes the HSA model could work for middle- and upper-income groups, but for low-income individuals, such savings are unlikely to cover large or unexpected medical expenses.