Trump’s proposal would revive “catastrophic” plans with deductibles as high as $31,000 — shifting even more costs onto patients with cancer, chronic illness, and medical emergencies.

On Friday, Erica Bersin – who has two chronic illnesses, including multiple sclerosis – wrote about the challenges of finding a decent and affordable health plan in the ACA marketplace. As a sole proprietor, the only plan with a manageable premium ($330 a month) came with a $10,000 deductible. MS drugs are expensive and many people with the disease have to pay hundreds and sometimes thousands of dollars out of their own pockets before their coverage kicks in. Sadly, the way the ACA plans are structured, Americans with chronic conditions – and others who are diagnosed with cancer or have a heart attack or other acute medical event and have no option for coverage other than the ACA marketplace – are penalized financially far more than the rest of us..

But instead of helping those folks out, the Trump administration is proposing to change the marketplace in ways that will make a $10,000 deductible seem like a bargain. Say hello to a $31,000 family deductible. And even if you’re covered by an employer-sponsored plan and in no imminent danger of being enrolled in a plan like that, know that their reappearance (they were outlawed 16 years ago), will push your premiums even higher than they already are. That’s because hospitals and physician practices know people enrolled in those plans will not be able to pay their bills. They’ll have no option but to increase their prices to cover the additional bad debt.

Health insurance policies with deductibles that high were prevalent before the Affordable Care Act was enacted in 2010. When I was a health insurance executive, I knew some insurers were selling policies with family deductibles north of $50,000. Not only that, many of them had annual and lifetime caps and wouldn’t pay for any care related to a preexisting condition.

They were officially called “catastrophic” plans. Patient and consumer advocates had a more appropriate name for them: junk plans. They were outlawed by the ACA, and I thought they had been buried for good. Unfortunately, the Trump administration is bringing them back to life.

I’m sure my former colleagues in the health insurance business went to work immediately getting those plans ready to sell once again to unsuspecting customers. That’s because they can be very, very profitable. Imagine having to pay $50,000 – or even $31,000 – out of your own pocket every year before your insurer will cover the care your doctor says you need. Cigna, where I worked, as well as Aetna and UnitedHealthcare, the country’s biggest health insurers, sold plans like that and collected billions in premiums every month but paid little if anything out in claims during a given year.

When I first testified before Congress, I was one of three people at the witness table, and all of us knew a lot about those plans – including Nancy Metcalf, who was senior program editor at Consumer Reports at the time. She in particular knew about the many shortcomings of those plans because she had heard horror story after horror story from people who had enrolled in a junk plan. She urged lawmakers to outlaw them – or at least make insurers put warning labels on them so people would know what they were buying and how little protection those plans provided. As Nancy testified:

Consumers need to be told, in big letters, what their policy’s out-of-pocket limit is, and right next to it, in equally big letters, if there are any expenses that don’t count towards that. They need to know approximately what their out-of-pocket costs will be for expensive treatments such as cancer chemotherapy, or heart surgery, or infusions of patented biologic drugs. They need, in other words, a fighting chance not to be ripped off by junk insurance.

As Reed Abelson of The New York Times reported last week, the administration’s proposal “involves a type of plan known as a catastrophic or skinny policy. While they may be appropriate for someone who is young and healthy, a sudden emergency room or unexpected hospital stay could cost thousands of dollars in unforeseen bills. People with chronic medical conditions also might have to pay for much – if not all – of their care out of their own pockets.”

Commonwealth Fund president Joseph Betancourt pointed out in the Times’ story that people are already struggling to pay for their medical care:

There’s no doubt that we have an affordability crisis. As we move forward to shifting more of the burden to patients, there’s a chance to really exacerbate the crisis.

Abelson noted that under the proposed rule change, insurance companies could not only sell the catastrophic plans on a multiyear basis once again, they could also sell plans that do not offer an established network of hospitals and doctors. “Those plans,” she wrote, “would instead pay a fixed amount for a doctor’s visit or procedure, and patients would have to pay any difference in price.”

Abelson also warned of another risk associated with sky-high deductibles: Because their premiums are lower, they “will end up being used as the benchmark for the level of subsidies in a given market. People who want a traditional plan with an established network could end up paying more because they receive a lower subsidy.”

As I mentioned, all of us will likely pay more for our coverage when these plans become legal again next year. As BenefitsPro reported last month – quoting the CEO of Community Health Systems, a big hospital chain – most patients who are currently in ACA plans with lower but still high deductibles and coinsurance requirements can’t pay very much of the “big out-of-pocket bills” hospitals have to send them.

It’s only going to get worse.

How disappearing ACA subsidies, soaring premiums, and bureaucratic chaos nearly left a consultant with multiple sclerosis uninsured.

The business of health care is not broken; it is working exactly how it was intended. It was designed for people to pay in just in case something happens and then not to pay out when it does. It was intended to “maximize shareholder value.”

About 22 million Americans received enhanced premium subsidies in 2025. According to The Urban Institute and The Commonwealth Fund, it’s estimated that “7.3 million people will leave the ACA marketplace in 2026” due to the loss of the subsidies. About 5 million people will go uninsured, rather than find insurance elsewhere.

Some people have said their premiums and deductibles are doubling or even tripling with tens of thousands in deductibles before coverage kicks in. While absolutely imperfect, we must keep the Affordable Care Act intact for everyone otherwise the cost of Medicare, Medicaid, and private and employer-based insurance will skyrocket, resulting in millions of people losing coverage due to lack of affordability.

Accessible insurance is a huge part of living a healthy life. Because of this, we need to expand coverage and make it fair for everyone. The goal should be for every single person in the U.S. to have head-to-toe health care.

My Story

As a single-person LLC consultant, I have navigated the New York State Exchange (ACA) for years. It is the most expensive Exchange in the country for those who do not qualify for subsidies. If subsidies are received, an increase in income requires repayment via federal tax returns the following year.

For 2025, I resigned myself to a catastrophic plan at $330 per month with a $10,000 deductible, as other options approached $1,000 monthly. While applying in November 2024, my temporarily being in-between projects / contracts was interpreted by the NYS Exchange as being unemployed, which led me to unexpectedly qualify for Medicaid. The state market assured me that this was correct for consultants in my situation, and they “saw it all the time.”

However, during open enrollment in October 2025, I was informed that despite meeting the income threshold, I no longer qualified for either Medicaid or financial assistance / subsidies. The catastrophic plan doesn’t seem to exist now, and the “least expensive” option is $675 with poor / limited coverage. After four months, dozens of phone calls, six people (including an aide in my state assembly member’s office), and about 100 hours of everyone’s time, I have health insurance this year, for now.

Living with two chronic illnesses, including multiple sclerosis, my experience with a “government run” system over the last year has led me to believe that, for the most part, it works. Health care should be a right of birth, not a privilege for the rich.

This is just one person’s story. The rise in health care costs impacts everyone, but especially lower income Americans. You can see some of their fears, here.

Sweeping changes to Medicaid and the Affordable Care Act are combining with rising health costs to make 2026 a high-stakes year for hospital operators.

Why it matters: 

While major health systems like HCA are likely to weather the worst, some safety net providers and facilities on tight margins could close or scale back services as uncompensated care costs mount and uncertainty around future policies swirls.

• “We took a big hit in 2025,” said Beth Feldpush, senior vice president of policy and advocacy at America’s Essential Hospitals.
• “I don’t think that the field can absorb any further hits without us really seeing a crisis.”

State of play: 

Last year’s GOP tax-and-spending law will decrease federal Medicaid funding by nearly $1 trillion over the next decade, translating into millions more uninsured, lower reimbursements and higher costs for hospitals.

• The Trump administration is also considering big changes to the way Medicare pays for outpatient services that could reduce hospital spending by nearly $11 billion over the next decade, including paying less for chemotherapy.

Hospitals have the rest of this year to boost their balance sheets, invest in technology including AI, and even consider merger plans before the biggest changes take effect in 2027, Fitch Ratings wrote in its annual outlook for the nonprofit hospital sector. The financial outlook remains stable for the sector overall next year, the report predicts.

• “People are already very proactively looking at those out years and saying, if that’s the worst-case scenario that I’ve got to deal with, what can I do today to make that impact less,” said Kevin Holloran, a senior director at Fitch.

Threat level: 

Hospitals in some instances have started closing unprofitable services like maternity care and behavioral health care in the face of financial pressures.

• More than 300 rural hospitals are at immediate risk of closing their operations entirely, according to a December report.
• Safety net providers also are going to court to fight an administration effort to make them pay full price for medicines they currently get at a steep discount and reimburse them later if they’re found to qualify under the government’s 340B discount drug program.
• “Those hospitals that have been underperforming … they are going to continue to struggle,” said Erik Swanson, managing director at consulting firm Kaufman Hall. “Those who are doing really, really well may continue to see growth in their performance.”

Private equity firms will likely continue buying up and building new businesses in outpatient service areas like ambulatory surgery, labs and imaging, he said.

• “Hospitals and health systems should continue to expect quite a bit of challenge and disruption in those spaces.”

Congress still could extend the industry some lifelines, though any effort to delay or roll back some of the biggest Medicaid cuts face tough odds this year.

• Sen. Josh Hawley (R-Mo.) introduced a bill to repeal parts of the GOP budget law that would slash hospitals’ Medicaid dollars.
• Lawmakers are debating whether to renew enhanced ACA subsidies that expired at the end of 2025 and could result in millions more uninsured patients, but that effort would also have to overcome significant GOP opposition.
• “Our job is to make sure that we create a predicate that, as these provisions come online, they may very well need to be revisited,” said Stacey Hughes, the American Hospital Association’s executive vice president for government relations and public policy.

What’s ahead: 

Beyond policy changes, hospitals also are dealing with inflationary pressures, including rising medical supply costs, and administrative overhead from insurer pre-treatment reviews.

• Those trying to pad their margins may ramp up their use of artificial intelligence to code patient visits in a way that increases reimbursements from public and private payers, Raymond James managing director Chris Meekins wrote in an analyst note.
• While hospitals have historically been able to navigate big policy challenges, if things don’t go their way, it could turn into a “tornado of trouble,” Meekins wrote.

Over the last few years, I have written for the Rockefeller Institute about trends in healthcare. In 2023, I chose ten trends, including staffing challenges, the increasing role of non-traditional players in health, such as Walmart and CVS, as well as the increasing role of private equity in healthcare, the movement toward value-based care, and the growing use of digital health—all trends that I expect to continue. In 2024, I highlighted a mega trend specific to the provider community, in which a number of factors had combined to lead to the segmentation of the industry into three different categories of entities. Those included what I categorized broadly as “today” entities (i.e., those that we know as traditional providers, many of whom are fighting for their sustainability), “tomorrow” entities (i.e., non-traditional entities that are not necessarily healthcare entities but are in the healthcare space and are typically part of a larger conglomerate or backed with private equity), and “striving survivors” (i.e., today entities that are adapting radically or partnering with tomorrow entities to exist in the future).

The following January, I picked five issues to watch in healthcare in 2025. They were (1) the continued expansion of computational data technologies, especially artificial intelligence (AI); (2) insurance coverage shifts; (3) consolidation in the overall industry; (4) payment, costs, and coverage for pharmaceuticals; and (5) exponential advancements in life sciences.

This blog reviews the status of those 2025 trends and suggests one additional issue that may garner more attention in 2026: the overall cost, pricing, and affordability of healthcare. I discuss the factors pushing this issue into the spotlight and potential options for policymakers to counteract this trend.

A Status Review of the Five 2025 Trends

Before delving into the newly highlighted trend of the cost, price, and affordability of healthcare, it is worth briefly reviewing the status of the five trends that were identified in 2025, since all of them will continue to be important in 2026.

1. The continued expansion of computational data technologies, especially AIIssue Updates. There has been no slowdown in the use of computational data technologies and AI in healthcare since I wrote about it in 2023, and as part of the trends last year. In April 2025, the healthcare AI company Innovacer did a survey of AI use in the sector. The company’s report noted that adoption of AI is expected to continue its growth as more tools become available for a variety of purposes, including quicker and more effective disease diagnosis, administrative process improvement, and electronic health record management. JP Morgan likewise reported in December 2025 that AI-focused deals now make up 75% of health tech funding. Some of the more interesting areas of advancement are in genomics, remote patient monitoring, medical imaging, and improved documentation. And the use of ambient products that help capture health data from conversation saw some of the biggest growth yet in 2025. On the consumer side, more and more patients (an estimated 40 million people) are using chatbots to help them with making decisions about their own care, while the integration of AI with robotics is increasingly being used to assist physicians with surgery. And very recently, in January 2026, OpenAI released a chatbot specifically for health care.Policy Responses and Options. In terms of policy, there have been different federal actions designed to accelerate AI adoption and use, including a handful of executive orders in 2025. In healthcare specifically, the Department of Health and Human Services issued its AI strategy on December 5, 2025. And there have been federal investments announced that support the use of AI to advance research and cancer treatment. In addition, on December 19, 2025, the Trump administration asked for public input on how technology adoption in healthcare—especially AI—could be accelerated. At the state level over the last year, 47 states issued more than 250 bills to regulate AI in healthcare (with at least 30 bills signed into law). The bills ranged from ones protecting minors from mental health AI-enabled chatbots to bills barring AI from making therapeutic decisions or interacting with patients without licensed oversight. And states like New York are incentivizing more use of AI in healthcare through the use of partners that improve care and strengthen operations, as well as evaluating best-in-class AI tools.
2. Insurance coverage shifts Issue Updates. In January 2025, I noted the possibility that insurance coverage was likely to shift, in part, because of the possible expiration of the Enhanced Premium Tax Credits (EPTCs) at the end of 2025. The EPTCs were enhanced in 2021 under the American Rescue Plan Act and are sometimes referred to as the “Obamacare subsidies.” They were intended to reduce the cost that people pay when they obtain coverage from qualified health plans on the health exchanges. Although some proposals were made by both Democrats and Republicans at the end of 2025 to help mitigate the impact of the loss of the EPTCs, none of the proposals were able to gain enough bipartisan support to be signed into legislation in 2025, resulting in a spike in costs for premiums starting January 1, 2026. As this blog was being written, Congress was debating the possible partial extension of these credits in some form, although passage was not certain. Either way, it is likely that healthcare coverage will continue to be a topic of much debate in Congress in 2026.In addition, in 2025, changes made to Medicaid coverage in the One Big Beautiful Bill Act (otherwise known as HR1) are also likely to impact insurance costs and coverage in 2026. The changes to health insurance coverage in HR1 were outlined in a paper by the Institute in mid-2025 and will have varying impacts on both funding and coverage over the coming months and years. As I later wrote about with colleagues, additional federal rule changes in 2025 will also impact public insurance coverage in the future. The Urban Institute estimates that close to five million people may lose coverage in 2026, although the exact number who lose coverage versus those who choose cheaper and less expansive coverage options with fewer benefits has yet to be fully analyzed.Policy Responses and Options. With the expiration of the EPTCs and changes in federal reimbursement for coverage of immigrant populations, state policymakers will need to make decisions in 2026 about who and what may be covered with state-only dollars. States appear to be taking different approaches. By mid-2025, the Kaiser Family Foundation reported that of the 14 states that offer health coverage to at least some immigrants, at least three had proposed limits on coverage (some ending it altogether and others restricting it). For example, on January 1, 2026, Medi-Cal, which is California’s Medicaid program, will freeze any new enrollments for certain undocumented adults who receive state-funded full-scope services. In June 2025, the Minnesota legislature voted to limit eligibility for persons over age 18 who are undocumented. New York has applied to federal regulators seeking to change the authorization for its successful Essential Plan—that provides coverage to some 1.7 million New Yorkers, including certain legally present immigrants—from a revocable federal waiver to the Affordable Care Act (ACA) specified Basic Health Program. Expect to see many other states taking actions to either drop or preserve health insurance coverage in 2026. What impact these changes have on the extent of coverage and the number of newly uninsured people this year remains to be seen.
3. Consolidation in the overall industry Issue Updates. Consolidations in healthcare, both vertical and horizontal, continue. In January 2025, we highlighted mergers, such as the one that created Risant Health. We also examined the continued integration of various companies with United Health Group under Optum Rx (a pharmacy business), Optum Insight (a health analytics company), and Optum Health (care management), as well as the integration of United Health Group and Change Healthcare in early 2024. The consolidation of the insurance industry continued in 2025, with the top 7 companies garnering 75% of the market. The Government Accountability Office also reported on the continued acquisition of physician groups by insurers, hospitals, and private equity firms. Overall, mergers and acquisitions (M&A) transactions among healthcare entities increased steadily from 2021-2024, and, in 2025, healthcare M&A was experiencing its most active M&A cycle in over a decade. Full-year trends were not yet fully assessed by the time of printing this blog, but Pitchbook, which tracks M&A deals across industries, expected that healthcare services M&A levels in 2025 would slightly exceed 2024 levels. This also includes the divestiture of assets from national chains like Ascension and CommonSpirit Health.Policy Responses and Options. At the federal level, shortly after last year’s blog on this trend was published, the federal HHS released a report on how consolidation in the industry continues. For the most part, the Trump administration has kept in place stricter guidelines for reviewing corporate mergers in healthcare, but that hasn’t stopped consolidation from happening. At the state level, we previously highlighted that state policymakers had proposed over 34 bills in 22 states designed to address such consolidations. As this blog was being written, the governor of New York indicated in her State of the State speech that the state planned to expand its monitoring of transactions by healthcare entities that increase revenues by over $25 million. Yet, market forces seem to be allowing such consolidations to continue, and financial and operational strains allow the continuation of mergers and acquisitions that are forcing some systems to divest in hospitals, while regional systems acquire those smaller assets that enable them to expand. Unless states can play a role in propping up financially challenged providers, prevent large insurers from becoming larger, or better regulate nontraditional actors in healthcare, consolidation appears likely to continue in the coming year.
4. Payment, costs, and coverage for pharmaceuticals Issue Updates. By late 2025, it was reported that pharmaceutical companies were expected to raise prices on at least 350 drugs in 2026. That is higher than at the same time last year. Generally, many of the regulatory actions to control prices come from the federal level. Although states may feel somewhat constrained by the Commerce Clause on their ability to regulate pharmaceuticals across state lines, there are still ways for them to address cost issues, such as through rebate programs, limits on Pharmacy Benefit Managers (PBMs), or price negotiations for drugs purchased under the Medicaid program or for state employee benefit programs.Policy Responses and Options. At the federal level, the Trump administration issued an executive order in the spring of 2025 with suggested actions to lower drug prices. The administration also announced agreements to lower the cost of two of the most used drugs in the country, Ozempic and Wegovy. Then, at the end of 2025, the Centers for Medicare and Medicaid Innovation (CMMI) released a proposed model for controlling prescription costs called the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, which is a mandatory model that would assess a rebate for certain drugs under Medicare Part B if the prices exceed those paid in economically comparable countries. It also released the Guarding US Medicare Against Drug Costs (GUARD) Model, which calculates international reference pricing benchmarks and requires manufacturers to pay a rebate if the Medicare net price is greater than the Model benchmark. Congress introduced bipartisan legislation in mid-2025 to lower drug prices by barring drug companies in the US from charging higher prices. State governments were also very active in 2025, passing legislation to lower drug prices, with 31 states passing nearly 70 bills by the end of the third quarter with the goal of lowering prices. I expect to see additional legislation in more states in 2026, including state efforts that mirror some of the federal actions that took place in 2025. As mentioned, such efforts might include building on existing state efforts, such as drug review boards, expanded rebates under Medicaid, and/or reducing administrative costs through third parties, like PBMs.
5. Exponential advancements in life sciences Issue Updates. Although AI has transformed medicine in different ways, in the case of life sciences, AI accelerated advancements especially for genomics, precision medicine, and medical imaging. In particular, as noted by MedEdge, life science based medicine like gene editing and CRISPR were better able to move out of the trial phase and into the treatment phase. AI is also augmenting drug discovery by making it easier to observe the interaction of drugs and understand how they fight disease. Molecular editing, lab-grown 3D bioprinting, mRNA vaccine use for cancer, and robotic surgery are all areas that MedEdge saw continued expansion in 2025. Private funding continued to pour into biotechnology in 2025, as tracked by Fierce Healthcare. The Fierce Healthcare tracker shows that many companies, such as Hemab Therapeutics, Electra Therapeutics, or Tubulis (an antibody drug conjugate), raised well over $100 million in venture capital and related funding in 2025.Policy Responses and Options. In contrast to the growing investments of private funding in life sciences, funding from the federal government specifically for life science research—especially from the NIH—was targeted for cuts in 2025 with disproportionate impacts across states depending on where that research was occurring. According to tracking done by The Sciences & Community Impacts Mapping Project, proposed federal funding cuts showed a potential economic loss of an estimated $16 billion. At the state level, policymakers in the Midwest, California, North Carolina, and a few other states are competing to advance major life sciences projects. The investments include supporting the workforce, developing shovel-ready sites or ones adjacent to major universities, and/or providing expedited permitting. Given the growing advancements and potential of life sciences, in the coming year, I expect to see state policymakers implementing more policy strategies that help grow the life sciences sector in their respective states under both the auspices of life sciences and economic development.
6. An additional trend to watch in 2026Issue Background. Of the trends I noted in 2025, only one (efforts to control the costs of pharmaceuticals) is specifically targeted at addressing the cost and affordability of healthcare. The impact of the actions of state and federal policymakers to improve the affordability of drugs, however, does not seem to be enough yet to curb the overall cost growth in the industry. In fact, of the other trends noted in 2025, some might even be considered cost drivers. For example, mergers and acquisitions and overall consolidation can at times increase costs in some markets, depending on what those mergers include, and for some healthcare consumers who rely on insurance coverage, the loss of the subsidies to pay for healthcare makes that cost increase much more apparent. Although there is some optimism that AI, through process improvement, quicker diagnostics, and disease prevention, could make certain things more efficient, so far, there are mixed results as to whether AI is making healthcare more affordable. With costs for other basic necessities like housing being less affordable, the focus on healthcare affordability is likely to continue in 2026. This is because some consumers will more directly feel the cost of healthcare in 2026, but also because providers have experienced increasing challenges with expenses that contribute to affordability. Examples of areas of expense growth cited by providers include staffing and benefits, supplies, pharmacy, and technology.Industry Responses and Options. Although I previously noted the policy responses of federal and state governments as they relate to these trends, in the case of lowering costs, industry is also responding in new and creative ways. One of the new ways that health systems and providers are attempting to tackle rising prices and costs is through non-traditional partnerships that deliver care, treatments, and services more directly to patients. An example of this is a potential partnership between Humana, an insurance company, and Mark Cuban, co-founder of Cost Plus Drugs. The potential partnership would focus on direct-to-employer programs that cut out companies in the middle, such as PBMs. Another example was the launch of Northwell Direct, a provider system offering direct care to employers without an insurance company. This arrangement is the largest of its kind and recently added a partnership with the influential 32BJ Health Fund, which allows 170,000 participants in the 32BJ Health Fund in the general Northwell service area to have access to the full spectrum of health care services available through Northwell Direct, which is expected to produce significant administrative savings.Policy Responses and Options. One way government policy makers at both the federal and state levels can respond to the affordability crisis is to allow the industry itself to find creative solutions, such as those outlined above. A second way policymakers can respond is by using the authority granted under the ACA for the CMMI to create and experiment with new models of care delivery that could improve care and lower costs. In 2025, CMMI issued at least 6 new payment models, all designed to lower the costs of healthcare. They include some of the ones mentioned above on pharmaceutical cost control, like the GUARD and GLOBE models, but also ones specifically targeting chronic disease, such as the Advancing Chronic Care with Effective Scalable Solutions (ACCESS model), and healthier lifestyles, for example, the Better Approaches to Lifestyle and Nutrition for Comprehensive Health (BALANCE model).

Meanwhile, state governments and officials are proposing various ways to control costs, with over 750 related bills introduced in 2024 alone. Some states are more focused on particular strategies, such as pricing—including hospitals with reference-based pricing. In Indiana, the legislature passed a bill that does not allow hospital systems to exceed prices set before January 1, 2025, for two years. The hospitals would then have to lower prices by a certain percentage each year to reach a goal set by the state’s Office of Management and Budget. For several years now, states have been implementing price transparency policies with the aim of reducing costs. It is, of course, possible that some states will use a combination of these efforts (e.g., promoting industry-initiated efforts through incentives or less regulation to lower costs while also more closely monitoring prices).

Conclusion

The six trends to watch in 2026 noted in this blog are by no means all-encompassing, but they do highlight areas that are likely to garner a lot of attention from policymakers in the near term. As has been true throughout the country’s history, the Federalist system of government allows state and federal governments to develop varied policy approaches to improve how healthcare is funded and delivered. The Rockefeller Institute will be tracking these six trends and will report on any interesting findings, particularly as they relate to the additional trend of the cost and affordability of care in the coming year.

It is a somber year for health care in America. While we commemorate both the 60th anniversary of Medicare and Medicaid and the 15th anniversary of the Affordable Care Act (ACA), we’re watching health-care costs soar to unaffordable levels and millions of Americans lose access to these very programs. Of the many devastating consequences we can anticipate from these policy choices, we should expect to see the crisis of medical debt in America worsen.

But the immediate harms of medical debt, or money owed for past medical care, are solvable problems—and solving them can point us toward bolder solutions to the crisis of unaffordable health care. 

During my time as director of policy in the Office of Cook County Board President Toni Preckwinkle, I and my colleague Nish Dittakavi helped launch the Cook County Medical Debt Relief Initiative using federal funding from the American Rescue Plan Act. This established the first publicly funded program in the United States to buy and cancel residents’ medical debt. In June 2025, President Preckwinkle announced that since its launch in 2022, the program has successfully abolished over $664 million in medical debt so far, benefiting 556,815 residents of Cook County, Illinois.

Cook County’s innovative program also catalyzed a movement across state and local governments.¹ As my colleagues at the New School’s Institute on Race, Power and Political Economy have found, since Cook County announced its program, 29 state and local governments across 19 states have collectively pledged to eliminate $15.8 billion in debt for more than 6.3 million Americans. As of October 25, 2022, these programs have abolished nearly $11 billion in medical debt on behalf of more than 6 million residents.

We have shown that erasing medical debt like this can transform people’s lives. Now, we must leverage the momentum of debt cancellation to meet our current moment. Rather than leaving us satisfied with the short-term aid we can provide through medical debt cancellation, the popularity and success of these programs must push us to ask bigger questions about the upstream interventions we need to fix a broken health-care system that forces people to accrue this debt in the first place.

Our Medical Debt Crisis Is Bad, and Will Likely Get Worse

Amid rising health-care costs and increasingly stretched household budgets, medical debt has become a frequent focus of policy attention in the US. And with good reason: According to a 2021 KFF analysis, 20 million people, or nearly 1 in 12 adults, owe medical debt, totaling more than $220 billion. The Consumer Financial Protection Bureau (CFPB) found that medical debt accounted for 58 percent of debt in collections that same year.²

This economic burden can quickly spiral, as the Roosevelt Institute’s Stephen Nuñez examined in a May issue brief. Patients may be denied medical care due to unpaid bills or struggle to afford other basic needs like food. As emergency physician and historian Dr. Luke Messac details in Your Money or Your Life: Debt Collection in American Medicine, owing medical debt can impact your credit score and thus your ability to access loans, land you in court, result in wage garnishment (withholding earnings to pay off a debt), and even lead to arrest.³

These harms are not felt equally. Given existing disparities across a range of economic and health measures—from wealth and neighborhood segregation to quality of insurance coverage and access to paid family leave—it’s perhaps unsurprising that Black Americans, women, and people with chronic health challenges hold a disproportionate amount of medical debt. This further exacerbates existing health inequities and deepens the racial wealth gap.

Sadly, we should expect these numbers to rise thanks to the Trump administration’s gutting of our public health insurance system. Under the administration’s so-called signature legislative achievement, HR 1, an estimated 12 million people will lose health insurance by 2034, and hospitals and community health centers across the country will face severe threats to their solvency. Even sooner, without congressional action by December an additional 24 million people who purchase ACA plans will simultaneously face steep insurance premium increases and cuts to the tax credits that help subsidize these costs—a key focus of the federal government shutdown this fall.

An estimated 12 million people will lose health insurance by 2034, and hospitals and community health centers across the country will face severe threats to their solvency.

By decreasing eligibility for public insurance and increasing the cost many Americans must pay for non-employer-sponsored private insurance, these policy choices will increase medical debt.⁴

How Myths About Our Health-Care System Perpetuate Medical Debt

Myths that have dominated decades of health policy can trick us into believing medical debt is an unfortunate bug in an otherwise well-designed system.⁵

Many proponents of the current system claim that cost-sharing (when patients pay for a portion of their care through copayments, coinsurance, and deductibles) benefits the system by making patients more responsible and frugal when they seek care. But this myth conveniently ignores the vast body of evidence that shows cost-sharing decreases adherence to treatment, leads to worse health outcomes, and, importantly, does not lead to decreased total costs across the system.

The myth that health care can function like a traditional market, with the burden on us as consumers to just make more informed choices, hides the reality that we are patients whose access to needed care is determined by factors beyond our control—what insurance, if any, our job provides, what that insurance chooses to cover, the cost-sharing that insurance chooses to require, and the covered medicines set by the pharmacy benefit manager (PBM) that insurer works with (and increasingly owns). The myth that our health-care system is a functioning market that can and will course-correct any problems on its own also leaves us looking for solutions from the very stakeholders who benefit from the structure as it is currently.

The myth that our health-care system is a functioning market that can and will course-correct any problems on its own also leaves us looking for solutions from the very stakeholders who benefit from the structure as it is currently.

The reality is that medical debt is the logical outcome of core characteristics of the American health-care system, which include 

• high prices set by hospitals, health-care organizations, pharmaceutical companies, and PBMs; 
• a costly maze created by insurance companies that exclude, deny, and burden people in need; 
• the significant public dollars for health extracted by corporations for their own profits; 
• a system ultimately designed to place the financial burden of care on patients; and 
• decades of policy that has failed to rectify the cruel and unsustainable harms these choices have created.

Medical Debt Is a Symptom of a Broken System, Not a Solution to Its Troubles

In the constrained environment under which so much of our health-care system operates, it might seem that collecting on medical debt is unfortunate but essential to keeping the system afloat. Yet even the most aggressive debt collection practices do not generate substantial revenue for hospitals and health-care organizations, as evidenced by a 2017 study in Virginia that found suing patients and garnishing their wages comprised only 0.1 percent of hospital revenue on average. Dr. Marty Makary, a coauthor of the study and the current commissioner of the Food and Drug Administration under the Trump administration, put the implications bluntly: “The argument that we have to do something this ugly in order to stay afloat is not supported by the data.”

Hospitals and health systems know this too, and recognize that most patients with debt simply cannot afford to pay. Precisely because the prospect of collecting full payment is so low, many choose instead to sell this debt cheaply—for pennies on the dollar—and write it off as a loss on their taxes. The cheapness of this debt is what allows cancellation programs like Cook County’s to achieve the high return on investment that is part of their popularity and success.⁶

This alone should point us to a fundamental question: If we can buy medical debt so cheaply and cancel it so easily, is this debt really necessary in the first place?

Of course, our health-care system needs significant resources to function. But if we are serious about finding sustainable revenue streams to stabilize it, we must acknowledge the needed money will not come from medical debt collection, nor from any other solution that increases the already heavy burden on individuals and maintains the power of the private sector.

President Trump on Thursday unveiled his lower-cost drug platform TrumpRx, touting it as “one of the most transformative health care initiatives of all time.”

“This launch represents the largest reduction in prescription drug prices in history by many, many times,” he added. 

But health policy experts and consumer advocates are skeptical about how many people will benefit, and how significant the deals are. 

The platform features coupons for 43 drugs, ranging from 33 to 93 percent off the list price and treating conditions for obesity, respiratory illnesses, infertility, bladder issues and menopause.

Several observers were quick to note that the advertised prices achievable with the coupons were still higher than the prices one might pay with insurance coverage. 

“If you have insurance, your out-of-pocket costs are probably going to be less than the discounted list price that’s being advertised on TrumpRX,” Juliette Cubanski, deputy director of the Program on Medicare Policy at KFF, told The Hill.  

“For people who are looking at this website and maybe they recognize a drug that they take, they really need to understand how their out-of-pocket cost under insurance would compare to the TrumpRx price.” 

Cubanski noted, however, that some of the medications on TrumpRx aren’t well covered by insurance — such as weight loss and in vitro fertilization drugs, meaning a wider swathe of Americans may find savings on TrumpRx. 

“It’s a valuable effort for some medications, for some people, and I think especially people who don’t have good coverage of some of these medications,” she said. 

Notably, the offerings on TrumpRx are all branded versions of the drugs sold directly by drugmakers who’ve entered “most favored nation” (MFN) pricing agreements with the Trump administration. 

Many of the medications listed on the website have generic alternatives available on the market at significantly lower prices. 

Protonix, a branded medication made by Pfizer that reduces stomach acid, is advertised as having a 55 percent discount on TrumpRx, taking the medication from $447.28 to $200.10 for 30 tablets at a strength of 20 mg. 

But according to GoodRx, its generic equivalent, pantoprazole, can be bought for $10.47 for the same number of tablets at the same dosage with the coupon it offers. Without the coupon, the cost is estimated at just less than $80. 

Another Pfizer product, Tikosyn, for an irregular heartbeat, is shown to have a 50 percent discounted price of $336 for 60 0.125 mg capsules. Generic Tikosyn, dofetilide, is shown to be available for $23.06 on GoodRx with a standard coupon, signifying a 94 percent discount from the $373.96 cost. 

Generics currently make up the majority of prescription medications taken in the U.S., with the Food and Drug Administration estimating in 2023 that 91 percent of prescriptions are filled as generics. 

Anthony Wright, executive director of FamiliesUSA, a nonpartisan consumer health advocacy group, dismissed TrumpRx as a “trumped-up catalog of coupons.” 

“This is not actually lowering drug prices. It steers consumers to the existing drug company programs for uninsured patients that have been around for a while,” said Wright. “This is pretty limited in terms of both who it effects, what drugs it offers and what the benefits are, especially compared to what already existed previously.” 

Ashish Jha, who served as the Biden administration’s White House COVID-19 response coordinator, did not share that skepticism. He called TrumpRx a “good thing” that “is going to be really, really helpful for people who don’t have health insurance” in remarks to The Hill’s sister network NewsNation.

TrumpRx.gov explicitly states that people on government health plans such as Medicaid are ineligible to use the coupons. 

The prohibition on federal health plan enrollees from using TrumpRx coupons likely has to do with the anti-kickback statute in the U.S., which criminalizes willfully offering or exchanging anything of value for reimbursable items through federal programs like Medicaid. 

The Hill has reached out to the Trump administration for clarity on whether all private health insurance enrollees can use TrumpRx coupons. 

But even if this cohort can access the coupons, the scope of TrumpRx appears to be “quite limited in scale,” according to Yunan Ji, assistant professor of strategy at Georgetown’s McDonough School of Business.

“It really only applies to cash-pay patients. So, just considering the scale is cash-pay patients we’re thinking about, you know, a percent of the uninsured, plus some of the people who may be underinsured because their insurance coverage may be limited, but the scope is quite limited at the moment,” she said. 

Roughly 8 percent of the U.S. is uninsured, and with its current offering of just 43 drugs, TrumpRx currently stands to benefit a small subset of that population. Administration officials said more medication would be added in the coming weeks. 

“The thing about MFN in general — so this is interesting, because MFN is something I teach my MBA students — is that actually, in the long run, it actually puts upward pricing pressure,” said Ji.

Trump’s signature drug price policy requires countries to sell drugs in the U.S. at least as cheaply as they are offered in other countries. 

When companies are aware that their clients, like the U.S., are expecting MFN pricing, they may set their initial launch prices of new drugs at an elevated level, Ji said. Another outcome of MFN pricing could be that drug launches in other countries with strict pricing regulations will be delayed.

Trump acknowledged the global impact that his MFN pricing policy could have on other countries when announcing the launch of TrumpRx. 

“Drug prices in other nations will go up by doing this, they had to agree,” he said. “In many cases, the drug costs will go up by double and even triple for them, but they’re going way down for the United States.” 

As early as today, the House of Representatives is expected to vote on a government funding package (approved by the U.S. Senate last Friday) that includes long-sought reforms to pharmacy benefit managers (PBM) – pharmaceutical middlemen, the biggest of which are owned by just three health insurance conglomerates – that sit between patients and their prescriptions.

None of this happened over night. PBM reform – even in the health care advocacy world – has only recently become a bi-partisan, winning issue. PBMs were largely only known to pharmacists, other middlemen, health-policy wonks and the small but mighty circle of advocates who understood how they squeeze patients and independent pharmacies and funnel profits back to Big Insurance. PBMs began life as intermediaries meant to negotiate lower drug prices on behalf of consumers, but over time their role changed as they huge profit centers for insurers like UnitedHealth, Cigna and Aetna merged with or created their own PBMs – which now control more than 80% of the PBM business in the country.

This monopolistic-evolution captured the attention of policymakers and watchdogs after HEALTH CARE un-covered and reform advocates began to raise the alarm about PBM abuses and profiteering.

The need for PBM reform was one of the reasons I started the Lower Out-of-Pockets (LOOP NOW) Coalition, in 2021. Over the years, the LOOP NOW Coalition, along with its 100 partner organizations, have worked to educate lawmakers about how PBMs restrict access to life-saving medications and contribute to the U.S. medical debt crisis. The coalition has endorsed legislation to ban several PBM business practices, like spread pricing, and to force PBMs to be far more transparent, especially in their dealings with employers that offer health benefits to their workers. Our work also led to an invitation for me to testify at a meeting of the Department of Labor’s Advisory Council on Employee Welfare and Pension Benefit Plans (the ERISA Advisory Council) and to meet with the Federal Trade Commission regarding the vertical integration of big insurers and the need for PBM (and Medicare Advantage) reform.

Through the work of advocates on the ground, things began to shift. What was once a side quest among health-policy activists became something real in Washington because the issue is easy to understand: PBMs have become unneeded profit centers insurers erected between patients and the medicines their doctors say they need.

We came close to reining in the PBM industry in late 2024 when reforms were included in House Speaker Mike Johnson’s first spending package, but they were scrapped after Elon Musk complained about the size and scope of the legislation.. His Tweets prompted GOP leadership to strip out the PBM provisions, even though they had broad bipartisan support in Congress and were backed by many consumer advocates and independent pharmacists. But now, it seems like the PBM language in the current spending package is more locked in. Here’s what the bill will do:

• Change how PBMs get paid in Medicare Part D by moving them away from percentage-based payments tied to high drug list prices and toward flat, transparent service fees — so PBMs no longer profit more when drug prices are higher.
• Require CMS to define and enforce contract terms between PBMs and Medicare Part D plans, giving the agency real authority to police abusive or one-sided arrangements.
• Increase transparency by allowing CMS to track how PBMs pay pharmacies and which pharmacies are included (or excluded) from PBM networks, so regulators can finally see payment patterns and network practices across the system.
• Lock into law existing protections requiring plan sponsors and PBMs to contract with any pharmacy that agrees to their standard terms — as long as those terms are reasonable and relevant — instead of quietly steering business to preferred or affiliated pharmacies.

These are important reforms, although more are needed. We’ll keep you posted on PBM-related efforts not only on Capitol Hill but also at the Department of Labor and in the states.

And the questions I’d ask UnitedHealth Group’s CEO about his company’s ACA pledge.

When I first saw the headline that UnitedHealth Group would “return Obamacare profits to customers in 2026,” my immediate reaction was: Oh good grief.

The timing is just too perfect.

UnitedHealth’s pledge was tucked neatly into prepared testimony from CEO Stephen Hemsley, just hours before he (and four other Big Insurance CEOs) are to be hauled into Congress to testify before two House hearings on health care affordability.

Today, the CEOs will be asked to explain why Americans are paying through the nose for coverage and still getting denied care, trapped in narrow networks and buried under medical debt. As of late, Republican lawmakers — and President Trump himself — have discovered religion on the issue, publicly fuming about high premiums and insurer abuses.

If you’re feeling a little misty-eyed about this sudden burst of corporate altruism, let me save you the trouble. This isn’t a moral awakening. It’s a PR maneuver and narrative control being implemented in real time.

Hail Mary

It’s the corporate version of a quarterback, down by four points, seconds left on the clock, closing his eyes and launching the ball fifty yards downfield, hoping something — anything — miraculous happens before the time runs out. UnitedHealth’s pledge is just a long, desperate PR pass into the end zone, praying lawmakers and reporters will focus on the gesture instead of the business model that allows them to gobble up those dollars in the first place.

It’s worth noting that UnitedHealthcare, while the largest insurer in the country with 50 million health plan enrollees, is actually a relatively small player in the ACA marketplace — about 1 million customers in 2026, compared with roughly 6 million for Centene, according to Politico. This is not UnitedHealth sacrificing a part of its core profit engine. (It doesn’t even disclose how much it makes on its ACA business, but I can assure you it’s a very small part of the more than $30 billion in annual profits it’s been making in recent years.) This is a carefully calibrated concession of a slice of this conglomerate’s business that won’t jeopardize its Wall Street standing, which is what Hemsley cares about most.

As I wrote yesterday, I spent years inside the insurance industry, helping executives shape their public image and get ahead of bad headlines. I know this playbook by heart. When scrutiny spikes, you roll out a “good guy” story. You announce a consumer-friendly initiative and you flood the zone with talking points. You give lawmakers anything they can point to as evidence of “progress,” so the temperature in the room drops just a few degrees. It’s all an optics game, and if I was in my old job I’d probably get a bonus for thinking of a stunt like this.

Reputational damage control

When Hemsley and his Big Insurance buddies sit before Congress, don’t be surprised if he pivots quickly from this show of supposed humility to pointing fingers at everyone else for driving up costs – including hospitals, doctors, drug companies and whoever else. How do I know this? Hemsley said as much in his prepared testimony. His fellow CEOs sang from the exact same hymnbook, written by the best flacks money can buy.

So no, I’m not impressed by UnitedHealth Group’s gesture. And neither should lawmakers.

If UnitedHealth and its peers were serious about affordability, they wouldn’t be waiting until the night before a congressional grilling to dangle a symbolic rebate. They would be opening their books and explaining their pricing algorithms. They’d come clean about how much of our premium dollar goes to care and how much goes to executive compensation, stock buybacks and acquisitions that tighten their grip on the health care system.

This isn’t a gift. It’s a distraction.

And like most Hail Marys, it doesn’t work if you’re already down a whole lot of points. I hope the lawmakers at today’s hearing remember the score.

In light of UnitedHealth Group’s latest move, see below for some questions that I would ask Hemsley if I were in Congress:

• ACA plan and pledge specifics
  • How many people are enrolled in your ACA marketplace plans, and how much total profit are you committing to rebate to them?
  • What were your profits from ACA marketplace plans in recent years?
  • Will you commit to disclosing ACA-specific enrollment and profit figures when you announce 2025 earnings next Tuesday? And how many people dropped coverage after the enhanced ACA subsidies were not renewed?
  • By how much, on average, did you raise ACA premiums because Congress did not renew those subsidies?
• Public money vs. private plans
  • Between 2020–2024, your filings show about $140 billion in operating profits and roughly $894 billion in revenue from Medicare and Medicaid versus $321 billion from commercial plans. Do you agree that about 74% of your revenue now comes from taxpayers and seniors?
  • Given that you have about twice as many people in commercial plans as in Medicare/Medicaid, do you agree the government is paying you far more per enrollee than private customers are?
• Accountability going forward
  • Will you commit to disclosing ACA-specific enrollment and profit figures when you announce 2025 earnings next Tuesday?
  • Will you commit not to raise premiums or fees in your other lines of business to offset the ACA rebates?
  • Will you commit to providing the transparency and granularity needed for the public to verify that this rebate pledge is real and not a PR maneuver?