By Patrick Aguilar
In announcing its “Great Healthcare Plan” in January 2026, the Trump administration became the latest in a long history of efforts by the U.S. government to rein in the soaring cost of health care.
As a physician and professor studying the intersection of business and health, I know that the challenges in reforming the sprawling U.S. health care system are immense. That’s partly for political and even philosophical reasons.
But it also reflects a complex system fraught with competing interests – and the fact that patients, hospitals, health insurance companies and drug manufacturers change their behaviors in conflicting ways when faced with new rules.
Soaring costs
U.S. health care is the most expensive in the world, and according to a poll published in late January 2026, two-thirds of Americans are very worried about their ability to pay for it – whether it’s their medications, a doctor’s visit, health insurance or an unpredictably costly medical emergency.
Disputes over health policy even played a central role in the federal government shutdown in fall 2025.
Trump’s health care framework outlines no specific policy actions, but it does establish priorities to address a number of longtime concerns, including prescription drug costs, price transparency, lowering insurance premiums and making health insurance companies generally more accountable.
Why have these challenges been so difficult to address?
Drug price sticker shock
Prescription drug costs in the U.S. began rising sharply in the 1980s, when drugmakers increased the development of innovative new treatments for common diseases. But efforts to combat this trend have resembled a game of whack-a-mole because the factors driving it are so intertwined.
One issue is the unique set of challenges that define drug development. As with any consumer good, manufacturers price prescription drugs to cover costs and earn profits. Drug manufacturing, however, involves an expensive and time-consuming development process with a high risk of failure.
Patent protection is another issue. Drug patents last 20 years, but completing costly trials necessary for regulatory approval takes up much of that period, reducing the time when manufacturers have exclusive rights to sell the drug. After a patent expires, generic versions can be made and sold for significantly less, lowering the profits for the original manufacturer. Though some data challenges this claim, the pharmaceutical industry contends that high prices while drugs are under patent help companies recover their investment, which then funds the discovery of new drugs. And they often find ways to extend their patents, which keeps prices elevated for longer.
Then there are the intermediaries. Once a drug is on the market, prices are typically set through negotiations with administrators called pharmacy benefit managers, who negotiate discounts and rebates on prescription drugs for health insurers and employers offering benefits to their workers. Pharmacy benefit managers are paid based on those discounts, so they do not have an incentive to lower total drug prices, though new transparency rules enacted Feb. 3 aim to change payment practices. Drugmakers often raise the list price of drugs to make up for the markdowns that pharmacy benefit managers negotiate – and possibly even more than that.
In many countries, centralized government negotiators set the price for prescription drugs, resulting in lower drug prices. This has prompted American officials to consider using those prices as a reference for setting drug prices here. In its blueprint, the Trump administration has called for a “most-favored nation” drug pricing policy, under which some U.S. drug prices would match the lowest prices paid in other countries.
This may work in the short term, but manufacturers say it could also curtail investment in innovative new drugs. And some industry experts worry that it may push manufacturers to raise international prices.
In late 2025, 16 pharmaceutical companies agreed to most-favored nation pricing for some drugs. Consumers can now buy them directly from manufacturers through TrumpRx, a portal that points consumers to drug manufacturers and provides coupons for purchasing more than 40 widely used brand-name drugs at a discount, which launched Feb. 5. However, many drugs available through the platform can be purchased at lower prices as generics
Increasing price transparency
Fewer than 1 in 20 Americans know how much health care services will cost before they receive them. One fix for this seems obvious: Make providers list their prices up front. That way, consumers could compare prices and choose the most cost-effective options for their care.
Spurred by bipartisan support in Congress, the government has embraced price transparency for health care services over the past decade. In February 2025, the Trump administration announced stricter enforcement for hospitals, which must now post actual prices, rather than estimates, for common medical procedures. Data is mixed on whether the approach is working as planned, however. Hospitals have reduced prices for people paying out of pocket, but not for those paying with insurance, according to a 2025 study.
For one thing, when regulations change, companies make strategic decisions to achieve their financial goals and meet the new rules – sometimes yielding unintended consequences. One study found, for example, that price transparency regulations in a series of clinics led to an increase in physician charges to insurance companies because some providers who had been charging less raised their prices to match more expensive competitors.
Additionally, a 2024 federal government study found that 46% of hospitals were not compliant. The American Hospital Association, a trade group, suggested price transparency imposes a high administrative burden on hospitals while providing confusing information to patients, whose costs may vary depending on unique aspects of their conditions. And the fine for noncompliance, US$300 per day, may be insufficient to offset the cost of disclosing this information, according to some health policy experts.
Beyond high costs, patients also worry that insurers won’t actually cover the care they receive. Cigna is currently fighting a lawsuit accusing its doctors of denying claims almost instantly – within an average of 1.2 seconds – but concerns about claims denial are rampant across the industry. Companies’ use of artificial intelligence to deny claims is compounding the problem.
FS Productions/Tetra Images via Getty Images
Curbing the rise in health insurance premiums
Many Americans struggle to afford monthly insurance premiums. But curbing that increase significantly may be impossible without reining in overall health care costs and, paradoxically, keeping more people insured.
Insurance works by pooling money paid by members of an insurance plan. That money covers all members’ health care costs, with some using more than they contribute and others less. Premium prices therefore depend on how many people are in the plan, as well as the services insurance will cover and the services people actually use. Because health care costs are rising overall, commercial insurance companies may not be able to significantly lower premiums without reducing their ability to cover costs and absorb risk.
Nearly two-thirds of Americans under age 65 receive health insurance through employers. Another 6.9% of them get it through Affordable Care Act marketplaces, where enrollment numbers are extremely sensitive to premium costs.
Enrollment in ACA plans nearly doubled in 2021, from about 12 million to more than 24 million, when the government introduced subsidies to reduce premiums during the COVID-19 pandemic. But when the subsidies expired on Jan. 1, 2026, about 1.4 million dropped coverage, and for most who didn’t, premiums more than doubled. The Congressional Budget Office projects that another 3.7 million will become uninsured in 2027, reversing some of the huge gains made since the ACA was passed in 2010.
When health insurance costs rise, healthier people may risk going without. Those who remain insured tend to need more health services, requiring those more costly services to be covered by a smaller pool of people and raising premium prices even higher.
The Trump administration has proposed routing the money spent on subsidies directly to eligible Americans to help them purchase health insurance. How much people would receive is unclear, but amounts in previous proposals wouldn’t cover what the subsidies provided.
To sum it up, health care is extremely complicated and there are numerous barriers to reforms, as successive U.S. administrations have learned over the years. Whether the Trump administration finds some success will depend on how well the policies are able to surmount these and other obstacles.
Patrick Aguilar is Managing Director of Health at Washington University in St. Louis.
JimboXYZ says
Pretty much because fraud & abuse is a rampant issue in the Healthcare industry.
PaulT says
Fraud Jimbo XYZ,? Maybe you need to clarify that comment and point out the fraud is theft by the health industry, who are defrauding each and every patient who uses their services.
The US has a for profit medical system which in many cases exploits patients.
The health insurance industry cares more about shareholders than patients and is structured to refuse services rather than support those needing treatment.
The drug industry is a rip off and because their lobbying is so effective and munificent Congress refuses to consider price protection. As a result prescription drugs in this country are the most expensive in the world.
Meanwhile the drug manufacturers manipulate the market by restricting output while the government resricts imports of affordable generics..
Trump’s much publicized ‘cheaper drugs’ program is a great idea but only covers a tiny handful of drugs.
It’s odd that Americans are so tax averse that they reject the idea of a ‘Medicare For All’ type of system but accept outrageously priced medical bills. And don’t give me the ‘oh but the longwait times’ answer, have you tried to make a specialist appointment lately?
Ray W. says
Yes, the healthcare industry has many individual bad actors that exploit federal programs for profit. Your point is valid and I applaud your choice to blame certain medical bad actors, but not all medical actors. Thank you.
While in law school, I internalized an idea that any positive legislative or business model or scheme that is devised by the mind of mankind can also be negatively exploited by the mind of mankind.
The AP reports that last week both the Center for Medicare Services and the Center for Medicaid Services sent demand notices to Florida officials for them to provide to the federal agencies documentation explaining what efforts Florida officials intended to take to stop “bad actors” in Florida from defrauding Medicare and Medicaid. Contained in the demand notices was the assertion that Florida “has been a hot spot for healthcare fraud for years.”
Make of this what you will.
Me?
I have argued in the recent past that defrauding government healthcare programs is a long-term national problem that knows no political or territorial or ethnic boundaries; it is everywhere and harms us all. But I have also argued that when I was a prosecutor, I prosecuted people for the crimes they committed, not for the crimes others committed. If a Florida doctor is found to have defrauded Medicare or Medicaid, prosecute the doctor for what he or she did, but don’t blame all doctors for the actions of the one.
This is what is wrong with those among us who claim that all Minnesota Somalis are defrauding federal healthcare programs. Blame the white Minnesota woman for organizing the scheme to defraud, as she has already been convicted for her role in organizing the scheme to defraud. She was the one who recruited the 85 Somalis and 12 other Americans who also have been convicted for participating in her fraud. Don’t falsely accuse the 70,000 or so other Somalis who live in Minnesota. Anyone who blames an entire Somali immigrant populace for the organizing actions of a non-Somali American criminal actor that dragged in accomplices, immigrant and native-born, is displaying much about his or her own character flaws.
JW says
Having worked all my life in the healthcare (drug) industry in a number of countries and traveled all over the world, the answer is very simple: Americans don’t like REGULATION and Americans are poorly educated (K-12) about global history, including economics and civics. All of that is very political. Lobbyist and lawyers are very obstructive and don’t want change. It is all about money and misleading people and patients (just watch the healthcare advertising on TV, mostly forbidden in other countries). Other developed countries have much more affordable care for ALL and have better OUTCOMES.
This is all documented but nobody cares to read about it. TrumpRx is not the solution. I am sure he benefits from it too and he always says: I alone can fix it.
It has also a lot to do with a well functioning democratic system and it is illustrative that America’s ranking as a democracy in today’s world continues to drop (and I am sure a lot more this year), 1925 RSF ranking 57 , certainly not deserving to brag about us the greatest nation on earth. That applies maybe to the military-industrial complex but even that raises some questions these days in terms of OUTCOMES.
Al says
One way to get more healthy people on insurance is not to charge them for the irresponsible behavior of others. Alcoholics, smokers, illegal drug user should pay more. It works in car insurance where poor driving records have higher premiums and also in home insurance where people in fire districts, flood plains, or hurricane exposure pay extra.
Skibum says
Driving is a privilege, and one that can be taken away from those who abuse that privilege by committing traffic or other related criminal offenses. You have to meet age requirements, you have to pass driver knowledge and rules of the road tests, an actual driver’s test with an examiner for first time drivers, an eye test to make sure you can see properly, and you must possess a driver’s license and car insurance.
Just what correlation, Al, is any of that to having healthcare insurance? I’ll answer that for you since you apparently are confused… the answer is NOTHING whatsoever in your comparison is legitimate or worthy of discussion. Your comment might as well compare yogurt to screwdrivers, for all it is worth.
Every human being, from the time of birth to their last breath will have a need for some type of healthcare coverage, either paid for by themselves or by being a dependent on someone else’s plan. The fact that there are so many Americans without healthcare insurance or who are under insured because of the cost, which, by the way, drives up the cost of medical treatment for all the rest of us, should inform anyone with a brain that there is a huge problem here in the U.S.
Too many health insurance providers are like the CarShield aftermarket scheme that has been investigated and sanctioned by the Federal Trade Commission and outright banned in some states for deceptive practices after having been ordered to refund millions of dollars to those dumb enough to enroll in their “insurance” scheme.
Those healthcare insurers I am referring to, especially some of the Medicare “Advantage” plans which are certainly NOT an advantage to many people who don’t know any better, take money from their clients willingly, then when a claim is made to pay for prescriptions, specialists or expensive surgeries that the client needs, the bean counters within those companies do everything they can to DENY coverage all while reaping in humongous profits for those insurance conglomerates.
Your idea seems to want to codify that health insurance is an optional luxury for people, when in fact it is quite the opposite, and any such ridiculous idea would make our nation even more unhealthier and at the same time increase the profit margin for the type of healthcare insurers exponentially if all they could insure were those who were healthy! What a brain dead concept!
Congratulations for completely failing Healthcare 101.
A republic if you can keep it says
We are currently looking at a request for another $200,000,000,000 for weapons while our healthcare is in shambles. This after Congress approved the largest increase in history for the Department of Defense. Where do you think that money will come from?
Other than Randy Fine,(R) FL 06 in our area as well as those other politicians that have been bought by special interests , anyone that cares about fellow citizens will not support this.
Skibum says
One of the most significant facts in the article above pertaining to healthcare insurance is: “Insurance works by pooling money paid by members of an insurance plan. That money covers all members’ health care costs, with some using more than they contribute and others less. Premium prices therefore depend on how many people are in the plan, as well as the services insurance will cover and the services people actually use.”
Obviously, the more people who are enrolled in a medical plan, the lower the cost to provide healthcare services. Many healthcare plans in this country are expensive for enrollees compared to say, those that cover state government or federal government employees specifically because those other plans do not have nearly as many people covered to be able to bring the cost down to what is comparable to government employee coverages.
What a great segway to talk about UNIVERSAL HEALTHCARE! Yes, the republi-cons are and have been dead set against it for eons. Why? Just look at how much $$$ huge traditional healthcare corporations allot to their lobbyists, and how much those corporations donate to conservative’s election campaigns, all in a concerted effort to retain the traditional healthcare system in the country which guarantees BILLIONS and BILLIONS in profits for those conglomerates. Healthcare is money in the bank to them! That is why they must continue to DENY services to plan enrollees. Simple math equates medical denials to increased profits.
If the U.S. ever has enough momentum, including votes in Congress and a president willing to sign Universal Healthcare into law, the cost of healthcare for average citizens will be substantially lower due to the huge pool of enrollees. None of the countries who have this system are going broke! But those healthcare corporations we currently have, those who pay their CEOs and top executives millions or billions of dollars along with their “golden parachutes” of multi-million dollar retirements, will cease to exist, and that is exactly why they are so dead set against such a change to this nation’s healthcare system.
Just like most everything else, it all comes down to MONEY. The insurance companies don’t want to lose theirs.
Ray W. says
The Soufan Center, a national security think tank, advises that Iranian hackers successfully penetrated the network of Stryker, a medical devices company that services some of the needs of 150 million patients each year; it is a Fortune 500 company. Numerous hospitals had to go offline to protect their networks. Vital patient medical data transmission ceased for a time.
In Soufan’s estimation, it was not a cyber-security failure by Styker. Instead, it was a successful targeting of the workings of a particular company by an Iranian group bent on revenge for the bomb strike on the girl’s school, suggesting that few companies are completely safe if a sophisticated enemy directly seeks entry and disruption.
Make of this what you will.
Me?
It wasn’t that long ago when a major southeastern U.S. gasoline pipeline shut down due to a ransomware hack. Electricity grids are particularly exposed to damage from hacking. Individual power plants commonly operate on software completely isolated from any internet connection. From what I understand from a number of years ago, NASA at that time intentionally used pre-Pentium computers, operating on purpose-written bare-bones software that simply cannot be hacked because the ancient code has never been linked to any external network, or so the logic went.
Dennis C Rathsam says
Ya,LL need to call your savior…..OBAMA!