Key findings:

  • Trump, Project 2025, and the Republican Study Committee all have this in common: They want to increase out-of-pocket health care costs for working American families.
  • When he was president, Trump tried to repeal the Affordable Care Act (ACA). When that didn’t work, he did everything he could to weaken the ACA by:
    • Cutting cost-reduction subsidies
    • Repealing the ACA’s individual mandate
    • Weakening consumer protections in health insurance plans
  • In attacking the ACA, many Republicans falsely claimed that it had raised out-of-pocket costs for health care. The truth is that in recent years, the ACA saved U.S. families at least $33 billion.
  • The Biden-Harris administration reversed some of damage caused by Trump’s assault on the ACA and bolstered Medicare and Medicaid by:
    • Increasing available health care subsidies through the Inflation Reduction Act
    • Enhancing financial incentives to state governments to accept the Medicaid expansions of the ACA
    • Introducing negotiating over the cost of drugs in the Medicare program
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U.S. politics have recently become so chaotic and personality-driven that it’s easy to forget the long-running and high-stakes differences in how conservatives and progressives approach key policy debates. One of the starkest differences is their approach to health care.

The conservative prescription for health care is increasing health care users’ “skin in the game”—forcing patients to bear more of the cost of each new medical treatment they undertake. The argument is that most Americans consume too much health care because they are overinsured, and this overconsumption is what drives excess costs in the health care system.

The progressive view is that high prices, not high utilization, are the root of why Americans spend so much on health care compared with every other rich country in the world. Progressives further argue that the distortions in health care markets (including distortions caused by excess market power of many providers like drug companies and hospital chains) make strategies that introduce more skin in the game futile. Making patients pay more each time they go to the doctor will convince them to go to the doctor less, but patients will have no basis on which to decide what kind of care they should cut back on. This will lead them to cutting out some wasteful care, but also a lot of medically necessary care that might even be cost-reducing in the long run. In short, the progressive prescription for health care is to make it more affordable, not more expensive, for patients to get the medical care they need.

Conservatives’ view that patients need to pay more for obtaining health care and progressives’ view that they need to pay less can be seen clearly in their policy track records.

Trump, Project 2025, and the Republican Study Committee budget all call for patients paying more

Our description of the conservative health care outlook is not a caricature. Project 2025 calls for a tax on employer-provided benefits, aiming to force employers to shift compensation away from health insurance and leading to “thinner” health insurance plans that shift costs onto patients. The Republican Study Committee (RSC) budget proposes a direct tax on employer-sponsored health insurance plans that leads to the same result, also with the goal of forcing workers into thinner insurance plans. These tax penalties for employer-provided insurance aim directly at increasing patients’ skin in the game. This approach has a long conservative pedigree; tax incentives to nudge employers into offering high-deductible health plans that shift costs onto patients, for example, was the centerpiece of health policy under the George W. Bush administration.

Though some might argue that Donald Trump’s unorthodox policy stances mean he would not follow this traditional conservative path, his track record proves otherwise. Numerous health policy decisions and proposals made during the Trump presidential administration came straight from the playbook aiming to force patients into accepting higher out-of-pocket (OOP) costs every time they obtain health care.

Most importantly, Trump pushed hard to repeal the Affordable Care Act (ACA) and replace it with an alternative (the American Health Care Act) that would’ve significantly raised OOP and premium costs for U.S. families. In the end, this Republican effort failed by just one vote in the Senate. While candidate Trump has been less vocal about repealing the ACA in his current campaign, we should remember that he tried before and a key Republican policy document—the Republican Study Committee (RSC) budget—calls for mammoth cuts in the ACA. 

But the ACA repeal attempt was not the only way the Trump administration pursued the kinds of cost-shifting strategies called for today by Project 2025 and the RSC budget. When Trump was president in 2017, for example, he made an executive decision to discontinue the cost-sharing reduction subsidies (CSRs) that were part of the Affordable Care Act. CSRs helped lower-income households who obtained health insurance through the ACA exchanges pay for their deductibles and co-pays. Trump’s policy to end CSRs focused directly on raising OOP costs faced by patients. In the end, other parts of the ACA proved flexible enough (and protected enough from unilateral executive action) that these families were generally held relatively harmless in the face of these CSR cuts, but it was not for lack of trying on the part of the Trump administration.

Also in 2017, then-President Trump signed the Tax Cuts and Jobs Act (TCJA) into law, which effectively repealed the individual mandate which was part of the ACA. The individual mandate was a policy instrument aimed at stopping free riders who would go without health coverage until they became sick, at which point they could claim subsidized (and guaranteed) coverage under the ACA. This would in turn raise premium prices for everybody else who wanted to maintain continuous insurance coverage. Conservatives did away with the individual mandate precisely because it was an effective measure for keeping premium costs manageable within the ACA.

Additionally, the Trump administration pushed regulations that weakened minimum benefit requirements and other consumer protections in health insurance plans for both the individual and the employer-based markets. The aim of these changes again was to push more health care enrollees into thinner health plans that covered a smaller share of total health care costs. The Trump administration’s own analysis of these rules showed that they would lead to premium increases in individual and small-group markets, as well as to reductions in the protectiveness of health insurance plans sold in the new plans made possible by the rule.

How the ACA lowered health care costs for U.S. families

The most important way that the ACA lowered health costs for U.S. families was by directly subsidizing the cost of buying insurance. There are currently 35 million people covered by either the marketplace exchange plans provided by the ACA (22 million people—with 20 million receiving subsidies) or Medicaid expansions (13 million people). It’s worth remembering that when the ACA was first implemented in 2014, 22 states refused the Medicaid expansion, denying coverage to millions of their residents despite its near-zero cost to the state governments initially (and extremely low-costs in perpetuity). As of 2024, only 10 states are still holding out. By 2024, the cost of these ACA coverage expansions (both the subsidies to exchange plans and the Medicaid expansions) totaled roughly $250 billion—money that families could spend on other needs while remaining covered by health insurance.

During their 2017 effort to repeal the ACA, many Republicans tried to claim that the ACA had somehow raised out-of-pocket costs for U.S. families. This was obviously false. Take one example: In 2010 (the year the ACA passed), 11.6% of all health care costs in the U.S. had to be paid OOP by patients (think co-pays, deductibles, and co-insurance). But in the latest year of data available (2022), this share fell to 10.3%. The difference is huge: If U.S. families in 2022 had to pay 11.6% of their total health care costs out-of-pocket, this would have cost them an additional $50 billion.

The biggest ways that ACA reduced OOP costs are described below. (Details on how rough estimates of these OOP cost reductions are calculated are available upon request).

  • New regulations in the individual market for health insurance required insurers to offer more protective insurance plans to all who wanted it. Refusing coverage outright based on pre-existing conditions or engaging in large degrees of price discrimination to avoid sick patients was no longer allowed. In essence, these regulations in the individual market for health insurance banned “junk insurance” that collected premiums from patients but only covered small shares of their overall health care costs. This regulation alone reduces OOP costs for patients in the ACA exchanges by roughly 5% of total costs (i.e., it increases the “actuarial value” of their insurance plans by five percentage points), totaling roughly $6 billion in lower OOP costs.
  • On top of this, the ACA introduced cost-sharing reduction subsidies (CSRs). While the Trump administration rolled these back completely, the ACA was flexible enough (and protected enough from unilateral executive action) that these CSRs were able to be bundled into insurance plans and other ACA subsidies could continue to reduce OOP costs for patients. The new CSRs worked by further increasing the actuarial value of exchange plans for people with incomes below 250% of the federal poverty level, a change that lowered out-of-pocket costs by roughly $17 billion relative to pre-ACA markets.
  • Moving people from non-insurance into Medicaid made health care more available but also significantly reduced OOP costs (as Medicaid has extremely low OOP costs), by roughly $10 billion.
  • For employer-provided plans, the ACA eliminated benefit caps, both annually and over a lifetime. Before the ACA, insurers could cap the benefits they provided patients in a given year or even over a lifetime. This was potentially ruinous financially for chronically ill patients or those with pre-existing conditions.
    • In the years before the ACA, more than 20% of those covered by employer-sponsored insurance faced annual benefit caps. By 2016 these caps were in only 2% of plans.

Even without being able to pin a number on how much the abolition of benefit caps on employer-sponsored insurance has reduced OOP costs for U.S. families, the savings these policies provided are enormous, summing to roughly $33 billion in recent years. Again, this $33 billion is savings over and above the savings provided by either subsidizing premium payments in the ACA exchanges or providing insurance directly in Medicaid.

How the Biden-Harris administration strengthened the ACA, Medicaid, and Medicare

When the ACA was implemented in 2014, it represented a big step forward in providing better and fairer access to health care for working families. The Trump administration’s hostility towards the ACA stalled further progress on increasing working families’ health security until the Biden-Harris administration.

Under the Biden-Harris administration, key improvements have been made to the ACA. The Inflation Reduction Act (IRA) significantly expanded the subsidies available to purchase plans from the exchanges. In 2024, 80% of enrollees in these exchanges paid less than $10 per month to obtain their health insurance. This enhanced affordability led directly to the highest enrollment in ACA exchanges in history, and also led directly to the lowest non-insurance rates on record in the U.S. in 2023.

The Biden-Harris administration also passed substantial improvements to both Medicaid and Medicare. On Medicaid, the American Rescue Plan (ARP) provided enhanced financial incentives to state governments to accept the Medicaid expansions of the ACA. While these expansions would have always benefited these states enormously, the terms of the expansion were particularly good in the early years of the ACA, when essentially 100% of the costs would have been covered by the federal government. But the ARP gave states that had originally decided not to accept the Medicaid expansion a do-over by offering extraordinarily generous terms once again for providing coverage to their state’s residents. This is particularly important for rural hospitals in these states. Medicaid expansion was crucial for rural hospitals in the 2010s, and these hospitals in non-expansion states suffered greatly relative to other states. The pandemic aid to the health care sector from 2020–2023 provided a financial bridge to rural hospitals in non-expansion states, but this aid is now depleted and rural hospitals will see huge financial distress if their state governments continue to stubbornly reject the Medicaid expansion.

The Inflation Reduction Act (IRA) finally introduced bargaining over the cost of drugs in the Medicare Part D program. The original Medicare Part D legislation—signed into law by George W. Bush— expressly barred Medicare from bargaining with drug companies. By law, the federal government was forced to accept whatever price-gouging the drug companies decided to inflict on them. After years of debate, the Biden-Harris administration finally introduced some serious bargaining in this program. This bargaining will save the federal government roughly $25 billion per year over the next decade, without cutting benefits to Medicare recipients. These provisions could certainly go further, but they are an excellent start and show clearly that the Biden-Harris administration sees health care cost control as something that should be accomplished by reining in excess market power of health care providers—and not by simply making it harder for patients to get medical care when they need it.

A second Trump presidency would mean higher costs and less health care security for U.S. families

The noise and vitriol of the last three presidential campaigns has often obscured important long-running differences in policy outlook, and heath care policy is no exception. This may well be a conscious strategy on the part of the Trump campaigns—conservative policy prescriptions for health reform look to shift risks and costs onto patients and family budgets, while progressive prescriptions look to lower these costs. If given a straight-up choice between these approaches, it seems clear which a Trump administration would choose.

Published by Josh Bivens

Chief Economist, EPI Action