Trump Healthcare Plan: Key Proposals for Coverage and Costs

President Trump’s healthcare policies reflect an effort to reshape U.S. healthcare by restructuring Medicaid, paring back subsidy programs and promoting market reforms to lower costs. Many provisions in the One Big Beautiful Bill Act (OBBBA) aim to transfer more responsibility to states, reverse certain Affordable Care Act (ACA) mandates and introduce new cost controls, especially in prescription drug pricing. However, critics point to estimates that millions could lose coverage or face higher premiums under these changes. 

A financial advisor can help you anticipate potential impacts on health costs, and align coverage decisions with broader retirement or tax strategies.

Proposed Coverage Changes

Under Trump’s proposed healthcare framework, there are likely to be several major modifications to coverage rules and structure. Here’s what to expect in terms of coverage for the Affordable Care Act, Medicaid and Medicare.

Affordable Care Act

The OBBBA adds new verification steps for people who get premium tax credits to help pay for health insurance. This means that before signing up, they’ll need to prove they qualify, and automatic re-enrollment will no longer happen for these individuals. However, the law doesn’t extend the extra tax credits that are set to expire at the end of 2025. ¹

The OBBBA also shortens open enrollment for ACA plans from the previous 10 weeks to six weeks, running from Nov. 1 through Dec. 15. However, some state exchanges may offer extended enrollment periods. ²

Medicaid

The OBBBA adds new rules for people applying for or keeping Medicaid coverage. These include new conditions, such as work requirements. Starting in 2027, the law requires states to make Medicaid expansion enrollees work at least 80 hours per month by Jan. 1, 2027. ³

Starting in 2027, the law also limits Medicaid retroactive coverage to just one month, as opposed to the 90 days previously. ⁴

Medicare

Eligibility for certain Medicare programs will be limited to U.S. citizens, lawful permanent residents (after a waiting period), Cuban or Haitian entrants, and citizens of Compact of Free Association nations. ⁵ This change means that some groups who were previously eligible, such as certain refugees and asylees, will no longer qualify for Medicare coverage going forward. ⁶

Cost and Pricing Controls

Cost containment is a major goal in terms of Trump’s healthcare plan agenda. Several proposals are aimed at pharmaceutical prices, provider reimbursements and healthcare price transparency.

In May 2025, the administration issued an executive order to lower drug prices and bring U.S. prescription costs closer to those paid by comparable nations. ⁷ A complementary executive order in February 2025 sought to make healthcare pricing more transparent, giving patients clearer, actionable price data at the point of service. ⁸

One specific drug-pricing mechanism the Trump administration is considering is “most-favored-nation” pricing. Effectively, this would tie U.S. prices to the lowest price paid by other countries for the same medication. The administration also argues it would reduce waste, fraud and administrative costs in Medicare and Medicaid. 

The OBBBA also introduces mandatory cost-sharing for Medicaid expansion enrollees earning above the 100% federal poverty level, with co-pays up to $35 per service, which could affect access among lower-income groups. ⁹  

The “Orphan Drug” Exemption

Beginning in 2026, the OBBBA expands the scope of the “orphan drug” exemption under the Inflation Reduction Act’s Medicare drug-price negotiation program. Under the original law, drugs approved to treat a single rare disease (an “orphan” indication) were exempt from negotiation. However, the new law broadens the exemption to include medications with multiple rare-disease designations or which gain non-orphan indications. ¹⁰

As a result, Medicare will lose some of the bargaining leverage intended to reduce drug costs, because a greater number of high-cost therapies will be shielded from negotiation.

The Congressional Budget Office (CBO) now estimates that the expanded exemption could raise Medicare expenditures by roughly $6 billion over the next decade, representing an increase from an initial estimate of about $4.9 billion. ¹¹ This indicates higher costs for Medicare overall and potentially higher out-of-pocket costs for beneficiaries who rely on those orphan-designated drugs.

Potential Impacts on Access and Affordability

Shifts in coverage and pricing can ripple outward, affecting who can access care and how affordable that care remains.

Analysts estimate that the combination of subsidy reductions, Medicaid cuts and marketplace rule changes could lead to millions losing coverage. The OBBBA is expected to cause around 17 million Americans to become uninsured over the next decade, driven in part by the expiration of subsidy enhancements and more restrictive marketplace policies. ¹²

Hospitals and providers may also see severe revenue impacts. Under one projection, hospitals could lose $321 billion over 10 years, exacerbating closures in underserved communities and reducing available care capacity. ¹³ Low-income individuals and those with high health needs are disproportionately vulnerable, facing higher out-of-pocket costs or reduced benefit coverage.

Affordability is another concern. If premium tax credits decline or disappear, many enrollees would see sharp rises in their insurance premiums. A recent analysis by KFF estimates an increase of 114% due to tax credit calculations and rising 2026 premiums. ¹⁴ The cost burden could push some consumers to downgrade coverage or skip insurance altogether, amplifying health risk and financial exposure. ¹⁵

Bottom Line

Trump’s healthcare vision pivots toward state-managed programs, tighter market rules and aggressive cost controls, while opening the possibility of coverage reductions and increased cost burdens for many. Because the health policy environment is shifting rapidly, staying informed and planning proactively matters. A financial advisor can help you model changing healthcare costs, evaluate insurance options and make moves today that protect your income and coverage tomorrow.

Tips for Affording Healthcare

• A financial advisor can help you plan for ongoing healthcare costs. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Beyond insurance and tax-advantaged accounts, consider setting up a separate savings fund specifically for medical costs. Treat it like an emergency fund for healthcare, covering out-of-pocket expenses, dental work, or unexpected procedures.

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