Trump unveils health care framework aimed at lowering costs in latest affordability push

By Tami Luhby, CNN

(CNN) — President Donald Trump unveiled a multipart proposal on Thursday aimed at lowering prescription drug prices and reducing health insurance premiums, as well as increasing price transparency within the health care system.

The White House is positioning the package – dubbed the “Great Healthcare Plan” – as a framework to help Congress craft legislation to address cost challenges in health care. Light on details, the proposal comes as the president is seeking to show Americans that he’s addressing their affordability concerns.

Administration officials also stressed that the effort is more comprehensive than just a long-promised replacement for the Affordable Care Act.

“This is much broader than the Affordable Care Act,” a White House official told reporters. “This gets at reducing health care costs all throughout the health care system.”

Mehmet Oz, the Centers for Medicare and Medicaid Services administrator, told reporters that “big, seismic shifts” are needed to address the issues in the US health care system.

“The real question is, how do we get past lazy lawmaking to actually start to address the underlying problems, not just throw more taxpayer money at issues, but get to the root causes of why the system right now is not working the way it needs to,” he said.

While some of the proposals may have bipartisan support, such as clamping down on pharmacy benefit managers, many will face Democratic opposition in Congress, particularly because it would not extend the lapsed enhanced Obamacare premium subsidies. Notably, the administration is not seeking to enact the plan through reconciliation, which would allow the Senate to approve it with a simple majority vote.

The White House push likely puts an end to the bipartisan talks on Capitol Hill, where some senators were seeking a way to revive the enhanced Affordable Care Act subsidies while including restrictions favorable to Republicans.

The House last week passed a measure extending the lapsed subsidies for three years after several GOP members revolted and sided with Democrats. But, as written, it had no path forward in the Senate, and many Republicans were looking to Trump for guidance on their next steps.

‘A largely political exercise’

Tens of millions of Americans are contending with higher costs for health coverage this year, with premiums jumping in employer plans, Medicare and Obamacare.

The framework, however, does not call for making major changes to the Medicare, Medicaid and job-based coverage, which is where the majority of Americans get their health insurance. It also doesn’t seek to compel hospitals and doctors to lower their prices – a large component in health care costs.

At least one health care analyst panned the measure, calling it “a largely political exercise.”

“We think it is intended to demonstrate that the White House is doing ‘something’ about affordability and healthcare prices, but we believe the policies either stand little chance of being enacted by the current Congress or will have a minimal impact if enacted,” Spencer Perlman, director of health care research at Veda Partners, wrote in a note to clients.

The plan proposes sending federal premium subsidies directly to consumers, not insurers, as the president has advocated for in recent months amid the debate over extending the lapsed Affordable Care Act assistance. It would also resume federal payments for a second set of Obamacare subsidies that reduce out-of-pocket costs for low-income enrollees, which would likely raise premiums for a wide swath of folks with marketplace coverage.

In addition, the president says he will hold big insurance companies accountable, requiring them to disclose how much they spend paying claims and how often they deny care – a major pain point for many patients.

Part of the framework builds on measures the president enacted in his first term or deals he struck over the past year, including asking lawmakers to codify his “Most Favored Nation” drug pricing agreements with more than a dozen pharmaceutical manufacturers.

But some of the plan’s components rest heavily on giving consumers and employers more information with the goal of lowering costs by encouraging more shopping for care and coverage. The first Trump administration required hospitals and insurers to post certain prices, but experts say that most patients don’t shop for care. Also, some hospitals have used the data to try to negotiate higher payment rates from insurers and employers, even as they push to lower how much they pay providers.

“It’s not going to be a magic bullet,” said Cynthia Cox, senior vice president at KFF, a nonpartisan health policy research group. “It’s probably a relatively small share of health care spending that is able to be moved by price transparency.”

This story has been updated with additional details.

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