United States President Donald Trump has introduced an ambitious new plan to replace the Affordable Care Act, popularly known as Obamacare, with a cash-based health insurance system.
Trump unveiled the plan, dubbed “Health Freedom America,” at a news conference in Washington, D.C., and characterized the plan as one that would restore “power and choice” to the American people.
The proposal would give Americans direct monthly cash payments, called health freedom credits, to purchase private insurance or cover medical costs directly.
“Our plan puts power back in the hands of the American people,” Trump said. “Instead of Washington bureaucrats deciding your health care, every American will get cash to choose the plan and doctor they trust.”
The new plan would eliminate many of Obamacare’s federal subsidies and mandates. Adults earning below a set income level would qualify for full credits, while higher-income earners would receive smaller payments on a sliding scale.
Trump claimed the plan would foster competition among private insurers, while reducing “artificial inflation” caused by government control.
Although the proposal stops short of repealing all the ACA provisions, it would end Medicaid expansion and dismantle the federal insurance marketplace. Trump also promised continued protections for people with preexisting conditions, though critics questioned how such guarantees would work without the ACA’s framework.
The announcement reignited the fierce partisan debate over America’s health care future.
Overall, the move was largely praised by Republicans and conservative groups. Senator Rick Scott, R-FL, said it was “the kind of innovation we’ve been waiting for” because it empowers rather than punishes people.
Democrats, however, blasted the proposal as dangerous. White House Press Secretary Karine Jean-Pierre said it “risks sending millions back to the days when families went bankrupt over medical bills,” adding that “cash handouts don’t guarantee care or affordability.”
The health policy analysts were divided on the reaction. Dr. Lena Whitaker, a senior fellow at Brookings Institution, warned that minus strong regulations, the plan could hike the cost for older and sicker Americans.
“Giving people money sounds simple,” she said. “But insurance markets are complex. Without risk pooling, costs could rise for those who need care most.”
Trump said the full legislative draft would be released “in the coming weeks” and urged Congress to “act fast to restore health care freedom.”
The plan is a cornerstone of Trump’s 2025 campaign platform and, if successful, would represent the most consequential revamp to U.S. health care since the ACA took effect in 2010.
If adopted, it would shift federal spending from insurance subsidies to direct consumer payments and redefine the way Americans access and pay for medical care.