Personal Finance

How Trump’s win could change your health care

Published

4 months ago

November 18, 2024

Business Finance News

U.S. President-elect Donald Trump arrives on November 13, 2024 at Joint Base Andrews, Maryland.

Andrew Harnik | Getty Images

President-elect Donald Trump‘s return to the White House is poised to have big impacts on consumer health care.

Republicans may face few legislative roadblocks with their goals of reshaping health insurance in the U.S., experts said, after the party retained its slim majority in the House of Representatives and flipped the Senate, giving it control of both Congress and the presidency.

Households that get health insurance from Medicaid or an Affordable Care Act marketplace plan may see some of the biggest disruptions, due to reforms sought by Trump and Republican lawmakers, according to health policy experts.

Such reforms would free up federal funds that could be used to help pay for other Republican policy priorities like tax cuts, they said.

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Just under 8% of the U.S. population is uninsured right now — the lowest rate in American history, said Michael Sparer, a professor at Columbia University and chair of its Department of Health Policy and Management. That figure was 17% when the Affordable Care Act was enacted over a decade ago, he said.

“That rate will start going up again,” Sparer said.

Trump announced on Nov. 14 that he wants to tap Robert F. Kennedy Jr. to run the Department of Health and Human Services, which includes the Centers for Medicare and Medicaid Services. CMS, in turn, administers the Affordable Care Act marketplace and the Children’s Health Insurance Program (CHIP), among other endeavors.

Robert F. Kennedy Jr. speaks with Republican presidential nominee former President Donald Trump at a Turning Point Action Rally in Duluth, GA on Wednesday, Oct. 23, 2024.

The Washington Post | The Washington Post | Getty Images

Kennedy, a vaccine skeptic who’s been accused of spreading conspiracy theories, has vowed to make big changes to the U.S. health care system.

A spokesperson for Trump’s transition team did not respond to a request from CNBC for comment about the President-elect’s health policy plans.

Here’s how health care could change for consumers during the incoming Trump administration, according to experts.

Affordable Care Act marketplace

A lab technician cares for a patient at Providence St. Mary Medical Center on March 11, 2022 in Apple Valley, California.

Mario Tama | Getty Images News | Getty Images

‘Betting’ premium subsidies will expire

Based on how the election went, the enhanced subsidies on the Affordable Care Act will likely not be renewed once they expire at the end of 2025, said Cynthia Cox, vice president and director of the ACA program at KFF, a health policy research organization.

“If I was going to place a bet on this, I’d be much more comfortable betting that they are going to expire,” Cox said.

That government-backed aid, originally passed during the pandemic under the American Rescue Plan in 2021, has significantly lowered the costs of coverage for people buying health insurance plans on the ACA marketplace. Those customers include anyone who doesn’t have access to a workplace plan, such as students, self-employed consumers and unemployed people, among others.

An individual earning $60,000 a year now has a monthly premium of $425, compared to $539 before the enhanced subsidies, according to a rough estimate provided by Cox. Meanwhile, a family of four making about $120,000 currently pays $850 a month instead of $1,649.

Permanently extending the enhanced ACA subsidies could cost around $335 billion over the next 10 years, according to an estimate by the Congressional Budget Office.

“They’re concerned about the cost, and they’re going to be cutting taxes next year likely,” Cox said, of Republicans.

Still, it’s a ‘big’ gamble to forgo health insurance

Around 3.8 million people will lose their health insurance if the subsidies expire, the Congressional Budget Office estimates. Those who maintain their coverage are likely to pay higher premiums.

“The bottom line is uncertainty,” said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy.

“The good news for marketplace consumers is that the enhanced [subsidies] will be available through 2025, so there should be no immediate changes,” Corlette added.

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Even if the subsidies disappear, experts say it’s important to stay enrolled if you can, even if you have to make tradeoffs on coverage to keep the costs within budget.

Enrolling in a plan, even a cheaper plan with a big annual deductible, can provide an important hedge against huge costs from unforeseen medical needs like surgery, said Carolyn McClanahan, a physician and certified financial planner based in Jacksonville, Florida.

“I can’t emphasize how big a gamble it is to go without health insurance,” said McClanahan, founder of Life Planning Partners and a member of the CNBC Financial Advisor Council.

“One heart attack easily costs $100,000” out of pocket for someone without insurance, she said. “Do you have that to pay?”

Medicaid

A ‘pretty big target’ for lawmakers

Medicaid is the third-largest program in the federal budget, accounting for $616 billion of spending in 2023, according to the Congressional Budget Office. Trump campaigned on a promise not to make cuts to the two largest programs: Social Security and Medicare.

That makes Medicaid the “obvious place” for Republicans to raise revenue to finance their agenda, said Larry Levitt, executive vice president for health policy at KFF.

“Medicaid will have a pretty big target on its back,” Levitt said.

The bottom line is uncertainty.

Sabrina Corlette

co-director of the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy

Cuts would “inevitably mean” fewer households would get benefits, Levitt said. Medicaid recipients tend to be lower-income households, people with disabilities and seniors in nursing homes, he said.

Medicaid cuts were a big part of the push among Trump and other Republican lawmakers to repeal and replace the Affordable Care Act (also known as Obamacare) in 2017, Levitt said.

Those efforts were ultimately unsuccessful.

How Medicaid might be curtailed

Maskot | Maskot | Getty Images

The new Medicaid cuts may take many forms, according to experts, who cite past proposals and remarks from the Trump administration, Republican lawmakers and the Project 2025 conservative policy blueprint.

For example, the Trump administration may try to add work requirements for Medicaid recipients, as it did during his first term, said Sparer of Columbia University.

Additionally, Republicans may try to cap federal Medicaid spending allocated to states, experts said.

The federal government matches a portion — generally 50% or more — of states’ Medicaid spending. That dollar sum is uncapped.

Republicans may try to covert Medicaid to a block grant, whereby a fixed amount of money is provided annually to each state, or institute a per-capita cap, whereby benefits are limited for each Medicaid enrollee, Levitt said.

Lawmakers may also try to roll back the Medicaid expansion under the Affordable Care Act, which broadened the pool of people who qualify for coverage, experts said.

They could do this by cutting federal financing to the 40 states (plus the District of Columbia) that have expanded Medicaid eligibility. That would shift “an enormous financial risk to states, and many states as a result would drop the Medicaid expansion,” Levitt said.

Short-term health insurance plans

Under the previous Trump administration, consumers saw an increase in the availability of non-ACA compliant health insurance options, including short-term plans, experts say. The same is likely to happen over the next four years.

Short-term health insurance plans offer coverage for limited amounts of time, and typically on fewer medical services than comprehensive coverage.

Proponents of these plans say they allow insurers to offer consumers lower monthly premiums because they’re not required to cover as many services. At the same time, the plans are able to reject people with pre-existing conditions or charge them more. While Trump was in office, enrollment in short-term plans spiked.

The U.S. Capitol building in Washington, D.C., Oct. 4, 2023.

Yasin Ozturk | Anadolu Agency | Getty Images

“The previous Trump administration and many in the GOP have called for expanding the marketing and sale of short-term plans and other insurance products that do not have to satisfy the ACA’s pre-existing condition standards and other consumer protections,” said Georgetown University’s Corlette.

She said that consumers can be attracted to the plans for their low costs, but often learn too late how thin the coverage is.

Drug prices

The Trump administration’s stance on drug pricing is murkier, health experts said.

The Inflation Reduction Act, which President Biden signed into law in 2022, introduced many drug price reforms.

Trump has vowed to roll back parts of the law, which also contains many climate-related provisions and tax breaks toward which he is hostile.

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It’s unclear if lawmakers would keep the drug policies intact, experts said. Trump signed executive orders in 2020 aimed at lowering costs for prescription medications, for example.

“It’s not at all clear Trump will be a friend of the pharma industry,” Sparer said.

For example, the Inflation Reduction Act gave the federal government — for the first time — the authority to negotiate prices with pharmaceutical companies over some drugs covered by Medicare.

That provision is slated to kick in for 10 drugs — some of Medicare’s “most costly and most used” medications, treating a variety of ailments like heart disease, diabetes, arthritis and cancer — in 2026, according to the Centers for Medicare and Medicaid Services.

The measure will save patients $1.5 billion in out-of-pocket costs in 2026, CMS estimates. The federal government would expand the list of medications in ensuing years.

The Inflation Reduction Act also capped Medicare co-pays for insulin at $35 a month. They were previously uncapped. The average Medicare Part D insulin user had paid $54 out-of-pocket a month per insulin prescription in 2020, according to KFF.

The law also capped out-of-pocket costs at $2,000 a year for prescription drugs covered by Medicare, starting in 2025. There was previously no cap.

About 1.4 million Medicare Part D enrollees paid more than $2,000 out-of-pocket for medications in 2020, KFF found. Those costs averaged $3,355 a person.

Personal Finance

The U.S. government is phasing out paper checks. What that means for you

Published

14 hours ago

April 1, 2025

Business Finance News

Checks are printed at the U.S. Treasury Philadelphia Finance Center in Philadelphia, Pennsylvania.

Dennis Brack | Bloomberg | Getty Images

Paper checks were already dying a slow death.

President Donald Trump on March 25 signed an executive order mandating that all federal departments and agencies end their use of paper checks and switch to electronic payments by Sept. 30.

The U.S. Treasury now has about six months to phase out the paper checks it uses for various purposes, including tax refunds and the roughly 456,000 Social Security checks that are mailed monthly.

The executive order will “modernize how the government handles money, switching from old-fashioned paper-based payments to fast, secure electronic payments,” the administration said in a fact sheet on the order.

“Paper-based payments, such as checks and money orders, impose unnecessary costs, delays, and risks of fraud, lost payments, theft, and inefficiencies,” the White House said.

Under the order, all government departments and agencies will have to issue disbursements via electronic transfer methods, like direct deposit, debit or credit card payments, digital wallets and real-time transfers.

Consumers will have until then to set up an online bank account or some form of digital payment option, with limited exceptions for those who do not have access to banking services or electronic payment systems.

Banking groups applauded the move.

“We welcome President Trump’s executive order mandating that the federal government cease issuing paper checks for all disbursements, including government benefits and tax refunds,” Rob Nichols, president and CEO of the American Bankers Association said in a statement. “Despite a continued decline in business and consumer use of checks, check fraud has continued to rise.”

Check fraud, mail theft and identity scams have exploded in recent years, according to Haywood Talcove, CEO of LexisNexis Risk Solutions’ government group. A 2024 report from the U.S. Government Accountability Office estimated that the federal government could lose between $233 billion and $521 billion a year to fraud.

“Checks aren’t safe anymore,” Talcove said. “It’s where the criminal groups are feasting.”

As part of the executive order, payments made to the federal government — such as fees, fines, loans and tax refunds — must also be made electronically.

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With significant advancements in security — thanks to authentication, monitoring and data encryption — retailers’ and consumers’ shift to contactless and digital payment methods will only continue to grow, accelerating the move toward a “check zero” world, according to Scott Anchin, vice president of operational risk and payments policy for the Independent Community Bankers of America.

However, there are still certain groups that rely on paper checks, including some of the nation’s most vulnerable populations such as social security beneficiaries and those who receive rental assistance, or Temporary Assistance for Needy Families.

Check writers generally skew older and are likely at the margins of the banking community, according to Anchin. Americans over the age of 55 were most likely to write checks every month, the survey from GoBankingRates found.

But these groups are also most at risk of being targeted by scammers, Talcove said. “The elderly are significantly disadvantaged by the antiquated systems and you have to get them into digital payments.”

The death of checks

Although checks, as we know them today, first originated in the 11th century, they didn’t become mainstream until the early 20th century following the Federal Reserve Act of 1913, according to a historical survey by the Federal Reserve Bank of Atlanta.

But back then, “everyday people didn’t have checking accounts, that was for rich people,” Stephen Quinn, professor of economics at Texas Christian University and co-author of the Atlanta Fed’s report, previously told CNBC. “It wasn’t until after World War II that checking accounts were a common thing.”

Postwar prosperity greatly expanded the use of checking accounts to middle-class households, making checks the most widely used noncash payment method in the U.S., according to the Atlanta Fed.

Personal checks continued to gain steam until the mid-1990s, when credit and debit cards largely took over. Since 2000, check-writing has plummeted by nearly 75%, according to the U.S. Federal Reserve Board of Governors.

Despite the rapid decline, “a form of payment with a thousand-year history is unlikely to vanish overnight,” the Atlanta Fed report said.

And yet, today’s young adults are increasingly eschewing the traditional banking and credit infrastructure altogether in favor of peer-to-peer payment apps.

Quinn said his students rely almost exclusively on digital wallet payments such as Apple Pay, Venmo and Zelle — hardly anyone carries cash, and it’s likely that few even know how to write a check.

Mobile payment apps have become de facto bank accounts even though, unlike banks or credit unions, these financial services are not FDIC-insured.

Still, there remains a place for personal checks, Quinn said.

“The paper check might linger where it began, at the high end — for large one-off payments,” he said, such as charitable donations or real estate transactions. “In this way, checks might hold on for some time.”

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Personal Finance

Social Security changes may impact customer service, benefit payments

Published

16 hours ago

April 1, 2025

Business Finance News

A Social Security Administration (SSA) office in Washington, DC, March 26, 2025.

Saul Loeb | Afp | Getty Images

Fast-moving changes at the Social Security Administration by the Trump administration’s so-called Department of Government Efficiency have prompted concerns that it may be more difficult for beneficiaries to access the agency’s services.

Some experts are raising concerns that efforts to update the agency’s systems could impact the continuity of benefits.

“Now I’m concerned that benefits could get disrupted,” said Jason Fichtner, a former deputy commissioner at the Social Security Administration who was appointed by President George W. Bush.

Recent changes that have been announced by the agency are cause for concern, experts including Fichtner say.

President Donald Trump has repeatedly vowed not to touch Social Security benefits. Yet recent changes could make it more difficult for eligible Americans to access benefits.

The SSA under the Trump administration has moved to eliminate 7,000 Social Security employees and close six regional offices, Fichtner and Kathleen Romig, a former Social Security Administration senior official, wrote in a recent op-ed. Romig is the director of Social Security and disability policy at the Center on Budget and Policy Priorities.

The cuts will affect the service Americans receive when they either visit Social Security’s website, which has experienced glitches; call its 800 number, which has long wait times; or visit a field office, which can be crowded, they wrote.

That may make it more difficult for eligible Americans to claim benefits, particularly those with disabilities, who may run the risk of dying before receiving the money for which they are eligible.

“The Social Security Administration is in crisis, and people’s benefits are at risk,” Fichtner and Romig wrote.

‘You have to understand the complexity of the programs’

Fichtner said his worries are elevated following reports that the Social Security Administration under DOGE plans to move “tens of millions of lines of code” written in a programming language known as COBOL within an accelerated time frame of a few months.

“If you start messing with the system’s code, that could impact those who are currently getting benefits now, and that’s a new front-and-center concern,” said Fichtner, who is a senior fellow at the National Academy of Social Insurance and executive director at the Retirement Income Institute at the Alliance for Lifetime Income.

While the Social Security’s systems could use an upgrade, projects of this size are typically handled over a period of years, not months, Fichtner said. Moreover, they typically start out with smaller tests, such as with one state, to identify bugs or other issues, before expanding regionally and then nationally, he said.

“You can’t just flip a switch one night and expect to be able to upgrade,” Fichtner said. “It takes due diligence, and you have to understand the complexity of the programs.”

Before the COBOL transition reports, Fichtner said he had not been worried about benefit interruptions, though he had been concerned that changes at the agency may impact customer service and that applicants for benefits may see delays.

“There is no validity to these reports,” a Social Security Administration spokesperson told CNBC via email.

In an email statement, the White House also said, “There is no validity to these reports.”

Bigger reforms should be focus, experts say

As DOGE seeks to eliminate fraud at the Social Security Administration, some experts say the focus is misplaced.

To that point, focusing on the agency’s administrative side takes away from the bigger issue the program faces of the looming depletion of the trust funds it uses to help pay benefits, experts say.

DOGE may have good intentions to make the Social Security Administration more efficient, but its actions may not “meaningfully change the financial trajectory of the program,” said Romina Boccia, director of budget and entitlement policy at the Cato Institute, a libertarian think tank.

If DOGE makes changes that have to be reversed, that could get in the way of the benefit reforms that Congress must also consider before a projected 2033 trust fund depletion date, she said.

“Current erratic actions have the potential to undermine those much more important, bigger reforms in a misguided attempt to root out very small levels of fraud,” Boccia said.

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The Social Security’s trustees in 2024 projected the program’s combined retirement and disability trust funds may last until 2035, at which point just 83% of benefits will be payable unless Congress finds a way to fix the situation sooner.

Those 2024 projections also found the retirement trust fund on its own faces a sooner depletion date of 2033, when 79% of benefits may be payable. A new law that provides more generous benefits for certain public pensioners is expected to move the projected depletion dates closer.

Because the Social Security Administration’s administrative budget is less than 1% of outlays, it’s not the best area to focus on to make the program more cost-effective and efficient, said Charles Blahous, a former public trustee for Social Security and Medicare and deputy director of President George W. Bush’s National Economic Council.

“There’s just not enough money there to make serious headway,” said Blahous, a senior research strategist at George Mason University’s Mercatus Center.

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Personal Finance

How entrepreneurial military spouses build retirement security

Published

17 hours ago

April 1, 2025

Business Finance News

fstop123 | E+ | Getty Images

It’s scary enough for individuals to take a chance on themselves and start their own business, but the spouses of military servicemembers are often grappling with a unique set of hurdles on the journey toward entrepreneurship.

Certified financial planner Adrienne Ross can speak to that personally. She and her now-retired Marine Corps husband were constantly on the move during his military career, and that made the complicated process of earning her bachelor’s degree a yearslong process.

“We would move, and it would be like going through the process all over again,” recalled Ross, a partner at Clear Insight Wealth Management in Spokane, Wash. “I went to multiple colleges to complete a degree, and we were never in one place long enough.”

She ultimately completed her education at the University of Illinois Springfield through an online program while she and her family were living outside the U.S., but the ordeal informed her decision to become a financial planner, hang out her own shingle and work with military families toward financial stability.

“The client base I focused on serving is military families because I understand what it’s like to move all the time and have so many disruptions to your work life and personal life – and how it impacts your financial journey as well,” she said.

Unique advantages and disadvantages

The itinerant lifestyle that Ross grappled with as she worked on her degree can be a handicap for military spouses who are trying to build out a business.

“The number one additional hurdle would be things like business licensing,” said Bill Sweet, CFP and CFO at Ritholtz Wealth Management and U.S. Army combat veteran. “Each state and municipality will have its own licensing requirements, and there isn’t always reciprocity.” That’s often the case for teachers and nurses, for example.

“If you’re moving around every two to three years to follow your spouse, it becomes difficult to redo your nursing license on a business income,” he said. “But when it comes to things like retirement savings, I think there are a lot of neat things you can do.”

Servicemembers can enroll in the federal government’s Thrift Savings Plan, for instance, which offers benefits and savings like the 401(k) plans available to private-sector employees.

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A spousal individual retirement account might be a good starting point for military spouses, even if they themselves aren’t yet employed. The servicemember can sock away up to $7,000 in 2025 ($8,000 for those age 50 and older) into the spouse’s IRA. To make this work, the married couple must be filing jointly.

“Most families today live on two incomes, so they should plan on retiring on two incomes,” said John Power, CFP at Power Plans in Walpole, Mass. “Every military spouse should have a spousal IRA. The IRS allows you to deduct from your income to contribute to your spouse’s IRA – and if you can do that, you should do that.”

While the spousal IRA is enough to start stashing money away for retirement, entrepreneurs can take other steps to beef up their savings as their business grows.

In Ross’s case, she started out with a Roth IRA – a retirement account where contributions are made on an after-tax basis but grow tax free and, most importantly, are free of tax upon withdrawal. “I love Roth IRAs,” she said. “They are super flexible, available to many people and very attainable, especially if you’re getting started with a small business.”

Roth IRA contribution limits are capped at $7,000 for those under 50 ($8,000 for those 50 and over). Be aware that if you have both a traditional IRA and a Roth IRA, the contribution limit of $7,000 is an aggregate amount. The upshot of Roth IRAs? You don’t need a whole lot of money to start saving in the first place.

“You can start with as little as $50 a month, and in most places fees are very reasonable,” Ross said.

Graduating to more complex savings options

When Ross’s business grew, she shifted into using a simplified employee pension plan, or SEP IRA, for retirement savings. These plans are specifically for small businesses, and they don’t come with the hefty start-up costs you might see in conventional retirement plans.

The upshot for young businesses is that the annual contributions to SEP IRAs are flexible, which can be handy in the early years when cash flow is inconsistent. Generally, these accounts allow for a contribution of up to 25% of an employee’s pay (or up to $70,000 in 2025). It should be noted that participant loans are not allowed under these arrangements, however.

“In terms of planning your own retirement, treat the business like a job and treat yourself as an employee of that business,” said Sean Gillespie, president of Redeployment Wealth Strategies in Virginia Beach, Va. “Take the proceeds and feed your retirement the way you would if you were [a W-2 employee] working for someone else.”

Eventually, Ross and Gillespie partnered with another advisor to form a registered investment advisory firm called Apforia. Because of this arrangement, they had the assets and the economy of scale needed to start a 401(k) plan.

In 2025, individuals can put away up to $23,500 in a 401(k) plan, plus $7,500 if they’re 50 and over (or up to an additional $11,250 for employees aged 60 to 63).

It’s OK to seek help

Military spouses seeking to make the leap into entrepreneurship should leverage their connections to peers.

“Having that connection to other military spouses who have their own businesses was really important,” said Ross. “They have that same understanding of what it’s like to be living a nomadic life and trying to build a business or career for yourself despite all of that.”

They should also invest in themselves by calling in a financial planner or an accountant who can help them build a resilient and healthy business.

“Ultimately, I think working with a professional will pay off, and being proactive,” said Sweet. “Pay a little out of pocket and talk to a CPA or CFP about setting up a business.”

JOIN the CNBC CFP® Circle for Mission: Money Management on April 1. This exclusive virtual roundtable, held in partnership with The Association of Military Spouse Entrepreneurs, will focus on how to best manage money effectively. Get your free ticket today!