How the Trump Administration Is Using Health Care to Bankrupt Everyday Americans

When Americans get sick, they shouldn’t have to fear financial ruin. But under recent Trump administration actions, the safety nets that once protected families from medical debt and skyrocketing insurance costs are being dismantled, placing millions of working- and middle-class Americans at risk.

A One-Two Punch: Rising Premiums and Vanishing Subsidies

In 2026, the cost of Affordable Care Act (ACA) marketplace insurance plans is set to surge by 26% on average, according to KFF analysis. The increases are even steeper in the 33 states that rely on Healthcare.gov, around 30%, compared to 17% in states running their own marketplaces.

That’s bad enough. But the real disaster looms if Congress fails to extend the enhanced premium tax credits that make coverage affordable for most families. Without these subsidies, 22 million out of 24 million ACA enrollees will see their premiums skyrocket. KFF estimates that the average American receiving a subsidy would face a 114% increase in their monthly payments, more than double what they pay now.

In plain terms, families who currently pay $400 a month for insurance could soon face bills closer to $850. Many will be forced to choose between coverage and other essentials like food, rent, or medication.

Insurers themselves acknowledge that they’re hiking rates even higher, by an estimated 4 percentage points, because they expect healthier people to drop out of the marketplace if subsidies disappear. The result will be a sicker, more expensive insurance pool and an even greater financial burden for those who remain.

Weaponizing Medical Debt

While health insurance grows less affordable, the Trump administration is also making it easier for medical debt to haunt Americans’ financial lives.

In a sweeping policy reversal, the Consumer Financial Protection Bureau (CFPB), under Trump-appointed leadership, declared that federal law overrides state bans on reporting medical debt to credit bureaus. States such as Colorado, New York, and Maryland had passed laws preventing hospitals and debt collectors from wrecking patients’ credit over unpaid medical bills. The Trump administration’s CFPB says those state protections are invalid, claiming the Fair Credit Reporting Act (FCRA) preempts state laws.

This move overturns guidance issued under the Biden administration, which had empowered states to protect consumers from the devastating impact of medical debt reporting. At the time, roughly 15 million Americans had medical debt on their credit reports, totaling over $49 billion. Those debts often stemmed from emergencies like cancer, chronic illness, or childbirth, circumstances beyond any person’s control.

By reinstating the ability to report unpaid medical bills to credit bureaus, the administration is effectively punishing Americans for getting sick. It’s a policy that hits hardest those already struggling, people who lost jobs due to illness, cancer patients battling both disease and debt, and families blindsided by surprise hospital bills.

The Human Toll

The combined effect of these two policy shifts is devastating. Millions could lose affordable coverage, while those who fall ill risk long-term credit damage. Together, these changes create a cycle of financial destruction:

• Higher premiums push families to drop coverage.

• Loss of insurance leads to more unpaid medical bills.

• Medical debt reported to credit bureaus destroys credit scores.

• Ruined credit makes it harder to rent apartments, buy homes, or get loans, trapping people in financial precarity.

  
  

Consumer advocates like Chi Chi Wu of the National Consumer Law Center warn that allowing medical debt back on credit reports “adds salt to the wound,” making recovery even harder for those already struggling to pay for care.

A Cruel Philosophy

Both actions, the rollback of medical debt protections and the failure to sustain health insurance subsidies, reflect a consistent philosophy: that health care is a privilege, not a right.

The administration frames its preemption move as protecting “national standards” for credit reporting. But in practice, it strips states of the power to defend their citizens against predatory practices. Similarly, the refusal to extend enhanced tax credits undercuts one of the most successful elements of the Affordable Care Act, making insurance affordable for working families.

Meanwhile, insurers, hospitals, and pharmaceutical companies continue to raise prices, citing everything from GLP-1 drugs like Ozempic to hospital cost inflation. Everyday Americans are left holding the bag.

The Bottom Line

Taken together, these actions represent a coordinated assault on Americans’ financial health. At a time when millions live paycheck to paycheck, the Trump administration’s policies are making illness not just a medical crisis but an economic one.

Health care should heal. Instead, it’s becoming a weapon used to punish those who can least afford it.