Why is US health care still the most expensive in the world after decades of cost-cutting initiatives?

In announcing its in January 2026, the Trump administration became the latest in a long history of efforts by the U.S. government to rein in the soaring cost of health care.

As a physician and professor studying the , I know that the challenges in reforming the sprawling U.S. health care system are immense. That’s partly and even .

But it also reflects a – and the fact that patients, hospitals, health insurance companies and drug manufacturers change their behaviors in conflicting ways when faced with new rules.

Soaring costs

U.S. health care is the , and according to a poll published in late January 2026, two-thirds of Americans are – whether it’s their medications, a doctor’s visit, health insurance or an unpredictably costly medical emergency.

Disputes over health policy even played a in the federal government shutdown in fall 2025.

Trump’s health care framework , but it does establish priorities to address a number of longtime concerns, including , , lowering insurance premiums and making health insurance companies generally more accountable.

Why have these challenges been so difficult to address?

Drug price sticker shock

Prescription drug costs in the U.S. , when drugmakers increased the development of . But efforts to combat this trend have resembled a game of whack-a-mole because the factors driving it are so intertwined.

One issue is the unique set of challenges that define drug development. As with any consumer good, manufacturers price prescription drugs to cover costs and earn profits. Drug manufacturing, however, and with a .

Patent protection is another issue. , but completing costly trials necessary for regulatory approval takes up much of that period, reducing the time when manufacturers have exclusive rights to sell the drug. After a patent expires, generic versions can be made and sold for significantly less, lowering the profits for the original manufacturer. Though some data , the that high prices while drugs are under patent help companies recover their investment, which then funds the discovery of new drugs. And they often , which keeps prices elevated for longer.

Then there are the intermediaries. Once a drug is on the market, prices are typically set through negotiations with administrators called , who negotiate discounts and rebates on prescription drugs for health insurers and employers offering benefits to their workers. Pharmacy benefit managers are paid based on those discounts, so they do not have an incentive to lower total drug prices, though aim to change payment practices. Drugmakers often of drugs to that pharmacy benefit managers negotiate – .

In many countries, centralized government negotiators set the price for prescription drugs, resulting in lower drug prices. This has prompted American officials to consider for setting drug prices here. In its blueprint, the Trump administration has called for a , under which some U.S. drug prices would match the lowest prices paid in other countries.

This may work in the short term, but manufacturers say it could also . And some industry experts worry that it may push manufacturers to .

In late 2025, agreed to most-favored nation pricing for some drugs. Consumers can now buy them directly from manufacturers , a portal that points consumers to drug manufacturers and provides coupons for purchasing more than 40 widely used brand-name drugs at a discount, which launched Feb. 5. However, many drugs available through the platform

Increasing price transparency

Fewer than 1 in 20 Americans know before they receive them. One fix for this seems obvious: Make providers list their prices up front. That way, consumers could compare prices and choose the most cost-effective options for their care.

Spurred by , the government has for health care services over the past decade. In February 2025, the Trump administration for hospitals, which must now post actual prices, rather than estimates, for common medical procedures. Data is mixed on whether the approach is working as planned, however. Hospitals have reduced prices for people paying out of pocket, but , according to a 2025 study.

For one thing, when regulations change, companies make strategic decisions to achieve their financial goals and meet the new rules – sometimes yielding unintended consequences. One study found, for example, that price transparency regulations in a series of clinics led to an because some providers who had been charging less raised their prices to match more expensive competitors.

Additionally, a 2024 federal government study found that . The American Hospital Association, a trade group, suggested price transparency on hospitals while providing confusing information to patients, whose costs may vary depending on unique aspects of their conditions. And the fine for noncompliance, US$300 per day, may be , according to some health policy experts.

Beyond high costs, patients also worry that insurers they receive. Cigna is currently fighting a lawsuit accusing its doctors of – but concerns about claims denial are rampant across the industry. is compounding the problem.

Curbing the rise in health insurance premiums

Many Americans . But curbing that increase significantly may be impossible without reining in overall health care costs and, paradoxically, keeping more people insured.

Insurance works by pooling money paid by members of an insurance plan. That money covers all members’ health care costs, with some using more than they contribute and others less. how many people are in the plan, as well as the services insurance will cover and the services people actually use. Because health care costs are rising overall, commercial insurance companies without reducing their ability to cover costs and absorb risk.

receive health insurance through employers. Another , where enrollment numbers are extremely sensitive to premium costs.

Enrollment in ACA plans , from about 12 million to more than 24 million, when the government introduced subsidies to reduce premiums during the COVID-19 pandemic. But when on Jan. 1, 2026, about , and for most who didn’t, . The Congressional Budget Office projects that in 2027, made since the ACA was passed in 2010.

When health insurance costs rise, . Those who remain insured tend to need more health services, requiring those more costly services to be covered by a smaller pool of people and raising premium prices even higher.

The Trump administration has proposed routing the money spent on subsidies directly to eligible Americans to help them purchase health insurance. How much people would receive is unclear, but wouldn’t cover what the subsidies provided.

To sum it up, health care is extremely complicated and there are numerous barriers to reforms, as successive U.S. administrations have learned over the years. Whether the Trump administration finds some success will depend on how well the policies are able to surmount these and other obstacles.