The new Trump Accounts, offering tax-advantaged investment accounts to every American born between January 1, 2026, and December 31, 2028, were officially launched a month ago on the 4th of July. The US Treasury deposited $1,000 in the accounts of 6 million Americans who signed up (out of the 14.3 million eligible); by the end of July, the number enrolled had reached 7 million. On the Monday after the launch, from the Oval Office, Trump rang the opening bell for the New York Stock Exchange and the NASDAQ to draw added attention to the rollout of this provision of his signature “Big Beautiful Bill.” But whether it was the hullabaloo surrounding the nation’s 250th birthday or Trump upstaging himself by playing referee at the World Cup, the administration’s remarkable experiment in wealth creation didn’t succeed in making many headlines.

　　Comment has been muted and predictable. The left complained that the policy was a Wall Street scam that would deepen income inequality. Worse, it had Trump’s name on it, sufficient grounds to dismiss the accounts as just another exercise in Trumpian egomania. Left-leaning labor historian Richard A. Greenwald claimed that such experiments in “popular capitalism” had always failed in the past. The political right, naturally, beamed and talked about citizen empowerment and the desirability of teaching finance and investing to schoolchildren. As Treasury Secretary Scott Bessent commented last January, the accounts would “render socialist notions moot by making every citizen a shareholder.” Right libertarians shook their heads over government handouts and deficit spending. Left libertarians worried that any public-private partnership was bound to turn into an exercise in rent-seeking.

　　One can sympathize with the libertarian or otherwise small-government reaction, based as it is on long and sad experience. But in this case, past experience is no guarantee of future performance. Too much skepticism risks letting the best be the enemy of the good. A capital fund that’s offered to every citizen and that can be invested in any American company can hardly be described as rent-seeking. The bill’s political and corporate sponsors are surely correct in praising the legislation for offering Americans a real prospect of financial security by the time they reach retirement age.

　　Few commentators, however, noted another advantage of the measure: its long-term potential to ease the strain on retirement programs, chronically under pressure from market fluctuations, inflation, and poor management. And no commentator to my knowledge has recognized how the Trump Accounts could provide a model for getting government out of the health-insurance business, where the threat of insolvency is much greater.

　　Social Security and other retirement programs, for as bad financial shape as they are in, are looking good compared to Medicare. It’s a popular program, as its supporters always point out, but it’s slowly eating up a greater and greater slice of the federal budget pie, which is itself growing bigger and bigger. That means either more debt, higher taxes, or less spending on other priorities. Medicare also has much higher levels of fraudulent and improper payments than other welfare programs. The usual estimates range between six and seven percent, approximately 25 times the rate of misplaced Social Security funds. That’s not chump change.

　　Obviously, the transition would have to be managed gradually, preserving the legacy healthcare system for those who have paid into it and depend on it.

　　Psychologists have identified a cognitive bias called exponential growth bias (EGB) leading people to underestimate processes that accelerate exponentially, like the spread of viruses, population growth, or compound interest. People intuitively think of such processes as linear instead, which is why so many people shirk the task of preparing for retirement.

　　Our elected representatives in Congress seem to be particularly prone to EGB. Otherwise, they might realize that starting a new federal program for healthcare similar to the Trump accounts, expanding and reconfiguring existing HSAs (Health Savings Accounts), could in a surprisingly few years take us to a tipping point where dramatic healthcare reforms would be feasible. HSAs bursting with available funds could put reformers in a position to phase out cost-inflating programs like Medicare and revert to the private, transparent, fee-for-service system the US enjoyed before the Great Society legislation of the 1960s. Given the surprising speed that funds invested at compound interest accumulate, and the tenacity with which our Solons cling to office, present-day supporters of HSA reform might even be able to take credit for its success before they are wheeled off to their nursing homes.

　　Currently, HSAs are limited in their impact on healthcare spending. Forty million Americans already have such accounts, covering perhaps 60 million people. They were originally designed as a supplementary benefit program, available only to adults enrolled in high-deductible health plans (HDHPs). HSAs have proven popular among Gen Z’ers and Millennials, but less so among Gen Xers and Boomers—the generations that need them most. Although they are in effect investment accounts, in that deposits roll over and earn interest, there are strict limits on how much can be deposited per year by individuals and employers. Most individuals start them only when they are first hired at full-time jobs. As things now stand, limits on tax-advantaged healthcare accounts are necessary to control the impact on federal tax receipts. Allowing citizens to sequester larger sums from taxation would erode the tax base too much. Trump Accounts have similar limits for the same reason.

　　It seems possible, however, to redesign HSAs in such a way as to allow the gradual replacement of Medicare—the second-largest entitlement in the federal budget, costing a trillion dollars a year—with a private health system. Here’s one possible way forward.

　　Following the Trump Account model, suppose that all newborn American citizens could be provided with Health Savings Accounts, preloaded with $1,000 from the Treasury.

　　As with the Trump Accounts, there would have to be limits on how much an individual and his or her parents could contribute to personal HSAs, so as not to erode the tax base. But there is no fiscal reason to limit charitable contributions to individual accounts by employers, churches, or charities. Doing so would not require changes in existing regulations covering charitable contributions. It is unlikely that government tax receipts would appreciably diminish.

　　Far from exacerbating income inequality, the rollout of the Trump Accounts has shown the potential for American companies and wealthy individuals to close the gap between low- and high-income earners. Philanthropic enthusiasm for the measure has been rising. At least 93 companies, foundations, individuals, and states have announced contributions to the accounts or, in the case of foster children, establishment of the accounts. The number has almost doubled in less than a month since the 4th of July launch, when 50 companies had already made matching contributions of $ 1,000 to their employees children. Michael and Susan Dell pledged $6.25 billion to put $250 into the accounts of children whose parents live in zip codes below the median-income zones. The billionaire investor Ray Dalio and his wife Barbara donated $75 million to distribute on an equal basis to children born in Connecticut. Putting funds directly into the accounts of fellow citizens makes it possible to cut out the middlemen—large non-profit charities with their highly-paid, inefficient, and overwhelmingly left-wing staff—and establish direct bonds of generosity and gratitude between rich and poor Americans.

　　How then could an expanded HSA program be converted to a private healthcare system, replacing Medicare? Obviously, the transition would have to be managed gradually, preserving the legacy healthcare system for those who have paid into it and depend on it. Taking away promised benefits is a handy noose for those who want to commit political suicide. Here’s one way it could be done without risking the neck of candidates for office.

　　For persons under 50, say, the amounts they have already paid to the federal government in Medicare taxes would be transferred to their HSAs. Persons over 50 could decide whether to remain in the Medicare program or to request a sum, equivalent to double their lifetime payments, to be distributed to their personal HSA. Any amounts previously paid by individuals into HSAs would be deducted from the distribution. Payroll deductions for those remaining in Medicare would continue, but individuals who exited the system would no longer pay 1.45 percent on their earnings. The equal contribution charged to their employers would also stop.

　　Incentives would also have to be created to move medical professionals and hospitals out of the system that Medicare built. Dismantling that system should all by itself win support for the change, given the crushing administrative burdens currently imposed by pharmaceutical companies, insurance companies, and the federal government. The growth of medical bureaucracy has been the inevitable result of offering “free” healthcare to individuals at the point of sale and suppressing market forces. Other incentives might include making individual purchases of medical services tax-free. Licensed, full-time medical professionals, as well as for-profit hospitals and clinics, might be taxed at lower rates. Among other things, such a measure should help alleviate the current shortage of doctors by increasing the attractiveness of careers in medicine.

　　In return, hospitals and providers who wished to exit the Medicare system would be required to operate on a fee-for-service basis, with full price transparency. Price transparency rules have been a priority of both Trump administrations, but the policy would need to be strengthened to ensure real pricing at the point of sale.

　　Why must a safety net have to be provided by politicians and not by local charities, churches, and synagogues?

　　From the older debates surrounding the adoption of Obamacare in 2013, we already know what some of the objections to privatization will be. Elite defenders of the current system will foreground the dangers of spending private funds on quackery. To minimize the perceived dangers to public health, holders of HSAs might be required to spend their funds only on licensed professionals or hospitals and clinics approved by state governments. Licensing of medical professionals and hospitals would continue to be the responsibility of the states, as at present. Inter-state competition should act to prevent consensus among scientific researchers from settling into sclerotic orthodoxies.

　　There would need to be flexibility elsewhere as well for the plan to be politically viable. States would have to decide whether to include mental or dental healthcare. The federal government might need to continue investing in basic research and might remain the insurer of last resort for catastrophic illnesses, should other sources of funding prove insufficient. But in principle the goal would be a market-based system. Pharmaceutical companies, for example, would have to seek investment capital in the normal way, from informed investors, rather than shaking down the public through indirect pricing and by leveraging the market distortions of Medicare. Under a free market system, a few large insurance companies would no longer be in a position to ration healthcare.

　　The public, of course, would have to be educated about the advantages of getting compound interest on your side as early in life as possible. The Trump Accounts can begin teaching that lesson, but there is bound to be a lot of resistance and a deluge of misinformation. Americans aren’t used to taking fiscal responsibility for their own healthcare, and the idea of cradle-to-grave “health security” is an attractive one for those unable to distinguish between having coverage and having actual healthcare. The dysfunction in the current system is increasing thanks to premature AI rollout, which is increasing frustration at all levels of the system. Growing frustration seems at the moment to be giving a political advantage to the Democratic Socialists of America, who hope to reap electoral advantage from the mounting dissatisfaction. They have already been able to convince many misinformed people that a one-payer system will make their lives better and simpler. We can expect the wail to go up that an expanded HSA program is nothing but a hyper-individualist recrudescence of capitalism red in tooth and claw.

　　Promoters of HSA reform should be ready to emphasize the cooperative and charitable nature of the new system. People taking care of people is better than a government AI assistant placing dozens of online obstacles between you and your doctor. The case can and must be made that having your own funds available to pay for services at reasonable market prices will make your life simpler than an endless round of bickering with insurers, drug companies, hospitals, and government bureaucracies. People spending their own money can make demands on service providers that petitioners owning only “entitlements” cannot make.

　　Nevertheless, to change people’s minds, some kind of vibe-shift will clearly be needed. Credible voices need to start asking: Why must a safety net have to be provided by politicians and not by local charities, churches, and synagogues; by the company you work for; by your grandparents, generous tech entrepreneurs, local businessmen and fraternal organizations in civil society? Traditional society was held together by bonds of care and loyalty between the strong and the weak, between the old and the young, between long-term residents and newcomers. Wouldn’t there be great social advantages to a system that rebuilt traditional ties of generosity and gratitude in our nation? Wouldn’t making each other responsible for the health of everyone motivate Americans to stop “bowling alone” and reverse the decay of civil society?

　　Making the creation of Federal HSAs an election-year issue would be an excellent opportunity to focus the public’s attention on the concrete, pocketbook issues at stake. Like measures for educational choice, it might take several elections, experimentation at the state level, and help from private foundations for the measure to build support. Eventually, as the current system becomes more dysfunctional and socialism’s loud chant, “Medicare for All,” is exposed as the song the Sirens sang, the issue might become a big winner at the ballot box. Think of it as a massive dose of GLP-1 for the government as it struggles to control its life-threatening financial weight problem.