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On November 26, 2024, the Centers for Medicare and Medicaid (CMS) released their proposed rule with technical changes to Medicare Advantage (MA) and Medicare Part D Prescription Drug plans for Contract Year 2026. This rule creates policy changes based on last year’s final MA payment rule and the Inflation Reduction Act.
For those who had Presidents’ Day off, we hope you enjoyed the holiday weekend. Even with the holiday, things continue to move quickly here in Washington. So, let’s get into it, Welcome to the Week Ahead!
The Administration
Something is cooking at the Department of Health and Human Services (HHS), and given the swearing-in of RFK Jr. as Secretary, we assume the food is not processed. His first full week on the job coincides with the first full week for the Make America Healthy Again (MAHA) Commission. The Secretary and his assistant chefs will have their hands full as the Executive Order creating the Commission calls for an assessment of how to address the childhood chronic disease crisis within 100 days.
Even with all the excitement of a new cook in the kitchen, it’s important to remember that the President remains the top chef and hasn’t been waiting for his staff to arrive. In just 4 weeks, President Trump has issued over 60 Executive Orders since January 20, more than he signed in the first year of his first term! These orders are on top of dozens of other Administration actions that include limiting National Institutes of Health grant funding for “indirect costs” to cutting funding for the Affordable Care Act (ACA) Navigator Program—and we can assume there will be more to come. So, what will he be cooking up this week? We don’t expect Trump to take off his apron any time soon.
The Senate
Senate Budget Committee Chair Lindsey Graham (R-SC) is also eager to serve up his own special dish after the passage of a Senate budget resolution out of committee on February 12. Look for the full Senate to debate the measure soon— possibly as early as this week.
Regarding the ingredients list, several Senate Republicans have said they want to ensure a permanent extension of the 2017 Trump tax cuts makes it into the final recipe. To make that easier, Republicans would have to use the Congressional Budget Office’s “current policy” baseline instead of using “current law” as the baseline. Using “current policy” means making the tax cuts permanent would cost significantly less dough.
Why does that matter? For health care, that means 2 big things. One, Republicans may be less inclined to take a big chunk out of Medicaid spending to offset the cost of extending the tax cuts if the tax cuts cost less. Two, other policies like the enhanced ACA premium tax credits, due to expire at the end of 2025, would also cost less. What Republicans want to do with the ACA tax credits is far from being baked at this point.
In non-budget news, the Senate Health, Education, Labor, and Pensions (HELP) Committee will hold a hearing to consider the nomination of Lori Chavez-DeRemer to be the Secretary of Labor. In that role, she will be in a position to impact health care policy in several ways, including through the administration of the Employee Retirement Income Security Act which sets minimum standards for private, employer-based health plans. While some of her positions have garnered praise from Democrats, we will see if her confirmation will be more like Secretary of Agriculture Rollins, who garnered 19 Democratic votes, or if she will face united Democratic opposition like HHS Secretary Kennedy.
The House
After the House Budget Committee came together to pass its own version of a budget resolution, the House of Representatives adjourned on February 13. This gives the cooks in the House a chance to take their menu on the road and hear from the diners directly while allowing critics to organize their messaging about why the menu should be rejected.
Don’t forget that the expiration of the continuing resolution is less than a month away. Appropriators are rumored to release topline numbers to come out for fiscal year 2025 any day now.
There You Have It
In honor of Presidents’ Day, we wanted to share some presidential trivia with you all, courtesy of the Library of Congress. How many did you get right? Let us know! Make it a great week!
Valentine’s Day is just around the corner, and there are signs of a lover’s quarrel between House and Senate Republicans over who gets to be first to move forward with the budget reconciliation process. There is certainly no love lost between President Trump and congressional Democrats! What does this week hold in DC? Let’s get into it. Welcome to the Week Ahead!
The Administration
Elon Musk and his “Department of Government Efficiency (DOGE)” have turned their attention to the Department of Health and Human Services (HHS). The Centers for Medicare and Medicaid Services (CMS) confirmed in a February 5 statement that “two agency veterans” are working with DOGE staff to find “opportunities for more effective and efficient use of resources in line with meeting the goals of President Trump.” Democratic leaders of the congressional committees with jurisdiction over CMS have called for an investigation highlighting their concerns about DOGE having access to Americans’ personal health information. While the big dollars of waste, fraud, and abuse come from Medicare and Medicaid, you know DOGE will be digging into the Centers for Disease Control and Prevention and Food and Drug Administration soon enough.
The administration is also looking to trim the federal government by buying out federal employees. The deadline for federal workers to take deals was February 6, but a federal judge extended that deadline to February 10, when a hearing is scheduled to consider the legality of the buyout. Regardless of what happens with the buyout and DOGE, the administration’s actions related to federal agencies and the federal workforce have already led to massive disruption at the agencies, including their unwillingness to hold meetings and respond to normal government requests.
The Senate
Senate Budget Committee Chair Lindsey Graham (R-SC) has released a Fiscal Year 2025 budget resolution to advance Trump Administration priorities on defense, border security, and energy. Although health care isn’t the focus, the resolution does call on the Senate Finance Committee to produce at least $1 billion in savings. Senate Finance Committee Ranking Member Ron Wyden (D-OR) sees this as a sign that Republicans will look to make cuts to public health programs to pay for their priorities. However, President Trump has communicated that he does not want to see cuts made to Medicare and Medicaid. Of course, what is and what is not a “cut” is in the eye of the beholder. The Senate Budget Committee is scheduled to consider the budget resolution on February 12 and February 13.
Senate Majority Leader John Thune (R-SD) has filed for cloture on several cabinet nominees, including RFK Jr. to be Secretary of HHS. A vote on his nomination could come as soon as February 14. Trump’s nominee to lead CMS, Dr. Mehmet Oz, is still working on getting his paperwork in order, but his committee hearing is in the offing. Dr. Oz has recently met with Senate Finance Committee Chair Mike Crapo (R-ID) and Senate Health, Education, Labor, and Pensions Chair Bill Cassidy (R-LA), a critical step in the confirmation process.
The House
House Republicans had reportedly been close to unveiling a budget resolution for markup ahead of the Senate Budget Committee’s hearings on February 12 and 13. Accomplishing this would’ve been a nice win for House Speaker Mike Johnson (R-LA) and would’ve sent a message to his caucus that he can move on to the President’s agenda. However, Speaker Johnson called a time out at the Super Bowl last night when he said that markup may need to be postponed in order to get the details right.
The House Ways and Means Health Subcommittee has scheduled the first hearing of the 119th Congress for February 11 to “examine ways to promote healthy living with more options, greater flexibility, and better incentives for patients.” This hearing will focus on employer-sponsored health plans and chronic care, highlighting Buchanan’s recently introduced a bill to allow for employers who offer high-deductible health plans the option of including pre-deductible coverage for certain chronic disease treatments. This bill has also been a priority for Senate Majority Leader Thune, boosting its chances of becoming law this session.
There You Have It
What was your favorite Super Bowl ad? We are posting our favs on LinkedIn! Let us know. Make it a great week!
The Push to Limit Medicaid Enrollment
As we enter 2025, the political landscape in Washington is as polarized as ever. One of the most contentious topics that continues to dominate the national conversation is health care – specifically, the future of Medicaid. With the return of President Donald Trump and a Republican-run Congress, a significant effort is underway to reform Medicaid, which may include limiting Medicaid enrollment or even cutting the program in its current form.
The Republican Plan: Restricting Eligibility and Cutting Costs
President Trump and Congressional Republicans have stated their desire to reform Medicaid, viewing it as overly costly and unsustainable. In January 2025, discussions began to gain momentum about restricting Medicaid eligibility to cut back on government spending. The arguments presented by Republicans center around the need for fiscal responsibility; they point out that the expansion of Medicaid in one reason health care expenditures have skyrocketed over the past several years.
A significant part of this proposed reform includes setting strict eligibility requirements for Medicaid, effectively tightening the criteria for low-income individuals who can qualify. Republicans argue that by narrowing who is eligible, they can reduce the financial burden on taxpayers while still targeting aid to those who are most in need. Some proposals put forward by congressional committees and the administration involve enforcing stricter work requirements, introducing more stringent asset tests to ensure that people are not hiding wealth to qualify for benefits, or capping Medicaid enrollment at a certain number of people.
In addition to limiting eligibility, another avenue for cuts is in the form of reducing the federal contribution to Medicaid. Currently, the federal government covers a significant portion of Medicaid’s costs, but some Republican lawmakers have proposed per capita caps, which would cap Medicaid reimbursement based on historical spending with a predetermined inflationary factor like the Consumer Price Index, the index accounting for urban inflation (the CPI-U), the index for medical inflation (the CPI-M), or a modification of these or others. As the inflationary factor is based on historical rates, the amount given to states will be less than it is currently – CBO has scored this proposal as saving the federal government $907 billion.
The Economic Argument: Saving Money or Straining State Budgets?
From a political standpoint, Republicans argue that Medicaid, as it currently operates, is too expensive and unsustainable. The idea of limiting enrollment is primarily positioned as a fiscal necessity—an attempt to curb the rapidly growing budget deficit and reduce federal spending. Trump and his allies suggest that the federal government cannot continue to foot the bill for expanding Medicaid, especially in the wake of soaring national debt. (Note: The ACA expanded Medicaid to cover nearly all adults with incomes up to 138% of the Federal Poverty Level. The federal government paid 100% of the expansion costs in the 1st two years and pays 90% every year after. This is in comparison to the current match of 50% federal/50% state for traditional Medicaid populations)
However, this position is not without its detractors. Medicaid advocates argue that these proposed cuts would disproportionately harm the most vulnerable members of society. Lower-income families, seniors, people with disabilities, and underserved populations could be left without access to critical health care services. Reducing funding and limiting enrollment could place a large burden on state governments, particularly those in states that expanded Medicaid under the Affordable Care Act (ACA). Many of these states rely on Medicaid expansion to provide health care to millions of low-income residents.
Another consequence of Medicaid program cuts are impacts to hospitals, community health centers, federally qualified health centers, and clinicians. These providers provide a health care safety net for the uninsured – as the number of uninsured rises, so does the provider’s financial burden for uncompensated care. Both the Federation of American Hospitals and the American Hospital Association put out 2025 public policy agendas outlining their push to keep the Medicaid program as is.
Critics of Medicaid population or rate cuts argue that they would lead to long-term economic consequences that could outweigh any short-term savings. For instance, fewer people receiving preventative care could lead to more costly health emergencies down the road, which could place an even greater strain on hospitals and emergency services.
The Politics
The proposal to limit Medicaid enrollment or cut the program entirely is not just a financial issue, it’s a deeply divisive political issue. Medicaid has long been a cornerstone of the Democratic Party’s vision of health care access for all. Democrats argue that health care is a right, not a privilege, and that access to health care should not depend on income. On the other side, Republicans maintain that the government should not be the primary provider of health care insurance, preferring instead to emphasize personal responsibility and market-driven solutions.
Complicating Republican efforts to move forward with program change are Medicaid beneficiaries themselves. Most of who like their Medicaid care – a recent KFF poll found that 77% of people have a favorable opinion of the Medicaid program. Reducing a popular program is never a good recipe for future electoral success.
What’s Next?
As we move through 2025, the future of Medicaid remains uncertain but President Trump’s return to the political spotlight has rekindled the debate. During Robert F Kennedy Jr.’s recent confirmation hearing, the subject of Medicaid access and funding was brought up over and over. The stakes are high, and with the 2026 midterm election looming on the horizon, it’s clear that Medicaid will remain a key issue in the ongoing political discourse.
