Insights^

On September 18, 2025, the Medicaid and CHIP Advisory Commission (MACPAC) convened for the first day of its September meeting. Commissioners examined work and community engagement (WCE) requirements in Medicaid, heard from a panel of experts on the challenges and implications of implementing requirements, and later turned to Medicaid payment policies aimed at strengthening the home- and community-based services (HCBS) workforce.

WORK AND COMMUNITY ENGAGEMENT REQUIREMENTS IN MEDICAID

MACPAC staff reviewed the history and status of Medicaid WCE requirements. Initially tested through Section 1115 demonstrations, MACPAC’s staff findings found these efforts led to significant coverage losses due to administrative hurdles and compliance barriers, with Arkansas being the only state to fully disenroll beneficiaries before courts halted most programs. Georgia’s “Pathways to Coverage” remains the only active demonstration, though enrollment has been lower than expected, particularly for older adults.

MACPAC staff detailed how the 2025 Budget Reconciliation Act, mandates certain non-pregnant, non-dually eligible adults aged 19–64 to complete 80 hours per month of work, education, or community service—or demonstrate income at the federal minimum wage equivalent—to maintain Medicaid coverage. The law establishes numerous exemptions (e.g., caregivers, medically frail individuals, American Indians/Alaska Natives, veterans with disabilities) and hardship provisions, requires monthly compliance checks and clear notices, and sets a national implementation deadline of January 2027 (with possible extensions to 2028). Federal funds totaling $400 million have been allocated to support both state implementation and federal oversight. MACPAC staff noted that policymakers and stakeholders remain concerned that, despite exemptions, the new requirements could still result in administrative complexity and coverage losses similar to past demonstrations.

During the discussion, commissioners asked staff to clarify how community engagement requirements would apply across different eligibility groups. One commissioner questioned whether non-expansion states would be affected if they expanded coverage through Medicaid Group A, and staff explained that the requirement is limited to individuals applying under that group. Questions were also raised about past state experiences, such as how many beneficiaries in Arkansas lost coverage due to work requirements, though staff noted that data was not available. Commissioners expressed interest in how the Centers for Medicare and Medicaid Services (CMS) is encouraging states to address difficult implementation questions, how states are approaching definitions and reporting, and what lessons can be learned from their unwinding experiences. MACPAC staff agreed that they will expand their research to include these items.

The conversation also touched on program design and oversight. Commissioners asked about how states handle job-based training, with staff emphasizing that approaches differ across demonstrations. They also explored the mechanisms available for implementation, such as state plan amendments, and whether the statute provides clear guidance on how these plans should be carried out. Commissioners inquired about state investments relative to enrollment levels, available data sources to evaluate the impact of work requirements, and the specifics of postpartum eligibility, which staff noted typically reflects state policy and can extend up to 12 months. Finally, there was interest in whether 1115 waivers remain part of the pathway and concerns that the 90-day window for compliance may be overly aggressive.

PANEL ON WORK AND COMMUNITY ENGAGEMENT REQUIREMENTS IN MEDICAID

MACPAC next convened a panel on Work and Community Engagement (WCE) requirements. Jennifer Strohecker, Integrated Healthcare Division and Medicaid Director of Utah Department of Health and Human Services, opened by urging a beneficiary-first approach: start with the individual who qualifies for Medicaid and map the specific barriers that keep them from accessing or keeping coverage—especially those living with chronic conditions. She described building an internal project team aligned on budget, activities, and evaluation, beginning early outreach so stakeholders can engage alongside federal partners, and designing processes that minimize gaps and churn. Melisa Byrd, Senior Deputy Director and Medicaid Director, District of Columbia Department of Health Care Finance, emphasized that currently not all states are subject to WCE, therefore, some need clear guidance on what counts as compliant. She also noted that D.C. is actively planning for work-related requirements outside the reconciliation bill framework, while broader policy discussions continue.

Operational lessons featured prominently. Using Georgia as a case example, panelists said applicants interact through the Gateway system; the biggest friction was not the work requirement itself but rural connectivity and document-upload challenges—phones and bandwidth, which often blocked compliance. Self-employment was recognized as an allowable pathway, and the program served as a test bed for clarifying which payment/verification systems would be used. Turning to implementation mechanics, Jessica Kahn, Partner of McKinsey & Company, explained that exemptions drive complex “business rules” and logic: states must decide the hierarchy of checks—what gets verified first, with what data, and how conflicts are resolved—because each exemption can touch multiple modules. Deanna Williams, Enrollment Assister at Georgians for a Healthy Future, argued for robust in-person and virtual support centers so beneficiaries can complete applications and troubleshooting without losing coverage.

Commissioners had a range of questions that centered around governance, data, and capacity. One commissioner flagged data-privacy concerns, particularly if states contemplate pulling payroll tax. Another asked whether states are exploring performance or integrity indicators to monitor WCE implementation quality and detect problems early. A commissioner highlighted that Medicaid directors bring significant operational capacity but asked what specific capabilities are most needed now; Ms. Strohecker answered by urging states to build internal muscle rather than default to outside consultants and to be candid about what they must say no to given limited resources. Other questions included requesting clear escalation pathways to prevent beneficiary issues from languishing at the help desk tier and advocating for rigorous cost–benefit analysis to ensure the administrative complexity of WCE yields measurable coverage stability, employment connection, or other outcomes that justify the investment.

MEDICAID PAYMENT POLICIES TO SUPPORT THE HOME- AND COMMUNITY-BASED SERVICES WORKFORCE (HCBS)

MACPAC staff next turned their attention to Medicaid payment policies to support the HCBS workforce. They highlighted the central role of wage data in setting rates that sustain an adequate direct care workforce. States typically rely on Bureau of Labor Statistics (BLS) data, but these measures are not specific to Medicaid and exclude many HCBS worker types, forcing states to blend or supplement data. The new CMS “Ensuring Access” rule will require states to publish average HCBS payment rates (starting 2026) and report compensation percentages (starting 2028), but it does not require reporting of wage levels nor make the data public, leaving major gaps for states trying to benchmark and plan.

MACPAC staff presented a draft recommendation calling to require CMS to collect and publish biannual, service-specific hourly wage data (personal care, home health aide, homemaker, habilitation), disaggregated by worker type and geography. Publishing descriptive statistics like mean, median, and range would give states more robust, comparable data to set rates, while building on existing access rule reporting to minimize new burdens. recommendation notes this would have no federal budget impact, require only marginal additional effort from states and providers, and could strengthen HCBS workforce recruitment and access to services over time. A vote on the recommendation is scheduled for October 2025, draft chapter for the March 2026 report to Congress to follow.

During the discussion, commissioners pressed staff on how Medicaid wage reporting for the HCBS workforce should be structured. Some asked whether family caregivers paid through self-direction programs would be included, and staff explained that it would depend on what each program requires states to report. Others raised concerns about the clarity of the recommendation’s language, suggesting changes such as removing the “biannual” requirement and replacing “mean, median, and range” with more flexible terminology like “average.” Questions also emerged about whether the Secretary of the Department of Health and Human Services (HHS) could simply refine or expand the existing CMS access rule reporting requirements rather than duplicating them, with some commissioners expressing unease about states potentially needing to shoulder higher rates as a result.

Several commissioners emphasized that building on the access rule was the intent, ensuring consistency rather than creating new burdens. There was debate over the value of collecting and publishing only averages versus providing a fuller distribution of wage data, with supporters arguing that median and range figures give a more accurate picture of workforce realities. Commissioners also asked about the frequency of data collection, weighing the benefit of annual versus biannual reporting if states are already gathering similar information. Overall, the conversation reflected broad support for improving wage transparency but lingering disagreements about the best language, frequency, and level of detail to include in MACPAC’s recommendation.

On September 19, 2025, the Medicaid and CHIP Advisory Commission (MACPAC) met for the second day of its September session, focusing on key takeaways from the implementation of the enhanced federal medical assistance percentage (FMAP) for home- and community-based services (HCBS) under the American Rescue Plan Act (ARPA), as well as issues related to the Medicare Medicaid transition.

IMPLEMENTATION OF INCREASED FMAP FOR HCBS UNDER THE ARPA: KEY TAKEAWAYS

MACPAC staff reviewed how states used the temporary 10 percent FMAP increase authorized under the ARPA. Research found the enhanced match, available from April 2021 through March 2022, was intended to supplement—not supplant—state spending and required states to invest in activities that enhanced, expanded, or strengthened HCBS. Together, federal and state dollars generated an estimated $37 billion for reinvestment through the FMAP increase. CMS oversaw the initiative through guidance letters, required quarterly spending plans, and semi-annual progress reports. While the funds were initially set to expire in March 2024, spending deadlines were extended to March 2025, with about half of states receiving further extensions into 2026.

MACPAC staff reported that most states directed their funds toward HCBS workforce initiatives, including recruitment, retention, and training, with additional investments in quality improvement, reducing waiting lists, and cross-system partnerships. However, states faced significant challenges with timing, as they had only a short window to develop and submit spending plans, making robust stakeholder engagement and planning difficult. Administrative hurdles, such as hiring staff and making waiver or plan amendments, further constrained implementation. Evaluation was also limited, as the law did not require comprehensive assessments of funded activities, and states often lacked capacity, data, or time to measure outcomes. Another large concern was sustainability: although two-thirds of states included some plans to maintain activities beyond the funding period, only about one-third of workforce-related initiatives appear likely to be sustained. In many cases, funds were used for temporary relief or stopgap measures rather than long-term system improvements. The next steps include publishing an issue brief that summarizes the monitoring activities and the lessons learned to date.

MEDICARE-MEDICAID PLAN TRANSITION

MACPAC staff next outlined progress and challenges in shifting from the Financial Alignment Initiative (FAI) demonstration’s Medicare-Medicaid Plans (MMPs) to integrated Dual Eligible Special Needs Plans (D-SNPs) in states where FAI ends in 2025 (including IL, MA, MI, NY, OH, RI, SC, TX). Most states have completed procurements and are set to transition to D-SNPs by January 1, 2026. States reported that while procurement was complex—often delayed by bid protests or misaligned state and Medicare Advantage timelines—they are largely confident in their ability to meet the transition. In terms of enrollment and IT changes, the transition entails moving from broker-based enrollment to a process in which the D-SNP handles Medicare enrollment while the state handles Medicaid. This shift introduces potential for timing mismatches, which states are addressing via system updates and coordination to avoid enrollment lags. Stakeholder engagement is also a focus, and states are actively communicating with beneficiaries, plans, and advocates. States are also developing guidance and limiting unnecessary notices to reduce confusion. MACPAC’s next step is to continue monitoring how states manage these shifts to identifier systems, deployment of new policies, beneficiary communication, and operational readiness.

Commissioner discussion highlighted significant concerns about the transition from MMPs to integrated D-SNPs. Commissioners noted the daunting nature of the process for dual eligibles, raising questions about whether the integrity of D-SNPs will hold up and whether plans may push back against integration efforts. They emphasized the complexity of aligning CMS, Medicare, and Medicaid requirements, cautioning that this transition poses larger systemic challenges. Continuity of care also emerged as a key issue, with worries about how many beneficiaries may lose access to their providers or benefits, and how disruptive the shift might feel for enrollees accustomed to the current model. While some elements of the transition are still in flux, commissioners underscored the importance of maintaining a strong focus on consumer experience, tracking outcomes, and ensuring that both Medicaid and CHIP programs continue to play their critical roles in meeting the needs of vulnerable populations.

On September 5, 2025, the Medicare Payment Advisory Commission (MedPAC) convened for the second day of its September meeting. Staff presented findings on the relationship between shifts in Medicare Advantage (MA) enrollment and hospital finances. Commissioners responded positively to the analysis and offered suggestions to strengthen and expand the research.

Association Between Changes in MA Enrollment and Hospital Finances

MedPAC staff examined how rising MA enrollment is affecting hospitals’ finances. Between 2014 and 2025, MA enrollment grew from 31% to 55% of Medicare beneficiaries, driven by beneficiary preferences for added benefits and employer retiree coverage shifts. Hospitals have expressed concern that MA patients often generate lower payment-to-cost ratios than fee-for-service (FFS) patients, and MA plans actively use tools like prior authorization and narrow networks to manage utilization, which can reduce hospital volumes or shift care to lower-paid settings. Additionally, MA plans negotiate rates, downgrade admissions, and deny claims in ways that can reduce hospital revenue.

Using 2013–2023 cost report data, MedPAC found that higher MA penetration is not significantly associated with changes in hospital profit margins, but it is linked to declines in both revenues and costs (about 1.3% and 1.2% for every 10-percentage-point increase in MA penetration). Effects differ by ownership: financially integrated hospitals did not experience significant revenue or cost declines, while non-integrated hospitals did. Critical Access Hospitals saw no statistically significant effects, partly due to cost-based reimbursement and MA per diem structures. Another emerging issue is uncompensated care (UC) payments—because MA plans often mirror FFS add-ons, a decline in FFS discharges raises the UC payment per discharge, potentially increasing hospitals’ UC payments as MA grows.

Overall, the findings suggest that MA growth shifts financial dynamics but does not broadly erode hospital profit margins, with effects moderated by whether hospitals are integrated with MA plans. Policymakers may need to consider integration differences and downstream effects on FFS-related payments when evaluating MA’s hospital impact.

Commissioner Discussion

The Commissioners’ discussion focused on the financial and operational impacts of MA growth on hospitals, with particular attention to integration, utilization management, and methodological considerations. Several Commissioners raised questions about how new services and prior authorization denials affect hospital operations, emphasizing that, while hospitals often maintain profit margins, they must divert resources to manage administrative burdens. Concerns were also raised about retiree health plan enrollees in MA, the role of broker incentives, and whether beneficiaries and taxpayers are truly getting value for money under the current system.

Others highlighted the importance of examining differences between financially integrated and nonintegrated hospitals, noting the leverage and pricing differentials created by integration. Commissioners suggested expanding the analysis to include dollar amounts, stratifications based on MA market characteristics, and thresholds in penetration levels. They also encouraged looking at other sectors, such as post-acute care and skilled nursing facilities, where effects may differ. There was recognition that hospitals owning MA plans tend to be larger and structurally different, and that regional market dynamics and timing of MA penetration may produce varying effects. Overall, while the analysis was well received, Commissioners urged refinement with more current data, stratified analyses, and a clearer picture of how MA growth translates into real-world financial pressures and adaptations by providers.

On September 3, 2025, the House Energy and Commerce Health Subcommittee held a hearing on advancing health care through artificial intelligence (AI). Discussion included the potential applications of AI in prior authorization, rural health care delivery, and the pharmacy sector. Members of both parties agreed that AI holds promise for improving efficiency and access in the health care system. However, they emphasized that human oversight remains essential to address errors and ensure patient safety.

Opening Statements

• Health Subcommittee Chairman Morgan Griffith (R-VA-09)
• Ranking Member Frank Pallone (D-NJ-6)

Witness Testimony

• TJ Parker, Leader Investor, General Medicine – Testimony
• Andrew Toy, Chief Executive Officer, Clover Health – Testimony
• Dr. Andrew Ibrahim, MD, MSc, Chief Clinical Officer, Viz.ai – Testimony
• Dr. Michelle Mello, JD, PhD, MPhil, Professor of Law, Stanford Law School, and Professor of Health Policy, Stanford University School of Medicine – Testimony
• Dr. C. Vaile Wright, PhD, Senior Director, Health Care Innovation, American Psychological Association – Testimony

Member Discussion

Prior Authorization

During the hearing, Ranking Member Frank Pallone (D-NJ) underscored his concern that AI could embed and even magnify existing biases in prior authorization systems if Congress does not establish sufficient guardrails. He recalled that, under the Trump administration there were efforts to incorporate AI into prior authorization processes and warned that, if left unchecked, such initiatives could lead to higher denial rates for Medicare and Medicare Advantage beneficiaries. Rep. Pallone asked how policymakers could ensure AI is deployed in a way that enhances patient care rather than creating new barriers to access. Dr. Mello responded that prior authorization is already a system with high denial rates and significant flaws. She explained that layering AI onto a broken process risks simply “amping up” existing problems rather than fixing them. According to Dr. Mello, the central question is whether AI will serve as a corrective tool that streamlines care or whether it will exacerbate inequities and inefficiencies—something policymakers and regulators cannot yet answer with certainty.

Rep. John Joyce (R-PA-13) built on these concerns, noting that he has already heard from physicians in his congressional district who report that AI-based systems are increasing denial rates, particularly within Medicare Advantage. Rep. Joyce argued that AI should only be used as a supportive tool to assist clinical decision-making, and never as the final determinant of coverage. He called for Congress to establish clear guardrails that preserve physicians’ ability to make patient-centered judgments and protect beneficiaries from automated denials. Dr. Toy sought to reassure the subcommittee, testifying that his organization does not use AI in prior authorization decisions and stated unequivocally that AI should never be deployed to deny care. Instead, Toy emphasized that AI’s proper role is to help clinicians deliver services more efficiently, reduce administrative burdens, and ultimately improve patient outcomes.

Finally, Rep. Lizzie Fletcher (D-TX-7) questioned whether the current statutory framework is adequate to govern prior authorization in an era where AI tools are increasingly being integrated into health care. Dr. Mello was direct in her response: the existing legal framework is not sufficient. She argued that without updated oversight and regulation, patients and providers will remain vulnerable to harm, underscoring the need for congressional action to modernize policies around AI and prior authorization.

Rural Health Care

The hearing also explored how AI could support care at rural hospitals and the communities they serve. Chairman Morgan Griffith (R-VA-09) opened the discussion by asking what type of software is needed to bring AI into rural settings and whether such systems are prohibitively expensive. Dr. Toy explained that, while the cost of infrastructure is indeed higher in rural areas, smaller towns can sometimes deploy new systems more quickly, enabling AI solutions to reach patients faster than in large, complex urban health systems.

Rep. John Joyce (R-PA-13) pressed further, questioning whether rural hospitals have a stable environment to invest in new technologies. Dr. Mello acknowledged that most do not, noting that rural facilities often operate with razor-thin margins and require outside assistance to adopt advanced tools. She pointed out that certain technologies, such as radiation tools, have shown promise when paired with AI but emphasized that these opportunities are largely out of reach without federal support. Dr. Ibrahim added that some of the most impactful research on stroke care has been conducted in rural areas, underscoring the potential for innovation outside urban centers. However, he cautioned that reimbursement remains a decisive factor: hospitals are unlikely to invest in AI if payment models do not recognize and support its use.

Rep. Troy Balderson (R-OH-12) asked what steps Congress could take to support wider adoption of AI in rural health care. Witnesses highlighted the need for stronger reimbursement policies, targeted grant funding, and infrastructure investments to give rural hospitals a stable base for innovation. Rep. Kat Cammack (R-FL-03) shifted the focus to physician training, asking how AI could play a role in preparing doctors for practice in rural communities. Dr. Ibrahim responded that rural hospitals are already positioned to serve as training hubs and could leverage AI to expand education and mentorship opportunities for providers who might otherwise face isolation. Dr. Toy stressed the importance of connectivity. He argued that something as simple as linking patients and providers through consumer-friendly devices, like iPads, could make a significant difference in overcoming geographic barriers. In his view, AI is not just about cutting-edge algorithms but also about creating practical tools that connect people and care in underserved areas.

Pharmacy and Drug Development

Rep. Diana Harshbarger (R-TN-01) asked how AI could reshape the pharmacy sector. Mr. Parker answered that AI offers significant opportunities for pharmacists, particularly by applying advanced logic to streamline workflows and build stronger infrastructure for dispensing, monitoring, and counseling. When Rep. Harshbarger pressed further on rural challenges, Dr. Toy observed that limited coordination between pharmacists and physicians remains a barrier in these settings. He argued that AI should be leveraged to strengthen collaboration across the care team to ensure patients in rural areas receive consistent, high-quality services.

Rep. Troy Balderson (R-OH-20) noted that a lack of coordinated care often prevents providers from catching early warning signs of health complications. Dr. Toy responded that a stronger AI-enabled health care ecosystem could close these gaps, with pharmacies playing a central role in connecting patients to the broader system.

Rep. Buddy Carter (R-GA-01) broadened the discussion to the scale of the U.S. pharmacy system, asking how AI could improve services across such a vast network. Mr. Parker explained that AI has the potential to collect and synthesize full historical patient records, giving pharmacists a more comprehensive view of patient needs. Rep. Carter then asked about drug development, and Dr. Ibrahim emphasized that AI excels at detecting data patterns, which can accelerate the identification of promising compounds and support more efficient clinical trials.

On September 4, 2025, the Senate Finance Committee held a hearing on the President’s 2026 health care agenda. Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. (RFK) testified to the committee. Democrats along with moderate Republicans raised concerns regarding vaccine mandates and guidelines while conservative Republicans applauded Sec. Kennedy’s actions addressing the chronic disease epidemic and the Rural Health Transformation Fund that was produced from the One Big Beautiful Bill Act.  

 Opening Statements  

• Chairman Mike Crapo (R-ID)  

• Ranking Member Ron Wyden (D-OR) 

Witness Testimony  

• HHS Sec. Robert F. Kennedy Jr.  

Member Discussion  

Vaccines  

During the hearing, several senators pressed Sec. Kennedy on his vaccine policies and his broader approach to science and trust in public health. Sen. Michael Bennet (D-CO) highlighted that in June, Kennedy dismissed the entire federal vaccine advisory panel and challenged him on whether he truly believed one of the replacement doctors who publicly claimed that mRNA vaccines cause HIV. Kennedy defended his decision, stating the doctor he appointed has done the research.  

Sen. Bill Cassidy (R-LA) continued the line of questioning, pointing out that Kennedy had just told Sen. Bennet that the COVID-19 vaccine had killed more people than the virus itself. Sen. Cassidy noted

Kennedy’s role as a lead attorney in multiple lawsuits restricting access to COVID-19 vaccines and criticized his cancellation of $500 million in federal contracts tied to mRNA technology. Sec. Kennedy responded by praising Operation Warp Speed as a genius initiative that succeeded by delivering vaccines quickly without mandates, but he doubled down on his opposition to later vaccine requirements and contracts that, in his view, entrenched mRNA technology in federal policy. Sen. Cassidy pressed further on Kennedy’s stated commitment to avoid conflicts of interest within health agencies, pointing out that many of the individuals Kennedy has nominated for awards or advisory roles have received revenue as paid witnesses in lawsuits against vaccine manufacturers. Sec. Kennedy countered that such arrangements inherently create conflicts, arguing that “if we put people who are paid witnesses on suing vaccines, it is a conflict of interest.” Sen. Cassidy also reminded Kennedy that he had previously promised not to take vaccines away from the public, yet his policies have placed restrictions on COVID-19 vaccine use. 

Sen. John Barrasso (R-WY) stated unequivocally that vaccines have saved 54 million lives and that he personally supports their continued use. He reminded Sec. Kennedy of his promise to uphold scientific standards in federal vaccine policy and expressed concern about the Secretary’s repeated skepticism. Sen. Barrasso pressed Kennedy to explain how he would ensure vaccine policy remains “clean and trustworthy.” Kennedy replied that children are currently receiving too many vaccines that, in his view, “have not even been tested,” suggesting that the administration would focus on reevaluating the pediatric vaccine schedule rather than endorsing it wholesale. 

Sen. Maria Cantwell (D-WA) added to the critique, accusing Kennedy of undermining public trust in science by refusing to accept mRNA technology as legitimate. Kennedy believes that it has not undergone sufficient study.  

Rural Health and Hospital Financing  

Senators also focused heavily on the state of rural health care and hospital financing. Chairman Mike Crapo (R-ID) pointed to the inclusion of the Rural Health Transformation Fund in the One Big Beautiful Bill (OBBB), asking Secretary Kennedy to comment on its purpose and implementation. Kennedy framed the fund as a fulfillment of former President Trump’s campaign promise, describing it as a response to what he called a “crisis in rural health.” He noted that rural communities not only depend on hospitals for care but also for some of the highest-paying jobs in their regions, making the stability of these institutions vital to both health and local economies. Kennedy added that the administration has already directed roughly half of the fund’s investments into targeted rural initiatives.  

Sen. Mark Warner (D-VA), however, raised concerns that despite these commitments, rural hospitals remain at risk of closure, particularly in the face of projected Medicaid cuts. He asked Kennedy whether he would support legislation to raise the area wage index floor to 80%, a measure intended to level reimbursement rates for rural hospitals and prevent destabilization. Kennedy responded that President Trump supports the wage index change, indicating alignment with congressional efforts to preserve rural hospital viability. 

PBM Reform

Sen. James Lankford (R-OK) raised concerns that Medicare Advantage plans are withholding payments and asked Sec. Kennedy what actions HHS is taking to address pharmacy benefit managers (PBM) practices. Kennedy emphasized that PBM reform is a top priority for the president, noting that the administration is in active discussions with both PBMs and pharmaceutical companies to pursue meaningful changes. He underscored the administration’s intent to create a fairer system that does not disadvantage pharmacies, particularly in rural areas. 

Sen. Catherine Cortez Masto (D-NV) shifted the focus to the direct impact on patients, asking Kennedy how much Medicare Part D enrollees should expect to pay for their prescription drugs in the coming year and what the projected premium increases would be. Kennedy acknowledged that these details remain unsettled, conceding that the administration does not yet have definitive numbers. His response suggested ongoing debate within the administration and Congress over how costs will be shared between the federal government, insurers, and beneficiaries. 

Sen. Marsha Blackburn (R-TN) reinforced the bipartisan concern about PBM practices by pointing to the PBM Act, which she and Ranking Member Ron Wyden (D-OR) co-authored, and highlighted its role in keeping rural pharmacies from shutting down. She asked Kennedy to confirm whether this legislation would reach President Trump’s desk for signature. Kennedy assured her that it would, signaling alignment between the administration and Congress on moving PBM reform forward.

Other Topics in the Discussion 

• Sen. Cantwell asked whether Sec. Kennedy supported maintaining the Affordable Care Act’s Advance Premium Tax Credits (APTCs), which are scheduled to expire. Kennedy responded that Democrats had failed to make the APTCs permanent, and while he supports fixing the system, his focus is on lowering premiums more broadly rather than extending temporary relief. 

• Sen. David Daines (R-MT) asked if HHS would consider Montana’s waiver to expand Medicaid with work requirements for able-bodied adults. Kennedy said yes. 

• Multiple Democrats asked about the decision to fire the CDC Director, Susan Monarez. 

• Sen. Blackburn asked about CMS’s new interoperability framework and how it aligns with existing frameworks. Kennedy admitted alignment is still uncertain. 
• Sen. Sheldon Whitehouse (D-RI) raised the “two-midnight” hospital stay requirement before patients qualify for skilled nursing care. Kennedy offered to work with senators directly on the issue.