The Week Ahead

The markups of the House Energy and Commerce, Ways and Means, and Agriculture Committees have been delayed, but there’s still plenty to talk about with the President’s proposed “skinny budget” for fiscal year 2026. So, let’s get into it. Welcome to the Week Ahead!  

The Administration 

President Trump released his “skinny budget” for FY26 on May 2, outlining the White House’s discretionary budget requests. Continuing the theme of reducing government spending, the administration is requesting $33.3B less than was enacted last year for the Department of Health and Human Services (HHS), including cuts for the Health Resources and Services Administration, the Centers for Disease Control and Prevention, and the National Institutes of Health by eliminating and consolidating different programs. 

The “Make America Healthy Again” Commission, which is tasked with implementing HHS Sec. Kennedy’s agenda to tackle chronic disease through the promotion of healthy living and improving the nation’s food quality, has a $500M request. 

But as far as the federal budget process goes, “the president proposes, and Congress disposes.”  Congress will take these requests and consider them during their deliberations on appropriations, a process which is just getting under way.   

The administration is expected to release more details of their budget in the coming weeks.  Those details have been the subject of leaks in the last few weeks. Be on the lookout for the mandatory funding tables and HHS’ budget in brief, both of which highlight what the administration hopes to accomplish via regulation and legislation.   

The Senate  

The budget resolution calls on several Senate committees to submit recommendations to the Senate Budget Committee by May 9.  Based on our conversations with lawmakers, the committees are not hurrying to meet this nonbinding date.  

While the Senate HELP Committee could include health care provisions, they are expected to mirror their House counterpart (Education and Workforce) in focusing on reducing education and spending. And while not tasked with finding savings, the Senate Finance Committee could still wade into health care, whether on health care taxes, Medicaid, or Medicare, all of which would fall under Finance’s jurisdiction. 

Senate Health Care Hearings This Week 

• May 6: Senate Finance Committee nomination hearing to consider James O’Neil to be Deputy HHS Secretary and Gary Andres to be an Assistant Secretary of HHS 

• May 8: Senate HELP Committee nomination hearing for James O’Neil to be Deputy Secretary and Janette Nesheiwat to be Surgeon General  

The House 

House Speaker Mike Johnson (R-LA) continues to push aggressively for reconciliation legislation even as he has acknowledged the delayed target date of July 4 for getting a package to the President’s desk.  

During the listening sessions that House leadership and Energy and Commerce Chair Guthrie (R-KY) held with Republicans last week, the caucus fissures are starting to show.  A growing number of Republicans want a much lower savings target for Medicaid because of the large number of Medicaid enrollees in their district.  Other Republicans are pointing out the futility of making politically vulnerable House members take a vote on Medicaid changes that the Senate is unlikely to agree with.  Yet, some hardliners are pushing for even more spending reductions in Medicaid than what is on the table.   

The House Energy and Commerce bill is likely to include savings related to the Medicaid expansion population (expanded work requirements, bringing down the enhanced federal matching rate) and other policies that Republicans argue are about going after waste, fraud, and abuse (dropping of the provider tax safe harbor and targeting states that provide coverage to undocumented immigrants).  

It’s unlikely the bill will include changes to advanced premium tax credits, Medicare Advantage, or physician payments, with the thought being that there will be time to address those topics in health care legislation down the road.  

It’s important to remember that everything is still very much in flux. Recently, the White House threw another wrench in the plans by suggesting that the reconciliation package should include a “Most Favored Nation” policy to tie federal payments for prescription drugs to the lower costs paid in other countries. This could divide the GOP caucus, as some may see it as price controls.  

House Health Care Hearings This Week 

• May 5: House VA Tech Modernization Subcommittee hearing entitled “Improving Access to External VA Care through Enhanced Scheduling Technology” 

• May 6: House VA Committee markup of pending legislation, including legislation related to health care 

There You Have It 

Did you know that Anna Jarvis, the person who founded Mother’s Day in the US and around the world, tried unsuccessfully in the 1940s to cancel the legal holiday because she felt the day has succumbed to commercial and ideological distortion?  Make it a great week!  

We barely had the chance to see the cherry blossoms with all the activity going on in DC!  House Republican leaders are seeking to move quickly on the compromise budget resolution that the Senate passed over the weekend, so work can begin on reconciliation legislation. Meanwhile, the administration is making moves on Medicare Advantage and Medicare Part D.  So, with that, let’s get into it. Welcome to the Week Ahead!  

The Administration 

The Centers for Medicare and Medicaid Services released its contract year 2026 Medicare Advantage and Part D final rule within 24 hours of CMS Administrator Oz being confirmed.  Ironically, the final rule removes a provision from the Biden administration to expand Medicare coverage of GLP-1s, the obesity drugs of which Administrator Oz has been a proponent. 

Speaking of rules, we are still waiting on the 5 calendar year payment rules, still under review at the Office of Management and Budget.  

And don’t forget that Federal agency heads have until April 19 to submit deregulation plans in accordance with a February 19 Executive Order. We could see several health care regulations rolled back as part of this effort, including the nursing home staffing mandate and the Medicaid Managed Care Access rule implemented by the Biden administration.  But Congressional Republicans have their eye on repealing the nursing home staffing rule to count toward their budget reconciliation savings goals. 

The Senate  

Despite impassioned arguments that the resolution would cut Medicaid and Medicare, and several votes on the subject, the Senate passed the compromise budget with only two Republicans, Sens. Collins (R-ME) and Paul (R-KY), voting against the bill. Movin’ on. 

A couple key takeaways:  Republicans passed an amendment with language they say will keep President Trump’s promise for no cuts in “patient benefits” for those on Medicare and Medicaid.  Senate Democrats countered that the language was too vague to be of value.   

Sen. Collins (R-ME) consistently voted for Democratic amendments related to Medicaid and Medicare and voted against the final budget. Sens. Murkowski (R-AK) and Hawley (R-MO) joined her in supporting many of these amendments, but in the end, they came home and voted yes on the budget.   

How should we interpret that Hawley cosponsored the Sen. Ron Wyden (D-OR) amendment to strike the $880B savings directive to the House Energy and Commerce Committee?  He’s paying close attention to Medicaid and Medicare in this bill; that’s all we can say for sure for now.  

Looking ahead: The Senate Committee on Health, Education, Labor, and Pensions (HELP) plans to markup S.932, Give Kids a Chance Act, which would reauthorize the rare pediatric disease priority review voucher program at the Food and Drug Administration (FDA) and gives the agency more authorities regarding molecularly targeted drugs.  

The House  

House Republican leadership wasted no time after the Senate passed its amended version of the budget resolution, sending a letter to their caucus saying they plan to vote on the budget resolution the week of April 7.  

However, a lot still needs to happen before President Trump can sign his “big beautiful bill.” First, House Republican leadership will need to pass the amended budget resolution through the narrowly divided House. Only then can the door be unlocked for Republicans to pass a reconciliation bill that President Trump can sign. And as arduous as passing a budget resolution can be, it pales in comparison to the work of getting a final reconciliation bill passed. Especially one that will satisfy deficit hawks looking for large spending cuts and members who are wary of how said cuts will impact their constituents. We are already hearing about dissatisfaction from a significant number of House Republicans about the Senate version of the budget resolution, which complicates an already complicated situation.  

House Health Hearings 

• April 8: Ways and Means Health Subcommittee hearing on the biosimilar market 

• April 9: Oversight and Government Reform Committee hearing on the FDA and rooting out illicit products 

• April 9: Appropriations Labor-HHS, and Education Subcommittee public witness day hearing  

There You Have It 

We’ve reached the final night of “the big dance,” with two teams facing off tonight in Texas for the championship. Who are you rooting for? Let us know. Make it a great week!  

We’re in a three-week push to see where Republicans land on uniting behind an ambitious budget and setting up reconciliation.  Yes, the Senate is working on getting the nominees for FDA, NIH, and CMS through the confirmation process, but the real focus of health care policy right now is behind the scenes on reconciliation.  What key decisions do Republicans need to make?  Let’s get into it – welcome to the Week Ahead! 

One Bill or Two 

Didn’t they already decide it’s going to be one bill?  Well, not exactly.  The Senate budget sets up 2 reconciliation bills and the House sets up 1 bill.  For now, Republicans are strategizing around creating one massive reconciliation bill given President Trump’s endorsement of “one big beautiful bill,” and Speaker Mike Johnson’s (R-LA) impressive vote maneuvering in February.  It’s nearly April and Republicans want a win.  If things start to fall apart, a two-bill strategy might come back into play. 

How to Treat the Tax Cuts 

One issue Republicans are united on is extending (for as long as they can) the 2017 tax cuts passed under the Tax Cuts and Jobs Act (TCJA).  The question is what cost scoring method to use.  If Republicans choose a current LAW baseline, they have to pay for the tax cuts to the tune of some $4 trillion.  If Republicans choose a current POLICY baseline, they don’t.  Current law means the tax cuts expire at the end of 2025 and any tax cuts after that are “new” and must be paid for.  Current policy means the tax cuts that expire in 2025 are assumed to continue past December 31.  Sound fishy?  Surprisingly, it’s not.  Both parties have used both types of baselines at different times depending on the goals they wanted to achieve at the time. 

How to Treat Spending
The debate over using current law or current policy baselines also affects how the bill could consider increasing in spending.  While not super important to get into right now, Republicans could set up a budget that treats spending differently than what is assumed, making it less expensive on paper to spend money on programs they want to boost. 

What About Medicaid? 

Is the $880 billion over 10 years in the House bill a ceiling and $1 billion in the Senate bill a floor?  Not really.  First, the Senate didn’t touch the tax cuts in their bill, so the Senate position on a dollar amount to cut Medicaid is unknown.   The last major Republican attempt to reduce Medicaid spending in 2005 started as an ambitious $60 or so billion bill and got whittled down to a $10 billion cut.   

Also, on Medicaid, for Republicans, it’s not solely about offsetting other spending or the tax cuts.  While the tax cuts may not have to be paid for because of the budget baseline they choose, Republicans see their majority as an opportunity to address certain issues in Medicaid.  First off is the Biden minimum nurse staffing rule – that one is certainly wiped out in a reconciliation bill.  But that is not the only target – think about programs that states use to increase federal money coming into their coffers like state directed payments, provider taxes, and intergovernmental transfers.    

What About Medicare? 

Isn’t reconciliation just about Medicaid?  Nope, as soon as you bring in the Senate Finance Committee’s jurisdiction into reconciliation, you have Medicare AND Medicaid on the table.  While a lot of attention is being paid to Medicaid changes, expect Medicare changes.  What might they be looking at?  Think the greatest hits of recent Congresses – PBM reform, site-neutrality, Medicare Advantage coding changes, and more.   

Could There Be Health Care Spending? 

Yes, think physician payment reform and the potential of permanent extensions on telehealth.  Don’t forget the advanced premium tax credits that expire at the end of 2025.   If there is one bill, it will definitely be “big.”  Big doesn’t mean a lot of spending – Republicans will want to offset spending in Medicare by reductions in Medicare (or potentially Medicaid, though that’s not been their approach for the last 25 years). 

BUT WAIT… 

Before we get too far ahead of ourselves, remember the Senate and House have to agree on an overall approach to the BUDGET.  The budget is really a set of directions to the committees of jurisdictions to make policy based on a dollar target; the budget is NOT reconciliation.  The Senate and House have to agree to the same budget and then pass it in both chambers before the (health care) committees can put together legislation.  Then, those committees have to pass their reconciliation bills, the Budget committees have to package them up into one reconciliation bill, and then that reconciliation bill has to pass both the Senate and House.   

It’s a gauntlet, ladies and gentlemen. 

What’s the Timeline? 

These three weeks are critical for Republicans to try to coalesce around a BUDGET before they leave for April break.   Can they do it?   It seems ambitious when you can’t lose more than 2 votes in the Senate and only a handful in the House.   Florida’s special elections on April 1 to replace two vacant House seats are likely to grow the House Republican majority.  But it’s one step forward and two steps back for Speaker Johnson, as Rep. Elise Stefanik’s confirmation to be the UN Ambassador will mean a likely Democratic pick-up through a governor appointment.  

There You Have It 

Are you exhausted yet?  You can’t be!  This is the biggest year for health care policy since the Affordable Care Act (ACA).  Where were you during the ACA debate?   Let us know!