An eventful period for healthcare policy looms as Trump and GOP members of Congress prepare to govern

Note: For information on the healthcare policy agenda for the final two months of the current Congress, see the sidebar at the bottom of this page.

The results of the 2024 federal elections give President-elect Donald Trump and congressional Republicans an opportunity to leave an imprint on healthcare policy over the next two years.

With Trump returning to the White House and the GOP controlling both chambers of Congress, policy experts foresee a coordinated agenda for changes that range from headline-grabbing, consumer-facing updates to technical yet meaningful shifts in the regulatory framework. The first few months of 2025 should be especially busy if Republicans seek to use the budget reconciliation process to bypass the need for a 60-vote supermajority in the Senate.

A wild card was introduced Nov. 14 with the announcement that Trump was nominating Robert F. Kennedy Jr. as secretary of HHS. If confirmed by the Senate, Kennedy would bring his unorthodox views to a position that oversees the entire U.S. health and healthcare infrastructure.

Kennedy’s positions on public health — including the nation’s food and water supply and policies around vaccination — have drawn most of the headlines and have potential consequences for agencies such as the Centers for Disease Control and Prevention, the Food and Drug Administration and the National Institutes of Health. How his proposals would play out at CMS and affect healthcare providers is less clear.

Given his stated intent to address chronic conditions, analysts have speculated that Kennedy would emphasize payment models in which government and private insurers cover healthy eating (a policy known as “food is medicine”) and exercise. With Republicans expected to try to suppress federal spending, incorporation of such models could entail a zero-sum game wherein payments for acute care are further constrained.

Hospital-centric provisions

Potential legislative and regulatory changes with direct implications for hospitals in 2025 could affect the 340B Drug Pricing Program, site-neutral payment and price transparency.

Under the Biden administration, HHS and the Health Resources and Services Administration have backed providers in disputes with drug manufacturers over 340B issues such as restrictions on the discounts for drugs furnished through contract pharmacies. It is unclear whether HHS under Kennedy will adopt the same position.

Regardless, passage of Republican-sponsored legislation to enhance oversight and transparency within the program is a good bet, said Shawn Stack, director of perspectives and analysis for HFMA.

In addition to being viewed as sound policy by members of Congress on both sides of the aisle, the prospective savings from expanded site-neutral payment are seen as a way to help cover the costs of Republican-favored policy initiatives such as an extension of Trump’s tax cuts. The Congressional Budget Office (CBO) previously estimated savings would exceed $140 billion over 10 years from a two-pronged approach of implementing site-neutral payment for all services at off-campus hospital outpatient departments and for certain ambulatory payment classifications at on-campus departments.

Healthcare pricing transparency likely would ramp up in the next Congress regardless of the election outcome. Enforcement could be expanded to assess the accuracy of the pricing information presented, as recently recommended in a report to Congress by the Government Accountability Office.

“I’m almost certain we’re going to see robust and even aggressive focus on price transparency for hospitals,” Stack said.

Private insurance coverage

Trump and Republican majorities in Congress sought to terminate the Affordable Care Act (ACA) in 2017, but their efforts fell short. They may not take another crack at it this time.

However, said Debbie Curtis, a healthcare policy advisor with McDermott+ and previously a Democratic staff member in Congress, “You can do a lot of things that impact the effectiveness of the Affordable Care Act without killing the ACA.”

For example, during Trump’s first administration, CMS promoted short-term, limited-duration health insurance; individual-coverage health reimbursement arrangements; and association health plans as alternatives to mainstream health plans. Trump is expected to restore those regulations for the sake of boosting competition in the individual and small-group insurance markets, and Vice President-elect J.D. Vance has touted a return of high-risk pools that also would maintain protections for people with preexisting conditions.

Perhaps most notably, Republicans will have a chance to pare enhanced subsidies for buying ACA marketplace insurance when those expire at the end of 2025. Subsidies currently ensure that enrollees in benchmark silver plans pay no more than 8.5% of their income in premiums.

The preference on the right is to instead promote coverage through vehicles such as health savings accounts.

 “I don’t think there’s any chance [the subsidies] would look like they do now,” Curtis said. But she also posed the possibility that they could be continued in some form.

Elsewhere, the incoming administration may look to modify a 2024 regulation requiring parity in coverage of behavioral healthcare, said Elizabeth Wroe, a principal with Leavitt Partners and formerly a Republican staff member in the Senate. It also remains to be seen how forcefully Trump’s Department of Justice will try to defend the preventive services coverage mandate for health plans during ongoing litigation, she said.

Government-sponsored coverage

Trump and Republicans are expected to revisit efforts to make Medicaid into more of a block-grant program wherein states receive per capita funding and have leeway to set eligibility criteria and other parameters. Alternatively, they may settle for retaining the traditional federal-state partnership but phasing in stricter work requirements for beneficiaries.

Any scaling down of Medicaid funding could exacerbate clinical workforce shortages. Such policies could make it “harder to get the workforce to show up to serve these populations,” said John Barkett, managing director with BRG and formerly a senior policy advisor in the Biden administration. “That’s typically not what is discussed when these policies are discussed.”

In Medicare, Republicans will be leery of changes that directly affect out-of-pocket costs for beneficiaries, said Rodney Whitlock, PhD, a healthcare advisor with McDermott+ and formerly a Republican staff member in Congress. But the GOP would be more amenable to policies such as site-neutral payment even in the face of possible Democratic criticism that the policy amounts to Medicare cost-cutting, Whitlock said.

Curtis said steps to rein in Medicare Advantage (MA) spending would have been under consideration regardless of the election outcome. While trimming payments to MA health plans could lead to reduced provider payments and possible healthcare access constraints, proposed changes to aspects such as prior authorization would be more favorable to providers and patients.

Policies to increase the share of Medicare beneficiaries in accountable care arrangements ramped up during the Biden administration and are likely to continue in some form, said Andrea Maresca, managing director for information services with Health Management Associates.

 “[Look for] the same policy framework or the same policy concept, but possibly some changes in the details and the methodologies in how value is calculated or considered,” she said.

Regulatory rollbacks

Language to prohibit the reporting of consumer medical debt to credit-reporting agencies proved contentious in the hospital collections industry when proposed this past summer by the Consumer Financial Protection Bureau and formalized in an October advisory opinion. The regulations are the subject of litigation brought by the collections trade group ACA International.

An override of those regulations “is probably more likely now than it would have been if the White House hadn’t flipped,” Stack said.

Trump almost certainly will cancel 2023 regulations establishing mandatory staffing ratios for skilled nursing facilities, Curtis said. Congress could seek to apply the resulting savings to a long-term Medicare physician payment boost.

Fraud enforcement via regulations set by the False Claims Act, Stark Law and Anti-Kickback Statute may be applied less rigorously in the next administration.

“We could possibly see more regulatory flexibility and looser standards for enforcement,” said Tom O’Neil, managing director with BRG and formerly chief compliance officer at Cigna.

The environment for mergers and acquisitions should be more permissible under Trump’s Federal Trade Commission, although it remains to be seen whether that applies to private-equity interests, which have faced skepticism from both sides of the aisle in Congress.

But in general terms, Stack said, “The Trump administration is likely to be a little more lenient on antitrust oversight.”

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The lame-duck session has a packed agenda

The final two months of the 118th Congress feature a long list of healthcare policy items — and little time to act on them.

Only about five weeks remained on the legislative calendar after the election, and disaster funding and the National Defense Authorization Act loomed as the most immediate priorities.

That was expected to leave a few weeks to pass either an FY25 budget or, most likely, a continuing resolution before federal funding expires Dec. 20.

Chances are a few healthcare provisions will be incorporated in any such bill, including extensions of Medicare telehealth waivers, a delay of an $8 billion cut to 2025 Medicaid disproportionate share hospital (DSH) payments and extensions of supplemental payments for low-volume hospitals and Medicare-dependent hospitals. Partial relief for scheduled Medicare payment cuts to physicians is another probable area of focus, with a more permanent fix for the payment system potentially on the docket next year.

Less certain, but viable, are year-end provisions extending the acute care hospital-at-home waiver, asserting more oversight of pharmacy benefit managers and strengthening price transparency requirements, said Debbie Curtis of McDermott+.

Whether those get done may depend on the signals received by House Republicans from President-elect Donald Trump, she said. If he prefers “to clear the decks for 2025” to focus on his broader agenda, the final bills passed by the current Congress could be more robust.

Hospitals’ wish list

The American Hospital Association (AHA) sent a letter on Nov. 12 to House and Senate leaders with requests for the next two months.

Atop the AHA’s priorities are avoiding Medicaid DSH payment cuts, extending hospital supplemental payments, rejecting site-neutral payment proposals and passing proposed legislation that would streamline prior authorization in Medicare Advantage (which also could be accomplished through final regulations scheduled to take effect in 2026).

The AHA also called for Congress to make Medicare telehealth waivers permanent, extend the expiring hospital-at-home waiver for five years, mitigate the 2025 physician payment cuts and pass drafted legislation to establish federal protections from workplace violence for hospital personnel.