The results of the 2024 federal elections signal a significant shift in health policy. With President Trump’s re-election and Republican control of the Senate and House, administrative and legislative actions will attempt to let market forces and innovation address long-standing cost, quality, and access issues. Specific policy details ultimately will depend on who is appointed to key roles within the Department of Health and Human Services (HHS) and CMS. However, based on policy papers from think tanks aligned with President Trump, we can likely expect the health policies of the new Trump administration to be similar to those under his first administration.
Below, we discuss anticipated legislative and regulatory changes in the wake of the election that may impact healthcare organizations’ operations and finances for the remainder of this Congress and the next.
The continuing resolution currently funding the federal government expires on December 20, 2024. With Republicans retaining control of the House, it is likely they will delay major policy changes until the next Congress, when they will control both chambers and the White House. During the lame duck period, healthcare organizations will look to Congress to address key items such as:
Whether Congress passes another continuing resolution for federal fiscal year (FFY) 2025 or a full appropriations package in December, the new year is likely to be challenging for healthcare organizations from a health policy perspective.
Beyond the FFY 2026 budget, there are two “forcing events”—the reinstatement of the statutory limit on the Treasury’s borrowing authority on January 2, 2026 and the expiration of the Tax Cuts and Jobs Act of 2017 (TCJA) on December 31, 2025—that will create opportunities for significant legislative action on health policy issues. The debt limit will likely need to be addressed by summer 2025 at the latest.
To address both, a Republican-controlled House will likely pass a budget resolution with reconciliation instructions.2 This will allow legislation to pass the Senate with a simple majority. Both forcing events will increase the federal debt. Historically, Republicans have been willing to pass tax cuts with limited spending offsets. However, narrow margins in the Senate and House may necessitate offsetting spending cuts to secure the votes of fiscal conservatives, in which case Republicans may look for cuts to Medicaid.
Beyond legislative action, the Trump administration will likely pursue a range of policies intended to increase competition and reduce costs for consumers. These may have a significant impact on healthcare organizations. Below is a summary of regulatory and legislative issues to watch for.
During his campaign, President Trump promised not to extract savings from Medicare and Social Security. This leaves Medicaid as the primary available source of significant healthcare savings should Congress determine offsets are necessary to extend the TCJA or increase the debt ceiling.
Legislative Outlook: Historically, conservatives have supported “block granting” the Medicaid program, which transforms the federal share of Medicaid funding into a fixed amount per enrolled individual, indexed to a measure of general inflation. However, this approach has fallen out of favor in recent years. Instead, attempts to reduce Medicaid spending could focus on rationalizing the enhanced match rate for the ACA expansion population.3 Despite Republican control of both chambers of Congress, this could be difficult to pass given the impact on state budgets.
Further, while the ACA-mandated DSH cuts have been delayed since their enactment, the chance the new Congress will allow them to go into effect in 2026 should not be discounted. While this would not create savings, it would eliminate the need for additional offsets in the 2026 budget.
Administrative Action: CMS likely will provide states additional flexibility to manage costs in their Medicaid programs. Like under the prior Trump administration, we can anticipate openness to work requirements, copayments, and additional scrutiny of eligibility management.
Medicaid supplemental payments also will remain an area of attention. As an example, the Medicaid and CHIP Managed Care, Finance, and Quality rule finalized in April 2024 contains provisions prohibiting separate payment terms and requiring hospitals to attest they did not participate in a hold-harmless funding arrangement. If these provisions are not modified, they could reduce the supplemental payments that support many hospitals. While these provisions are not effective until 2028, it may be more challenging to negotiate the necessary changes to these requirements with the new administration given Republicans’ historical challenges to Medicaid.
Policy changes outside of CMS are likely to impact Medicaid and CHIP coverage as well. During President Trump’s first administration, the Department of Homeland Security finalized a rule that included the use of non-cash benefits such as Medicaid and CHIP as factors that indicate an individual seeking permanent residency in the U.S. is a “public charge,” making it more difficult for them to obtain a green card or temporary visa. While the Biden administration rescinded the rule, the second Trump administration likely will pursue a similar policy, which could have the effect of reducing coverage among certain populations.4
Neither Congress nor the incoming administration appears poised to attempt another repeal of the ACA. However, Congressional action (or inaction) coupled with regulatory changes is anticipated to impact the number of insured and the comprehensiveness of their coverage.
Legislative Outlook: The Biden administration’s American Rescue Plan and Inflation Reduction Act expanded eligibility for exchange subsidies. If the subsidies are allowed to expire at the end of 2025, an estimated 4 million people would lose exchange coverage. Conventional wisdom is these subsidies will be allowed to expire if Republicans control both the House and Senate. However, as Texas, Florida, and other states that have not expanded Medicaid are receiving a higher percentage of these federal funds,5 allowing them to expire may be politically complicated.
Administrative Action: The Biden administration limited the availability of association health plans (AHPs) and short-term limited duration health plans (STLDHPs). Regulations expanding the availability of these product types were issued during the first Trump administration as an alternative to plans offered on the health insurance exchanges and small group market. It is anticipated CMS and the Department of the Treasury under a second Trump administration will take steps to again expand access to AHPs and STLDHPs.6,7,8 STLDHPs may leave individuals underinsured, as they typically provide a fixed dollar amount of coverage per day.
The new administration likely will take additional steps to encourage adoption of individual coverage health reimbursement arrangements (ICHRAs), which allow employers to provide tax-exempt subsidies to workers to purchase exchange plans. This may lead to individuals selecting exchange products with higher cost-sharing and narrower networks to stretch the subsidy from their employers.
In early trading Wednesday, November 6, after the election results were reported, health plans with large MA businesses experienced a bump in share prices.9 This reflects the expectation that MA plans will see a more favorable regulatory environment under the new administration.
Legislative Outlook: Prior authorization reform legislation that mirrors the rule CMS finalized earlier this year is likely to pass Congress.
Think tanks like Heritage Foundation10 and the America First Policy Institute11 have recommended making MA the default enrollment option when an individual ages into Medicare. Beyond being politically difficult given recent concerns some Republicans have expressed about MA plans, this would pose technical challenges related to setting county-level benchmarks, which would need to be resolved prior to implementing this policy.
Administrative Action: Under the new administration, CMS likely will provide more favorable payment updates, overturn changes that reduced star ratings bonuses, and minimize scrutiny of risk coding.
The 340B Drug Pricing Program likely will face continued scrutiny by Congress and the new Trump administration.
Legislative Outlook: While there are several bills introduced in the current Congress that would reform the 340B program, they are unlikely to advance in the near term. While it may take a successful legal challenge to the program by manufacturers to precipitate major Congressional action, it is possible that legislation gains passage requiring 340B hospitals to report additional information related to the program.12
Administrative Action: The Supreme Court overturned the first Trump administration’s Medicare Outpatient Prospective Payment System (OPPS) reimbursement cut for separately payable Part B drugs acquired under the 340B program on grounds that CMS did not follow statutorily required administrative procedures. In Trump’s second term, CMS likely will execute the required survey—as it attempted to do in spring 2020—to calculate the reduction in Medicare payments. Like the prior reduction, these cuts will occur in a budget-neutral manner with the savings used to increase other OPPS payments.
The next Congress likely will expand Medicare site-neutral policies to help pay for other policy priorities and to reduce costs for beneficiaries. Further, CMS may act to encourage migration of care to lower-cost sites of service. Policies expanding site-neutral payments and supporting care delivery in lower-cost settings are widely supported by think tanks aligned with President Trump.13,14
Legislative Outlook: A range of bills expanding Medicare site-neutral payments were introduced in the current Congress. Thus far, hospital advocates have successfully prevented their passage by raising concerns about the impact on access to care in rural and safety net hospitals.
Recently, Sens. Cassidy (R-LA) and Hassan (D-NH) introduced a legislative framework that would greatly expand site-neutral payments and use a portion of the savings to support rural and safety net hospitals. Legislation based on either this framework or one of the existing bills may pass in 2025, as advocates for site-neutral payments have offered an option that attempts to address the most successful argument against the policy. It also has the potential to divide the hospital field, further complicating advocacy efforts.
Beyond Medicare, Congress likely will pass legislation requiring hospitals to include a distinct identifier on claims for services provided in off-campus hospital-based outpatient departments (HOPDs). This will help health plans identify these services and attempt to negotiate lower payment rates when care is provided in an off-campus HOPD.
Administrative Action: Under the first Trump administration, CMS finalized regulations phasing out the Inpatient Only (IPO) list and expanding the Ambulatory Surgical Center (ASC) Covered Procedures list. These policies likely will be reprised in a future rule. Advocates for the policies point to the removal of total knee and hip replacement from the IPO list in 2018 and 2020 as evidence that deregulation reduces cost to the program and beneficiaries.15
Some Republicans view price transparency policies as a core strategy for increasing competition between providers and sites of service.16,17,18 These policies also have garnered support from some Democrats.
Under a second Trump term, CMS and the Center for Medicare and Medicaid Innovation (CMMI) likely will take a similar approach to experimenting with and expanding value-based care as in the first term. This may include creating new or expanding existing models, such as ACO REACH. These models likely will focus on managing populations and providing a vehicle for health plans and other private sector entities to organize care delivery and take on risk for assigned populations of Medicare fee-for-service beneficiaries.
As part of a program to reduce regulatory burden, CMS under the new administration may reverse the SNF staffing ratio rule. If Congress believes the administration is poised to do so, it may take legislative action to create a “pay-for” for other priorities. The Congressional Budget Office has estimated a bill prohibiting CMS from finalizing the staffing ratio rule would save $22 billion.
President Trump’s economic plan for a second term involves levying tariffs ranging between 10% and 20% on imported goods. Imports from China could see tariffs as high as 60% under this plan.19 The proposed tariffs may increase supply and drug costs for providers, which would necessitate reconfiguring supply chains.
Our healthcare professionals at Forvis Mazars are committed to helping healthcare organizations understand and adapt to the impact of evolving federal policies. If you have questions about upcoming policy changes and how they may affect your organization, please reach out to a professional on our team.
