January 21, 2026
Outlook 2026: ACA Marketplace Trends–A Conversation with Michael Cohen and Zach Sherman
1276 Results found.
Analysis of the Costs and Medicaid Payment Adequacy for Ground Ambulance Services in New York State
Survey data from fiscal year (FY) 2022 suggest that entities that provide ground ambulance services in the State of New York are experiencing reimbursement challenges. Health Management Associates, Inc. (HMA), contracted with the United New York Ambulance Network (UNYAN) to conduct an independent study of the costs of delivering ground ambulance services in the state and the adequacy of payment for these critical services. The HMA-UNYAN survey data highlight the wide variation in costs within the ground ambulance industry in New York and the negative Medicaid margins the industry experiences. These data demonstrate that although ambulance entities of all sizes in New York have negative Medicaid margins, these margins worsen as entity size decreases and entities become more rural. Trends in negative margins appear to be linked to some degree to entities’ relative share of “responses without transport” or uncompensated transports. This white paper poses important considerations for policymakers.
Outlook 2026: Rural Health Transformation Program
As we kick off the new year, Health Management Associates (HMA) is launching a new series of brief, insightful interviews with our policy experts on issues that will define 2026—what’s changing, why it matters, and how federal, state, and industry decisions will shape what happens next. Building on our earlier analysis of the Rural Health Transformation Program ((RHTP), here and here), this week, we start with a pointed look at the Centers for Medicare & Medicaid Services’s (CMS) first year of RHTP awards.
Rural Health, Ready or Not: CMS Wants Results in 2026
An interview with Kathleen Nolan, Senior Advisor, HMA, and Sara Singleton, Principal, Leavitt Partners, an HMA Company.
Q: What do the new Rural Health Transformation Program awards tell us about US Department of Health and Human Services (HHS) and CMS priorities heading into 2026?
Kathleen Nolan: One of the clearest signals is that CMS expects visible progress in 2026. This is not a program that gives states months of planning runway. The application made it clear that CMS wants states to start doing the activities they proposed right away—not just planning or propping up existing systems. CMS wants to see meaningful movement on implementation in 2026, especially in the areas of workforce, infrastructure, technology modernization, and care delivery redesign.
Sara Singleton: Exactly, and CMS is using this investment to reinforce some of the administration’s broader policy goals. Many state proposals leaned heavily into chronic disease prevention, chronic care management, and expanding supports that promote healthier lifestyles. That alignment isn’t accidental. The Administration is looking for real traction on these priorities, and RHTP gives states both the resources and the accountability framework to make progress. So, the message from CMS is clear: Move quickly, implement strategically, and show early gains in the areas that matter for long-term population health.
Q: Was anything in the awards themselves surprising?
Singleton: There was a lot of speculation about how wide the spread in funding levels might be, particularly for states’ discretionary initiatives. But the distribution was relatively tight; 32 states fell in the “average” range of $190‒$230 million, with only four states above $230 million and 13 below $190 million. That suggests CMS isn’t signaling dramatic differences in expected performance or ambition.
Nolan: It reinforces that CMS is looking for consistent, measurable progress from every state. States that struggle to implement their plans could see less funding in about years.
Q: What should states keep top of mind heading into year one?
Nolan: Accountability. CMS has made it clear they will adjust budgets in later years if states don’t meet expectations on reporting and evaluation. That also means states need to know where the dollars are going and what they are getting for the investment. Year one performance really matters.
Singleton: And it’s not just CMS. Congress and the Office of Inspector General for HHS will also be watching how states use these funds.
Q: What rural health policy developments are you watching in early 2026?
Nolan: Decisions about the leadership for these initiatives and state legislatures. Federal investment can only go so far. States will need strong leaders and supportive policies to accelerate and sustain RHTP efforts in year one. What legislatures choose to prioritize will shape the impact of RHTP far beyond year one.
Tracking Medicaid’s Growth: FFY 2025 Spending and T-MSIS Data Provide Insights on Managed Care Spending
This week, our In Focus section highlights findings from a Health Management Associates Information Services (HMAIS) analysis of the Centers for Medicare & Medicaid Services (CMS) preliminary CMS-64 Medicaid expenditure report for federal fiscal year (FFY) 2025. The data show total medical services expenditures reached $971.4 billion across all states and territories, up 6.9 percent from FFY 2024.
This CMS-64 spending detail provides important context as states prepare for their upcoming legislative sessions and begin implementing changes required under the 2025 budget reconciliation act (P.L. 119-21, OBBBA). Early fiscal and operational pressures will stem from changes to the Supplemental Nutrition Assistance Program (SNAP) and preparations for community engagement requirements for Affordable Care Act (ACA) Medicaid expansion enrollees. In subsequent years, pressures will intensify because of major changes to provider tax financing and new federal limits on state directed payments in 2027 and early 2028.
In this article, we provide a deeper review of Medicaid spending, including the federal-state financing split. As Medicaid agencies prepare for upcoming spring sessions and anticipate potential program changes under OBBBA, it is notable that nearly two-thirds of Medicaid directors report an at least fifty percent likelihood of a Medicaid budget shortfall in FFY 2026.
Growth and Drivers in Medicaid Managed Care Spending
The HMAIS analysis looks at CMS-64 preliminary estimates of Medicaid spending by state for FFY 2025. CMS tracks state expenditures through the automated Medicaid Budget and Expenditure System/State Children’s Health Insurance Budget and Expenditure System (MBES/CBES).
While enrollment decreased for most states following the COVID-19 public health emergency unwinding, states saw an uptick in expenditures due to increased state directed payments, greater utilization and sicker populations, higher drug costs, increased provider rates, and greater use of long-term services and supports and behavioral health.
Key findings from HMAIS’ analysis (see Table 1), include:
- Total Medicaid managed care spending (federal and state share combined) reached $550.5 billion in FFY 2025, up from $517.5 billion in FFY 2024.
- This amount represents a 6.4 percent year-over-year increase from FFY 2024 to FFY 2025.
- Managed care accounted for 56.7 percent of total Medicaid spending in FFY 2025, down 0.3 percentage points from the previous year.
- The $33 billion increase from FFY 2024 to FFY 2025 exceeds the $9.4 billion increase seen the year prior, reflecting renewed growth following the unwinding transition period.
These figures include spending on comprehensive risk-based managed care organizations (MCOs), prepaid inpatient health plans (PIHPs), and prepaid ambulatory health plans (PAHPs). PIHPs and PAHPs refer to prepaid health plans that provide a subset of services, such as dental or behavioral health care. This total is exclusive of fee-based programs such as primary care case management models.
Table 1. Medicaid MCO Expenditures as a Percentage of Total Medicaid Expenditures, FFY 2020–2025 (in millions)
Annual Medicaid managed care expenditures have grown consistently with total Medicaid expenditures. After slower growth in FFY 2024—which aligned with the post-COVID-19 policy unwinding period when many states completed eligibility redeterminations—FFY 2025 again experienced an uptick in managed care growth (see Figure 1).
Figure 1. Total and MCO Medicaid Expenditures, FFY 2020–2025 ($M)
Federal versus State Share Spending
The preliminary FFY 2025 expenditure data provides a baseline before OBBBA’s changes are scheduled for implementation and as states continue to face Medicaid funding challenges. In FFY 2025, federal funding accounted for 64.2 percent of FFY 2025 spending, and non-federal matching funds accounted for 35.8 percent (see Table 2). Particularly later in 2027, 2028, and subsequent years, Medicaid expansion states stand to see disproportionally larger increases in their share of spending.
Table 2. Federal versus State Share of Medicaid Expenditures, FFY 2020–2025 (in millions)
T-MSIS Data Adds Detail to CMS-64 MCO Spending
To complement CMS-64 macro-spending trends, HMA developed a methodology allowing us to use Transformed Medicaid Statistical Information System (T-MSIS) data to approximate managed care spending by service category. Although T-MSIS enables more granular views (e.g., professional services, inpatient/outpatient hospital services, skilled nursing facilities (SNFs), HCBS, clinics, pharmaceuticals), the most recent dataset typically lags one to two years behind CMS-64 totals.
HMA’s analysis of the T-MSIS data shows that while managed care remains the dominant delivery system model for Medicaid, spending by provider types helps contextualize the CMS-64 report. Notably, the CMS-64 reports FFY25 data and our report below on T-MSIS disaggregation uses 2023 data. Although the T-MSIS and CMS-64 data are for different years, it still highlights the main components of the largest spending component of the CMS-64 with more recent data.
The 2023 T-MSIS analysis shows the following:
- Professional fees are the lead spending category, with nearly 30 percent of spending directed toward payments to physicians and other practitioners (e.g., physician assistants, nurse practitioners). Given that T-MSIS data are built around billing codes, services that traditionally may be considered part of a bundled rate (i.e., a large portion of physician services delivered in hospitals and clinics) are essentially unbundled and considered professional fees.
- Hospital spending (inpatient plus outpatient), SNF costs, and professional fees together account for close to 75 percent of spending in CY 2023.
Figure 2. T-MSIS Medicaid Spending by Service Category 2023 (MCO disaggregated plus FFS)
What to Watch
Because Medicaid is such a big part of state government spending, outlays for Medicaid will always be a focus and challenge for states. Upcoming state legislative sessions and OBBBA driven changes will begin in 2026 with SNAP pressures and major operational preparations for community engagement requirements for expansion states. Preparations for new limits on provider taxes and state directed payments will likely begin immediately, but the true impacts will occur in 2027 and early 2028. States will need to tailor their programs under funding constraints.
Connect with Us
HMAIS, a subscription-based tool that Health Management Associates offers, provides state-by-state analysis of the CMS-64 data, Medicaid managed care enrollment trends, and state budget reporting. For more information about an HMAIS subscription, contact Andrea Maresca and Alona Nenko. For details on T-MSIS data, contact Matt Powers and Shreyas Ramani.
January 14, 2026
Tracking Medicaid’s Growth: FFY 2025 Spending and T-MSIS Data Provide Insights on Managed Care Spending
2027 ACA Considerations: Proposed NBPP and Other Key Changes and Trends
Upon the release of the CMS final 2027 Notice of Benefit and Payment Parameters and the accompanying Letter to Issuers in January, health plans and state policymakers will face critical decisions that shape the next phase of the individual and small group markets.
Join experts from HMA and Wakely for a timely discussion unpacking what the proposed rule means in practice and how stakeholders can begin preparing now. This webinar will provide a clear overview of the final 2027 NBPP** and Letter to Issuers, highlight the most significant policy changes and clarifications, and explore the operational and strategic implications for states. Speakers will focus on how the final policies may influence market stability, affordability, program administration, and longer-term planning for 2027 and beyond.
** We expect that the NBPP will have been released before the webinar takes place, but if the NBPP is not yet released we will cover likely scenarios based on our best available information.
Learning Objectives:
•Understanding the proposed 2027 NBPP and Letter to Issuers
•Awareness of key implications for states and issuers
•Discussion of key planning considerations for 2027
Executive Branch Actions Target Drug Affordability in New Pricing Models
The federal drug pricing landscape continues to undergo significant transformation as executive branch agencies advance an ambitious suite of regulatory and model testing initiatives intended to lower the costs associated with the Medicare and Medicaid programs. In response to ongoing concerns about rising out-of-pocket costs, increasing pressure to align US prices with those paid internationally, and the continued implementation of the Inflation Reduction Act (IRA), federal agencies are reshaping how prescription drugs are priced, reimbursed, and negotiated in federally financed programs.
The current policy environment reflects a growing emphasis on benchmarking drug prices to those in peer nations, referred to as “most favored nation” (MFN) benchmarks, and accelerating actions that require or encourage manufacturers to offer lower net prices. Health Management Associates (HMA), is tracking these developments in the public payer space, replicating Centers for Medicare & Medicaid Services (CMS) payment methodologies, and modeling alternative policies to assist life science companies, payers, and other stakeholders.
In this article, we review the administration’s recent efforts to reduce Medicare and Medicaid spending on drugs and biologics, including confidential manufacturer negotiations and three new models that together could reshape pricing dynamics across federal programs.
Executive Branch Negotiations Seek to Drive Access to MFN Discounts
In 2025, the administration issued an Executive Order directing federal agencies to pursue strategies to establish MFN pricing, linking US prices for certain drugs to the lowest (or second lowest) adjusted net prices among a targeted set of peer countries. Following the order, federal officials sent letters to 17 major pharmaceutical and biotechnology manufacturers, urging them to negotiate agreements that would voluntarily align prices with MFN-based benchmarks.
To date, 14 manufacturers have signed agreements, though full details remain confidential. These agreements are understood to accomplish the following:
- Provide state Medicaid programs with access to MFNbased discounts
- Require that new drugs be launched in the United States at MFNaligned prices
- Offer certain drugs at discounted directtoconsumer prices through a forthcoming “TrumpRx” program, expected to launch later this year
Reports suggest that manufacturers entering these MFN-related arrangements may receive exemptions from several federal actions, including the Center for Medicare and Medicaid Innovation (Innovation Center) demonstration models described below and certain tariff-related policies.
MFNLinked Models Designed to Lower Drug Costs Across Medicare and Medicaid
Along with the negotiation efforts, the CMS Innovation Center has proposed three models that would test MFNbased pricing through structured rebate mechanisms. Each model targets different segments of the market while testing how international benchmarks could be integrated into federal drug payment policy.
New Models Test Alternatives to Inflation Rebates
Announced in December 2025, the Global Benchmark for Efficient Drug Pricing (GLOBE) Model and the Guarding US Medicare Against Rising Drug Costs (GUARD) Model are designed to test alternative approaches to the Inflation Reduction Act’s (IRA) inflation penalty policies. CMS plans to test the models’ potential for market driven price reductions if manufacturers choose to lower list prices instead of paying MFN-based rebates.
Key features of the GLOBE Model are as follows:
- Applies to 25 percent of Medicare fee-for-service (FFS) beneficiaries using certain Part B drugs
- Beginning in October 2026, becomes mandatory for select drugs and targets highspending, physicianadministered Part B categories, excluding products already subject to IRA negotiations, generics, biosimilars, and certain lowspend products
- No changes to physician and hospital reimbursement, although beneficiaries expected to see reduced cost sharing
The GUARD Model will similarly test whether applying MFN-based rebates to Medicare Part D drugs will lower Medicare costs. Key aspects of this model include:
- Fiveyear model that would start January 1, 2027
- Target therapeutic categories with more than $69 million in annual Part D spending
- No impact on plan bids and beneficiary cost sharing
These models rely on pricing data from 19 countries. Manufacturers that voluntarily submit net price information would trigger quarterly benchmark updates; otherwise, CMS will use a fixed list price based benchmark for the entire pilot period.
CMS is seeking comments on whether additional categories, for example cell and gene therapies, should be excluded from GLOBE. GUARD is also open for comment through February 23, 2026.
GENErating cost Reductions fOr US Medicaid (GENEROUS) Model
The GENEROUS model, expected to begin in 2026, creates a voluntary pathway for state Medicaid programs and manufacturers to enter supplemental rebate agreements tied to MFNaligned prices. MFN pricing under this model is based on the second lowest net price in G7 countries plus Denmark and Switzerland. GENEROUS is also expected to align with pricing commitments negotiated through the administration’s manufacturer agreements.
Key Considerations and Potential Impacts
The combined effect of federal negotiations and Innovation Center models could be substantial, though outcomes will depend on manufacturer participation, benchmark stability, and operational feasibility. Key considerations include:
- State Medicaid savings, especially the extent to which MFN‑linked rebates exceed existing supplemental rebates
- Reduced Medicare beneficiary cost sharing for Part B included in GLOBE
- Shifts in manufacturer pricing strategies, including potential changes to US launch prices
- Interactions with the IRA, particularly Part D redesign and Part B inflation penalties
Connect with Us
HMA experts continue to track the federal drug pricing landscape closely as comments, operational details, and implementation timelines evolve across these initiatives. Our team replicates CMS payment methodologies and models alternative policies using the most current Medicare FFS and Medicare Advantage (100%) claims data.
For more information and questions about the policies described in this article, please contact our experts below.
CMS Announces Rural Health Transformation Program Awardees
On December 29, 2025, the Centers for Medicare & Medicaid Services (CMS) announced the state awards for the Rural Health Transformation Program (RHTP), a $50 billion federal initiative intended to stabilize rural health systems and support transformation. CMS stated that $10 billion will be available each year from 2026 to 2030, and that first-year (2026) state awards average $200 million, with totals ranging from $147 million to $281 million.
This announcement marks a pivot from planning to execution. In the coming months, states will move rapidly to finalize governance structures, confirm partners, and translate proposed initiatives into operational workplans and measurable outcomes.
Although CMS announced the overall awards for the first budget year, some states have signaled they continue to work with CMS on initiative-specific budgets and planning. In this article, Health Management Associates (HMA) reviews key themes and early trends based on the application initiatives and what is known about the budgets.
What the Awards Suggest About State Priorities
Although each state’s awarded approach reflects local realities, early patterns across awardees’ project abstracts suggest several recurring priorities that may shape implementation activity in 2026.
1) Building the Data, Analytics, and Interoperability Backbone
A number of awardees prioritized shared infrastructure for interoperability, analytics, performance monitoring, and operational backbone capabilities. Examples include:
- Arizona described plans to secure vendors to build secure data pipelines, dashboards, and fiscal tracking tools that meet federal audit standards to support rural transformation.
- New Mexico proposed a Rural Health Data Hub to build a statewide health analytics platform that integrates siloed data sources and expands access to timely, actionable information for providers.
- Alaska described technology-focused investments to strengthen cybersecurity, facilitate data sharing and interoperability, and expand digital tools (including consumer-facing tools and remote modalities).
2) Strengthening Maternal Health and Perinatal Care
Many awardees emphasized stabilizing rural maternity access and strengthening perinatal supports through strategies, such as:
- Alabama proposed a Maternal and Fetal Health initiative featuring digital obstetric regionalization and telerobotic ultrasound to extend specialty access in rural settings.
- Kentucky prioritized maternal and infant health by addressing maternity care deserts, including telehealth-enabled community-based maternal/infant support teams and expanded perinatal care access.
- Ohio proposed legislative reforms to allow low-risk birthing centers in rural hospitals as part of its broader strategy to address maternity care deserts and improve rural access to care.
Why it matters: Rural maternity deserts and workforce constraints remain critical drivers of avoidable complications and adverse outcomes. Approaches piloted in rural settings may inform broader statewide maternity care strategies.
3) Modernizing Emergency Medical Services and Mobile Care
Several awardees included investments intended to strengthen emergency response and build more reliable rural stabilization capacity.
- Alabama proposed statewide emergency medical services (EMS) initiatives, including trauma and stroke routing/diversion improvements and an EMS treat-in-place model for low-acuity patients.
- Wyoming emphasized access to “the basics,” including improvements in the ability of hospitals to effectively treat emergencies and ambulance response, alongside incentives for small ambulance services to consolidate around more sustainable regional funding bases.
Why it matters: EMS and mobile response models can function as connective tissue in rural systems with limited traditional access points.
Why it matters: Data-sharing infrastructure can enable multi-provider coordination, performance tracking, and the operational foundations needed for sustainable transformation.
4) Integrating Behavioral Health and Community-Based Supports
Awards also reflected ongoing efforts to expand behavioral health access and improve integration with physical health and community supports. For example:
- Alabama proposed to improve behavioral health access by converting Community Mental Health Centers into Certified Community Behavioral Health Clinics (CCBHCs).
- Arizona proposed to invest in behavioral health and substance use disorder treatment expansion as part of its Priority Health Initiatives portfolio.
- Wyoming included statewide telepsychiatry and crisis intervention services as part of its health outcomes priorities.
Why it matters: Behavioral health capacity constraints are frequently more acute in rural areas, and integration strategies often require both reliable workforce and technology supports.
What to Watch Next
With awards announced, attention will quickly turn to implementation. Stakeholders should have processes to track the following:
- State governance decisions (including lead agencies, subawards, and regional structures) and funding opportunities
- State partner selection processes (through requests for proposals, vendor onboarding, or other contracting pathways)
- Performance measurement and reporting expectations (including metrics and evaluation approaches)
- Sequencing of the initiatives and where near-term operational activity is most likely to concentrate
CMS also signaled near-term oversight and engagement mechanisms, state-assigned CMS project officers, kickoff meetings, ongoing technical assistance, and regular progress updates, along with a planned annual CMS Rural Health Summit.
Tracking State RHTP Implementation
The HMAIS team developed a resource to capture available information about state RHTP activities, applications, and initiatives and provide a road map for identifying state-specific proposals, requested funding, governance structures, and other key aspects of state RHTP initiatives.
Following CMS’s award announcement, HMAIS is updating this Rural Health Transformation Program (RHTP) Tracker to incorporate award-specific details as they become publicly available. The resource includes information about FY26 awards by state and initiatives, links to CMS materials and state-posted implementation documentation, and a consolidated view of emerging themes and trends as implementation accelerates in 2026.
Looking Ahead
The award announcement is the beginning of implementation. As states operationalize initiatives in early 2026, organizations that align early to awarded priorities and implementation timelines will be best positioned to support rural-first efforts that deliver measurable and lasting results.
Meeting the Healthcare Needs of Unhoused People Part 1: Service and Care Responses
Join us for the first of two webinars exploring how current events are impacting people experiencing homelessness and their access to care. This webinar will highlight the model of care for healthcare for the homeless clinics and medical respite care providers and how these services interact with broader systems of care. Additionally, we will explore how the current environment is impacting delivery and financing of care for some of our most vulnerable neighbors.
Learning Objectives:
- Define the model of care for healthcare for the homeless and medical respite care
- Identify two ways that current events are impacting the delivery and financing of care for people experiencing homelessness
- Identify two strategies for supporting service providers working to support the healthcare needs of people experiencing homelessness.
Featured Speakers:
Julia Dobbins, MSW, Director of Medical Respite National Health Care for the Homeless Council
Lawanda Williams, MSW, MPH, Chief Behavioral Health Officer Health Care for the Homeless
Kim Despres, DHA, RN, CEO Circle the City
Catherine Crosland, MD, Medical Director of Emergency Response Sites Unity Health Care
Don’t miss out on Meeting the Healthcare Needs of Unhoused People Part 2: Service and Care Responses on February 3.
Meeting the Healthcare Needs of Unhoused People Part 2: State Policy Responses
Recent federal policy changes, such as the 2025 Budget Reconciliation Act (OBBBA), bring significant challenges to retaining the Medicaid coverage gains and added 1115 waiver services that have been so successful in the last decade. States will be under tremendous pressure to meet new requirements—but they also have options to reduce the negative impact on vulnerable populations and the healthcare providers that serve them. Join us for this webinar to discuss state-level policy options, share resources, and consider how to move forward in the current environment.
Learning Objectives:
- Identify three provisions in the 2025 budget reconciliation legislation that have a strong impact on unhoused people.
- Identify two policy actions that lawmakers in all states should take to reduce the loss of Medicaid coverage for people experiencing homelessness.
- Identify three policy actions that lawmakers in Medicaid expansion states can take to reduce the burden of work requirements on unhoused people.
Featured Experts:
Barbara DiPietro, PhD, Senior Director of Policy National Health Care for the Homeless Council
Rhonda Hauff, CEO Yakima Neighborhood Health Services Yakima, WA
Kevin Lindamood, President and CEO Health Care for the Homeless, Baltimore, MD
Don’t miss out on Meeting the Healthcare Needs of Unhoused People Part 1: Service and Care Responses on January 27.
2025 Year-End Wrap-Up: ACA Subsidies and What to Expect in 2026
As 2025 draws to a close, Congress finds itself at a crossroads on several critical health policy issues, with the fate of the Affordable Care Act (ACA) subsidies front and center. The year has been marked by intense negotiations and a flurry of proposals, many of which remain unresolved as lawmakers look ahead to a pivotal January 30 deadline for appropriations spending bills. In this article, policy experts from Health Management Associates (HMA)—including Leavitt Partners, an HMA company—provide a comprehensive wrap-up of Congress’ work on ACA subsidies, executive agency actions, and what stakeholders should anticipate in early 2026.
ACA Subsidies: A Year of Uncertainty and Political Maneuvering
The expiration of enhanced ACA subsidies at the end of 2025 has been a focal point for congressional debate. Despite numerous bipartisan groups and a multitude of proposals circulating, consensus has proven elusive. The Senate voted on an ACA-related measure December 11, 2025, but neither the Democrats’ proposal for a three-year extension nor the Republican alternative to replace subsidies with health savings accounts advanced and revise certain other Medicaid policies.
The situation in the House has been equally complex. House GOP leaders unveiled a healthcare package designed to lower costs, expand association health plans, and increase transparency for pharmacy benefit managers. The package would not extend the expiring enhanced ACA subsidies, and even if the House bill passes, the Senate is unlikely to consider it. In addition, on December 17, House Democrats secured enough support to force a vote on a bill that would provide a three-year extension of enhanced subsidies, although House rules preclude scheduling a vote on the bill until January.
The prevailing sentiment among policy experts is that no substantial action will be taken before year’s end.
The White House briefly floated a two-year extension of the enhanced subsidies, but walked back the proposal, signaling fluidity in the policy discussions within the administration and among congressional Republicans. The absence of consensus on both policy and political ramifications has left the ACA subsidy issue in limbo.
Looking Ahead: January’s Appropriations Deadline and ACA Options
December 15, 2025, marked the last day for consumers to enroll in ACA coverage policies that take effect January 1, 2026, meaning that for many health insurance purchasers, choices for 2026 are already set. Policymakers are now focused on another deadline for potential ACA subsidy action—January 30, 2026, when temporary funding for the current federal fiscal year expires. It is possible that a solution could be attached to the spending package, potentially affecting 2026 premiums, although operational challenges abound. The most feasible option at this stage would be a premium rebate, which would avoid reopening enrollment but require complex rate adjustments. Any substantive changes to the subsidy structure would demand significant actuarial analysis and could disrupt both health plans and state activities.
Congressional Dynamics: Appropriations, Extenders, and Policy Riders
The appropriations process is center stage as Congress approaches the January 30, 2026, deadline. Lawmakers are seeking to continue passing “minibus” packages—small groups of appropriations bills—to avoid another government shutdown. Most Medicare and Medicaid policy priorities, including must-pass extenders like telehealth flexibilities and the hospital at home program, are dependent on appropriations vehicles to advance. If Congress resorts to a stopgap continuing resolution, only the most essential extenders are likely to be included, with broader policy riders at risk of being sidelined.
Policy Outlook
Pharmacy benefit manager (PBM) reform stands out as a top bipartisan priority, with both House and Senate members eager to advance transparency and de-linking measures. Other lingering issues from the December 2024 healthcare package include Medicaid spread pricing prohibitions, streamlined enrollment for out-of-state providers, and targeted benefits for military service members. In Medicare, multi-cancer early detection screening and digital health policies may resurface, though larger reforms like Medicare physician fee schedule changes are likely to be deferred until later in 2026.
Agency Developments: CMS Innovation and Regulatory Changes
Beyond Congress, the Centers for Medicare & Medicaid Services (CMS) has been active, rolling out new models and rules that will shape the landscape in 2026 and beyond. Highlights include the 2027 Medicare Advantage Policy and Technical Changes Proposed Rule. Although it introduces no major policy shifts, the proposed rule addresses quality measurement, special needs plans, the Health Equity Index, and administrative burden reduction. It also codifies changes from the Inflation Reduction Act, such as cost-sharing and out-of-pocket limit reforms. The new ACCESS model (Advancing Chronic Care with Effective, Scalable Solutions) is intended to incentivize tech-enabled care for chronic conditions, with the model beginning July 2026.
CMS also released updates to the outpatient, home health, and durable medical equipment rules, with a continued focus on site neutrality (aligning payments across settings) and removing barriers to beneficiary choice. The agency is placing ongoing emphasis on data collection, price transparency, and updated payment methodologies to reflect modern practice and technology. The GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model introduces most favored nation pricing for Medicaid, while additional mandatory Medicare drug pricing models are under review. Rural health transformation remains a CMS priority, with expectations for further announcements and awards before the end of the year.
We expect 2026 to be another busy year for CMS with more new models being announced, continued policy refinements in the fee-for-service payment systems, and changes in Medicare Advantage based on feedback from the requests for information.
Connect with HMA Policy Experts
As the new year approaches, uncertainty remains the defining feature of federal health policy. The fate of ACA subsidies, the appropriations process, and a host of other reforms will hinge on negotiations in the coming weeks. For stakeholders navigating these complex dynamics, HMA’s team of policy experts stands ready to provide guidance, analysis, and support.