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Blog

Executive Actions and Congressional Budget Reconciliation: Trump Administration’s 2025 Healthcare Overhaul

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This week, our In Focus section highlights how the new Administration and Congress are poised to significantly change healthcare policies, ranging from health equity and Affordable Care Act (ACA) Marketplace subsidies to Medicaid services and prescription drug costs. Stakeholders seeking to influence these potential changes should plan to engage quickly. Today’s section covers important developments that occurred through 2 pm January 29, and healthcare stakeholders will need to remain attune to future developments impacting federal healthcare programs.  

Executive Action 

Over the first week of his second term, President Donald J. Trump has issued several executive orders (EOs) and presidential directives affecting healthcare stakeholders. Presidents have increasingly used EOs at the beginning of their administration to rescind policies of their predecessors and direct the federal departments and agencies to exercise their authorities in line with the president’s directives. 

Though some EOs require no further action, many are just the beginning of the policymaking process, with agencies tasked with implementing the directives. This timeline can provide stakeholders with opportunities to work with to policymakers to inform how they shape the rules for compliance with these directives. 

Initial EOs issued so far by President Trump include policies that: 

  • Rescind several of former President Biden’s Executive Orders, including:
    • Executive Order 13985 of January 20, 2021, Advancing Racial Equity and Support for Underserved Communities Through the Federal Government 
    • Executive Order 13988 of January 20, 2021, Preventing and Combating Discrimination on the Basis of Gender Identity or Sexual Orientation 
    • Executive Order 13990 of January 20, 2021, Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis 
    • Executive Order 14009 of January 28, 2021, Strengthening Medicaid and the Affordable Care Act 
    • Executive Order 14070 of April 5, 2022, Continuing to Strengthen Americans’ Access to Affordable, Quality Health Coverage 
    • Executive Order 14075 of June 15, 2022, Advancing Equality for Lesbian, Gay, Bisexual, Transgender, Queer, and Intersex Individuals 
    • Executive Order 14087, of October 19, 2022, Lowering Prescription Drug Costs for Americans 
  • Direct the Office of Management and Budget (OMB), the Attorney General, and Office of Personnel Management (OPM) to “coordinate the termination of all discriminatory programs,” including diversity, equity, and inclusion (DEI) programs, policies, and activities in the federal government. 
  • Combat “illegal private-sector diversity, equity, and inclusion (DEI) preferences, mandates, policies, programs, and activities.” 
  • Freeze federal rulemaking until department heads appointed or designated by the president can review and approve the rules and withdraw rules that have been sent to but not yet published in the Federal Register so they can be reviewed. 
  • Establish and implement the Department of Government Efficiency (DOGE) as a temporary organization within the Executive Office of the President that reports to the White House Chief of Staff. Executive agencies are directed to establish DOGE teams of at least four employees. DOGE is intended to modernize Federal technology and software to maximize governmental efficiency and productivity. 
  • Require OMB, OPM, and DOGE to submit a plan within 90 days to reduce the size of the federal government’s workforce through efficiency improvements and attrition. 

Developments on the Federal Funding Pause 

Notably, the White House OMB issued a memo (Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs) on January 27, 2025, to all agencies with instructions to temporarily pause and provide a comprehensive analysis of all activities related to obligation or disbursement of federal financial assistance programs that EOs may affect. On January 29, 2025, the administration retracted the directive for a temporary pause on federal payments, though reiterated it will continue to review federal funding. 

Though it is customary for a new administration to pause communications, regulatory activity, and new funding opportunities as incoming political appointees are confirmed and policy agendas are solidified, the breadth of the federal funding pause exceeds prior orders. The first lawsuit was filed on January 28, and a federal judge for the US District Court for the District of Columbia quickly issued a temporary stay on the federal funding pause until at least February 3, 2025, while she considers arguments in the case. 

The now-rescinded January 27 memo was scheduled to take effect at 5:00 pm ET on January 28, 2025, to give the Trump Administration “time to review agency programs and determine the best uses of the funding for those programs consistent with the law and the President’s priorities.” According to the memo, the pause did not apply to Medicare or Social Security payments. In a subsequent document, OMB further clarified that “mandatory programs like Medicaid and SNAP [the Supplemental Nutrition Assistance Program] will continue without pause.” 

What to Watch: Executive Actions and Budget Reconciliation 

The Trump Administration has indicated that federal programs and funding should be aligned with his administration’s priorities. Healthcare stakeholders should be prepared for additional scrutiny of future funding awards. 

Meanwhile, congressional Republicans are preparing to quickly leverage the budget reconciliation process to pass legislation related to several priority areas, including taxes, immigration, and domestic energy production (see Spotlight on Congress: Budget Reconciliation Update). Budget reconciliation provides a rare opportunity to pass significant healthcare legislative changes on a party-line basis. House Republicans have begun to develop their menu of healthcare options, which range from changes to the ACA premium tax credit structure, expanding Health Savings Accounts, and changes in Medicaid financing and eligibility. 

In a January 2025 webinar, experts from Leavitt Partners, an HMA company, Liz Wroe, Sara Singleton, and Laura Pence discussed the potential health policy priorities of the Trump Administration, the implications of reconciliation for healthcare stakeholders, and the challenges and opportunities presented while navigating this expedited process. 

Navigating Change 

HMA experts are working with federally funded entities to quickly analyze their federal awards and plan for the next phase of federal agency actions and oversight. HMA companies also help healthcare stakeholders seeking to inform, shape, prepare for, and implement federal policy changes. Organizations seeking to influence the outcome of these policy debates and to thrive in a dynamic legislative and regulatory environment must have the most up-to-date information, informed by partners that understand the processes and the underlying policies under consideration. 

HMA experts provide additional complementary services, including analyses to predict how the Congressional Budget Office will score the costs or savings of specific policies. Especially in the reconciliation environment, the budgetary impact of particular policies can significantly influence their likelihood of passage. 

Connect with Us 

To learn more about the these policy changes and the impact on your organization, watch our January 2025 policy webinar and contact one of our featured experts below.

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CMS Approves CA’s State Plan Amendment for Dyadic Care Authorizing Payment to FQHCs at Fee-for-Service Rates for Dyadic Care

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On January 6, The Centers for Medicare & Medicaid Services (CMS) approved Medicaid State Plan Amendment (SPA) #23-0010. The SPA authorizes the California Department of Health Care Services Service (DHCS) to use an alternative payment methodology (APM) to pay Federally Qualified Health Centers (FQHC), Rural Health Clinics (RHC), and Tribal Health Programs at the Medi-Cal fee-for-service (FFS) rate for dyadic services. FQHCs and RHCs will receive a separate payment for dyadic services in addition to their standard prospective payment system (PPS)/all-inclusive payment rates in certain circumstances. This SPA is retroactively effective to March 15, 2023.

Key provisions are as follows:

  • California’s new set of dyadic benefits supports relationship-based caregiver and family surveillance and family-based interventions that bolster child development, recognizing the importance of the parent/caregiver and child dyad to support healthy child development. Dyadic health care services are ideally provided in the context of routine well child care in pediatric settings, meeting families where they regularly receive health care and related services.
  • Services are linked to a child’s Medi-Cal coverage, providing a basis for revenue recovery for primary care pediatric settings and for cases in which the parent/caregiver may not be a Medi-Cal beneficiary.
  • Services are exempt from the same day exclusion applied to FQHC and RHC settings. If FQHCs or RHCs have met their visit per day limit, then dyadic services provided to Medi-Cal-eligible members (children or parents/caregivers) will be reimbursed at the FFS rate. Any dyadic services that are provided to a non-Medi-Cal-eligible parents/caregivers for the direct benefit of Medi-Cal-eligible children will be reimbursed at the FFS rate.
  • Payment for dyadic FQHC and RHC services will be reimbursed at the applicable FFS rate in addition to Medi-Cal member visits, which are reimbursed at the applicable PPS rate.

In addition, the dyadic care benefit provides a pathway for families to access additional supports via the new family therapy benefit. Family therapy is a psychotherapy service that managed care plans provide under Medi-Cal’s Non-Specialty Mental Health Services benefits. Family therapy services support members younger than age 21 to receive up to five family therapy sessions before a mental health diagnosis is required. More importantly, children and youth (younger than age 21) may receive family therapy without the five-visit limitation if they (or their parents/caregivers) demonstrate certain risk factors, including separation from a parent/caregiver because of incarceration, immigration status, or death; foster care placement; food insecurity; housing instability; exposure to domestic violence or trauma; maltreatment; severe/persistent bullying; and discrimination.

Health Management Associates (HMA) has been proud to partner with HealthySteps, as a DHCS-recognized model, to provide an evidence-based (APL 22-029 (ca.gov) approach to implementing the new dyadic care benefits. Contact our experts below to learn more.

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CMS Releases Final 2026 Marketplace Benefit and Payment Parameters

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Trump Administration and Congress to Consider Policy Changes

This week, our In Focus section reviews the final Notice of Benefit and Payment Parameters (NBPP) for 2026. The Centers for Medicare & Medicaid Services (CMS) rule, released January 13, 2025, describes the policy and payment parameters for issuers that participate in federally facilitated and state-based marketplaces in 2026.

The NBPP is particularly notable given that marketplace enrollment is at an all-time high. Last week, CMS reported that 24.2 million people joined a marketplace plan during 2025 Open Enrollment, exceeding last year’s historically high enrollment levels by more than 2 million people.[1] With millions more individuals covered in the individual market, this final rule presents several opportunities for the healthcare industry to improve the well-being of covered individuals and families and the financial health of participating organizations.

Marketplace policies are under scrutiny, however, from new Trump Administration officials and congressional leaders. Subsidies, eligibility, and reimbursement are among the topics receiving the greatest attention.

Key highlights from the final rule and considerations for stakeholders in the changing healthcare landscape follow.

Consumer Protections

The final rule further strengthens consumer protections, consistent with the policies advanced during the Biden Administration. CMS finalized policies to achieve the following:

  • Protect consumers from agents and brokers seeking to make unauthorized changes to their healthcare coverage
  • Allow the agency to take enforcement actions against lead insurance agents for violations of marketplace standards
  • Expand the agency’s authority to immediately suspend an agent or a broker’s ability to make transactions within the marketplace if the information creates an unacceptable risk to the accuracy of marketplace eligibility determinations, operations, applicants, or enrollees, or marketplace IT systems
  • Update the model consent form, which helps agents and brokers document consent from consumers to assist with their marketplace enrollments and submission of marketplace eligibility applications

Revisions to Marketplace User Fees

The enhanced premium tax credits are the driving force behind the increase in nationwide marketplace enrollment to more than 24 million today from 11.4 million in 2020. If not extended, or if Congress takes no action by July 31, 2025, CMS will increase the user fees collected to pay for administration of HealthCare.gov as follows:

  • Increase fees to 2.5 percent of monthly premiums in 2026 for federally facilitated marketplaces (FFM) states, up from 1.5 percent in 2025
  • Increase fees to 2.0 percent of monthly in 2026 for state-based marketplaces on the federal platform (SBM-FPs)—up from 1.2 percent in 2025

CMS also is finalizing an alternative set of user fee rates. If enhanced premium tax credit subsidies are extended through the 2026 benefit year by July 2025 at the current or a higher level the following user fees rates will apply:

  • 2 percent for FFM states
  • 1.8 percent for SBM-FPs

CMS originally proposed a March 2025 subsidy extension deadline for activating the lower user fee. Insurer should take into account the higher user fees when setting their 2026 premiums—SBMs as they finalize their 2026 user fee levels and FFM states considering the costs of staying in Healthcare.gov or transitioning to a SBM.

Premium Payment Threshold Options

CMS finalized new options for insurers to avoid triggering late payment grace periods for members who make most but not all their premium payment. The new threshold options are intended to minimize termination of coverage for people who owe small amounts. The options include:

  • For the first month’s premium payment to effectuate coverage—or binder payments—the only option is to use a net premium threshold as low as 95 percent
  • For all other premium payments after the first month’s payment, the options include:
    • Net premiums as low as 95 percent or a fixed dollar threshold of up to $10
    • Gross premiums percent of as low as 98 percent or fixed dollar threshold of up to $10

Fixed dollar thresholds will be adjusted for inflation.

Information Sharing and Transparency

CMS is finalizing policies designed to increase transparency and promote program improvements by publicly releasing state marketplace operations data, including spending on outreach and additional open enrollment customer service metrics, such as for call center performance surveys and website visits. The final rule clarifies that CMS will not publicly release each SBM’s annual State-based Marketplace Annual Reporting Tool (SMART), a reversal from what was proposed.

In addition, CMS is finalizing that it will share aggregated, summary-level Quality Improvement Strategy (QIS) information publicly on an annual basis starting January 1, 2026, with data submitted during the 2025 qualified health plan application period.

What’s Next/Key Considerations

The new leadership at the US Department of Health and Human Services (HHS) and CMS will likely conduct a thorough review of these payment and policy changes. In consideration of potential repeals or modifications, states and marketplace plans will need to consider the following:

  • Uncertainty around extending or modifying Affordable Care Act subsidies
  • Potential statutory changes approved by Congress and regulatory changes from the Trump Administration
  • Review of existing operations and policies in light of the new regulations and the changing policy environment

Connect With Us

Health Management Associates experts support states, managed care organizations, consumer groups, and other interested stakeholders to achieve success in the operation of and participation in the marketplaces. Our team has the broadest historical perspective on the challenges and opportunities in this market and can support every step of the planning and execution processes to optimize markets as they continue to evolve in the coming months and years. If you have questions or want to discuss the final rule, contact our experts below.

[1] Centers for Medicare & Medicaid Services. Over 24 Million Consumers Selected Affordable Health Coverage in ACA Marketplace for 2025. January 17, 2025. Available at: https://www.cms.gov/newsroom/press-releases/over-24-million-consumers-selected-affordable-health-coverage-aca-marketplace-2025.

Blog

Federal election impacts on Ohio Medicaid

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Ohio Medicaid is no stranger to change. Over the last several years, there have been several broad policy changes, from a new managed care system, to new programs like OhioRISE, to an expansion of MyCare Ohio. And, during this time, there have been complicating factors like the covid-19 public health emergency and the resultant impact of inflation on the basic delivery of services and care. Now, as the Trump administration comes in for the second time, questions arise as to what to expect in Medicaid policy and how it may impact Ohio.

While it’s often overlooked, federal rule making has a significant impact on the operations of states. Just in the last couple of years, the Biden Administration has implemented policies including:

  • The Access rule, such as the 80/20 policy, implementation timelines, and other questions regarding Home and Community Based Services waivers that states and certain stakeholders elevate to the Centers for Medicare & Medicaid Services (CMS).
  • The Managed Care rule, which addresses Medicaid managed care access, financing, and quality, including strengthening standards for timely access to care and states’ monitoring and enforcement efforts.
  • The Long-Term Care Facility (LTC) Staffing rule requires minimum staffing standards for nursing facilities.
  • Two rules streamline Medicaid enrollment and renewal processes for the Medicare Savings Program (MSP) and for Medicaid, CHIP and the Basic Health Program. Each rule is expected to increase Medicaid enrollment by about one million people.

These rules are set to be implemented over several years. The Trump Administration could delay implementation of certain provisions, which would eliminate regulations while rolling back enrollee protections, payment transparency, and improved access. Alternatively, the Trump Administration could adjust their enforcement strategy or issue new regulations that would undo or augment these final regulations.

Beyond regulation, there is still the potential for fundamental policy change to the program’s financing. Notably, the concept of block grants or per-capita caps has reemerged as a potential option, where states would no longer receive federal “match”, but rather a fixed amount based on historical averages. In fact, Energy and Commerce Chair Brett Guthrie has already identified per capita caps as an area of active conversation in the House Republican Caucus.

Making a fundamental, national change in the financing arrangement of Medicaid would require an act of Congress. Many think this movement away from a traditional reimbursement structure was one of the main reasons for the failure to repeal the Affordable Care Act during the first Trump administration. Notably, as Ohio is a “recipient” state, meaning it receives more in federal taxes than it provides for the Medicaid program, this could significantly impact the long-term financial stability in future state budgets. Often, this challenge is why block granting is usually associated with additional state powers around curbing enrollment, services and coverage, so states may more easily cut the program to accommodate tighter financing.

Depending on how all of these changes would unfold, Medicaid programs, including Ohio’s may have to adopt their systems to accommodate. However, the Trump administration may also pursue greater flexibility for states to design and innovate in Medicaid in ways that are consistent with their goals. This could include greater flexibility to limit covered services, raise cost-sharing requirements, limit enrollment or require more frequent determination of eligibility. There may also be programmatic refocusing away from initiatives which center health equity and expanded coverage, including alternatives to “Medicaid expansion”, as well as a fundamental reorientation of the use of waivers.

Speaking of waivers, there is likely going to be a dramatic change in the way waivers are applied and executed. This can include, but is not limited to, waivers that test new policies the prioritize cost-cutting measures over access and coverage, including waivers which change how the Medicaid expansion group is managed in states. Included in this are “Work Requirement” waivers, something Ohio is currently in the process of submitting. While examples from other states have shown that such waivers are often costly to operate and ultimately have the impact of decreasing coverage, the Trump administration and many policymakers see these requirements as a way to ensure labor force participation. Though there is evidence to suggest coverage, alone, increases economic mobility,

As Ohio providers, plans and policymakers gear up for the next state budget, the landscape of Medicaid policy will be something to pay attention to. While Medicaid represents nearly 48% of the total state budget, half of that is from the federal government. What’s more, nearly 1 in 3 Ohioans rely on the program, disproportionately in rural communities, and it supports Ohio’s second largest industry in healthcare. Make sure you stay on top of the latest updates to the program in Ohio and beyond and sign up for HMAs Weekly Roundup.

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Blog

MyCare Ohio: The Next Generation’s Impact on the Ohio Medicare and Medicaid Landscape

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This week, our In Focus section also reviews the significant efforts under way in Ohio to transform how the state provides healthcare services to its Medicare and Medicaid dual-eligible population. Effective January 1, 2026, MyCare Ohio will transition to the Next Generation of its program for people who are dually eligible for both programs.

Overview of Ohio’s Transition to Next Generation MyCare Ohio

This evolution moves Ohio to a fully integrated dual-eligible special needs plan (FIDE-SNP) model that seeks to achieve several key goals through a population-based health approach designed to address inequities and disparities in care for dual-eligible individuals. Examples include:

  • Improved Care Coordination: Strengthening integration between Medicare and Medicaid services to provide seamless, holistic care for individuals, thereby reducing fragmentation and ensuring comprehensive management of medical, behavioral, and social needs
  • Personalized Care: Applying data analytics and technology to create more tailored care plans, with a focus on proactive care to address the unique health needs of each individual, especially people with chronic conditions
  • Expanded Access to Services: Increasing accessibility, particularly through telehealth and digital tools, to reach underserved populations and improve accessibility, particularly for people living in rural or remote regions
  • Enhanced Quality of Care: Shifting focus from service volume to outcomes, encouraging providers to deliver high-quality care and improve patient satisfaction, while incentivizing preventive care to reduce hospital admissions and other high-cost interventions
  • Technology Integration: Leveraging advanced technologies like mobile apps, predictive analytics, and telemedicine to monitor patient health, improve communication between patients and providers, and deliver care more efficiently

The MyCare program currently is offered in 29 counties across Ohio but will transition to a statewide program as a part of the Next Generation changes. In addition, coordination only dual-eligible special needs plans (CO-DSNP) will no longer be permitted.

After the Ohio Department of Medicaid (ODM) publicly released the request for applications and evaluated submitted proposals, the agency selected four managed care organizations (MCOs), which will become the Next Generation MyCare plans. The ODM awarded contracts to the following MCOs that will serve MyCare members beginning in January 2026: Anthem Blue Cross and Blue Shield, Buckeye Health Plan, CareSource, and Molina HealthCare of Ohio.

Considerations for the Market

The shift to the FIDE-SNP model and selection of four participating health plans will have a considerable impact on the competitive landscape for Medicare and Medicaid managed care in Ohio. The resulting changes may affect both selected and non-selected participants in different ways, including:

  • Increased competition among MyCare MCOs: MCOs will need to focus on enhancing their care coordination systems, adopting new technologies, and developing personalized care plans to compete not just in terms of the volume of services provided, but also to the quality and effectiveness of healthcare delivery. Those plans that can best integrate services, offer proactive care management, and improve patient outcomes through value-based care and advanced technology initiatives will gain the competitive advantage, potentially attracting more beneficiaries.
  • Strategic responses of nonparticipating MCOs to counter potential membership and financial losses: MCOs that lose members because they were not selected or are unable to offer CO-DSNPs moving forward, will likely strategize to gain membership through other product lines or benefit design to offset losses. Strategies may vary but might include tactics such as: enhancing benefits or decreasing member cost sharing to entice member movement across carriers for non-D-SNP plans; finding innovative ways to further reach different segments of the Medicare population, such as Special Supplemental Benefits for the Chronically Ill (SSBCI) packages or Chronic Condition SNP plans; or shifting their focus to product lines outside of Medicare Advantage and Medicaid.

Connect with Us

Ohio is one of many states transitioning to a FIDE model beginning January 2026. Health Management Associates, Inc. (HMA), has successfully supported participating and nonparticipating carriers throughout the transition process and continues to be a dedicated partner to organizations navigating Medicare and Medicaid changes across the country.

Contact our featured experts below, to learn more about the Ohio FIDE-SNP initiative and HMA’s capabilities and expertise to support states, carriers, and other key partners with these transitions.

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Congress Continues Negotiations on 2025 Spending and End-of-Year Package

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This week, our In Focus section reviews the year-end legislative package congressional leaders announced as part of the stopgap funding to prevent a government shutdown. The package, which was unveiled December 18, 2024, would extend expiring Medicaid and Medicare policies, reauthorize health and human services programs, and extend federal funding for discretionary programs through March 14, 2025. The existing temporary funding measure expires December 20, 2024.

Following is a summary of several major healthcare policies that, if approved, will inform the shifting federal policy landscape and state and local programs in 2025.

Pharmacy Benefit Managers

The healthcare package includes policies that reflect several years of increased scrutiny on pharmacy benefit managers (PBMs), including:

  • Prohibiting PBMs from charging a Medicaid managed care organization more for a drug than the amount that a PBM pays a pharmacy (i.e., spread pricing)
  • Requiring consistency and additional transparency in contracts between Part D plans and PBMs
  • Prohibiting Medicare Part D plans from linking payments to drug list prices
  • Adding report requirements for PBMs

Medicaid Policies and Programs

The legislative text includes 13 separate sections that address Medicaid policies, including extensions on expiring policies, establishment of new programs, and plans to codify certain other policies related to Medicaid eligibility and renewals. These policy changes include:

  • Medicaid Disproportionate Share Hospital (DSH) allotment: Eliminates reductions for fiscal year (FY) 2025; delays the effective date of the two remaining years of Medicaid DSH allotment reductions until January 1, 2027; and changes the definition of the Medicaid shortfall component of the Medicaid DSH cap to include costs and payments for patients who have Medicaid as their primary source of coverage and for patients who are dually eligible for Medicare and Medicaid.
  • Home and community-based services (HCBS) waiver: Establishes a three-year, five-state Medicaid HCBS waiver program, which would allow states to cover these services for individuals who need them but do not meet the current statutory requirement of needing “institutional level of care.” States will have an opportunity to apply for planning grants.
  • Services for juveniles leaving public institutions: Delays by 12 months the requirement that state Medicaid programs provide screenings, diagnostic services, and targeted case management services for eligible juveniles within 30 days of their scheduled date of release from a public institution following adjudication.

Medicare Payments

The compromise package also increases the Medicare Physician Fee Schedule conversion factor by 2.5 percent in 2025 to partially offset a 2.83 percent cut that the Centers for Medicare & Medicaid Services (CMS) finalized in November. Providers consider this a short-term fix, however, and Congress, provider advocates, and other interested parties are engaged in discussions about making broader changes to Medicare physician pay in 2025.

Notably, the agreement includes a payment policy consistent with a bill that the House of Representatives passed earlier this year—the Lower Cost More Transparency Act—to provide enhanced information about payment differentials between off‐campus outpatient departments and other outpatient facilities. The provision requires each off-campus outpatient department to obtain and bill for services under a unique national provider identifier.

Other notable Medicare policies include:

  • Telehealth: Extends Medicare telehealth flexibilities through December 31, 2026; establishes special rules for telehealth services provided by Federally Qualified Health Centers and Rural Health Clinics for prospective payment and all-inclusive rates; adds modifiers for telehealth services provided incident-to other services and those offered via contracts with virtual platform vendors; expands services that can be provided via telehealth; and enhances tracking of telehealth use
  • Payment extensions: Extends the Medicare low-volume hospital payment adjustment and Medicare-dependent hospital program through December 31, 2025; Medicare ground ambulance add-on payments through December 31, 2026; incentive payments for advanced alternative payment models through payment year 2027 at an adjusted amount of 3.53 percent; and Qualifying Participant eligibility thresholds in effect for performance year 2023 through payment year 2027
  • Hospital at-home program: Extends the Acute Hospital Care at Home initiative through December 31, 2029
  • Part D: Prohibits cost sharing for generic drugs for Part D beneficiaries who are eligible for the low-income subsidy
  • Provider directories: Requires Medicare Advantage plans to maintain accurate provider directories on a public website beginning in plan year 2027
  • Screening: Adds multi-cancer early detection screening tests as a covered benefit beginning in 2029
  • Home infusion: Allows coverage of home infusion treatments by classifying certain approved infusion treatments as Durable Medical Equipment (DME)

Other Notable Provisions

  • Reauthorizes and revises the Second Chance Reauthorization Act of 2024, including allowing substance use disorder (SUD) services to be provided through the State and Local Reentry Demonstration Projects program
  • Reauthorizes and modernizes several aspects of child welfare programs
  • Provides mandatory funding for community health centers and the National Health Service Corps through FY2026, the Teaching Health Center Graduate Medical Education Program through FY2029, and the Special Diabetes Programs (SDP) for Type I diabetes and the SDP for Indians through FY2026
  • Reauthorizes through FY 2029 the SUPPORT for Patients and Communities Act, which includes a range of mental health and SUD prevention, treatment, and recovery programs
  • Reauthorizes Older Americans Act programs
  • Reauthorizes several programs and authorities related to preparedness and response through FY2026, including the Public Health Emergency Preparedness Program and the Hospital Preparedness Program

What’s Next

Funding for the federal government expires December 20, 2024. Congress will need to approve another temporary measure to avert a government shutdown. The length and scope of such an extension remains under discussion, though the current continuing resolution would push the funding deadline into the first few months of the incoming Trump Administration and new Congress. Healthcare stakeholders, including payers, state and local governments, providers, and community organizations, should continue to monitor the congressional negotiations and be prepared to analyze the impact of legislation that Congress ultimately approves.

Connect with Us

Health Management Associates, Inc. (HMA) experts will continue analyzing the implications of the funding and policy updates in the December 18 package and ongoing congressional discussions to reach an agreement. HMA’s experts have the depth of knowledge, experience, and subject matter expertise to assist organizations with navigating these changes and the impact for health and health adjacent sectors. Please contact Laura Pence and Andrea Maresca to connect with our experts.

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The Medicaid Section 1115 demonstration landscape: past trends and anticipated shifts

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This week’s In Focus section summarizes states’ Medicaid Section 1115 demonstration priorities over the last four years and highlights predicted changes coming with a new presidential administration. In the waning days of any presidency, regardless of party, reviewing and approving pending Section 1115 applications that reflect the current administration’s key policy initiatives is a priority for officials at the Centers for Medicare & Medicaid Services (CMS). 

Each administration has discretion over which Section 1115 demonstrations to encourage and approve. Though specific Medicaid priorities under the upcoming Trump Administration are still nascent, Health Management Associates, Inc. (HMA), federal, and state experts are monitoring these developments. This article describes a subset of the signature initiatives the Biden Administration permitted states to pursue in their Medicaid Section 1115 demonstrations and how the new administration could focus on different priorities, rescind existing guidance, or potentially withdraw already approved waivers. 

Overview of Biden-Era Section 1115 Demonstration Initiatives 

CMS-approved Section 1115 demonstrations permit alternative methods to improve the accessibility, coverage, financing, and delivery of healthcare services under joint federal-state funded programs, specifically Medicaid and the Children’s Health Insurance Program (CHIP). 

Addressing health disparities and promoting integrated care in Medicaid became a primary focus of the Biden Administration. In November 2023, CMS introduced a Medicaid and CHIP Health-Related Social Needs (HRSN) Framework, giving state Medicaid agencies the opportunity to address the broader social determinants of health (SDOH) that affect their enrollees, leading to better health outcomes. The new initiatives were not intended to replace other federal, state, and local social service programs, but rather to coordinate with those efforts. HRSN demonstration approvals to date include coverage of rent/temporary housing and utilities for up to six months and nutrition support (up to three meals per day), departing from longstanding prohibitions on payment of room and board in Medicaid. 

During the present administration, CMS also has provided novel opportunities for states to adopt strategies that promote continuity of Medicaid coverage, mainly through bolstering Section 1115 demonstrations to provide multiyear continuous eligibility for children. In addition, CMS released guidance in April 2023 so states could apply for a new Section 1115 demonstration opportunity to test transition-related strategies that support community reentry for incarcerated people who would otherwise be eligible for Medicaid or CHIP. 

The table and map below show the types of demonstrations approved and pending to date. We anticipate that incoming administration officials will closely examine the four demonstration initiatives outlined as they determine their own Medicaid policy agenda and priorities. Under President Biden’s Administration, nine states received federal approval for HRSN demonstrations under the new framework. Another 10 states have applications pending. 

Rescissions and renewals. Incoming Trump Administration officials technically could attempt to rescind some of the Section 1115 demonstrations approved during the Biden Administration. The Biden Administration unsuccessfully pursued with, a similar strategy for certain 1115 demonstration components approved during President-Elect Trump’s first term. Like the Biden Administration, the incoming Trump officials may choose not to renew demonstrations, even if the courts prevent them from rescinding approvals. 

Any signature Section 1115 policy is unlikely to emerge until the new administration’s policy officials are in place. There are, however, important insights to consider based on the first Trump Administration’s priorities and areas of common ground across the Biden and first Trump administrations. 

Signature 1115 initiatives. During President Trump’s first term, one signature Medicaid Section 1115 initiative allowed states to apply work requirements to some eligibility groups. CMS officials at that time also approved capped allotments for certain components of a state’s Medicaid program. Some states might consider revisiting these options with incoming administration officials. Two other key policy areas to watch following the transition include: 

  • The first Trump Administration approved a pilot program to test interventions addressing HRSNs in  North Carolina’s Medicaid 1115 demonstration program. Though the approved HRSNs were less expansive than the HRSN 1115 interventions later announced by the Biden Administration, this could be an area of common ground where the policy evolves and can be incorporated into discussions on other nascent initiatives. 
  • Multiple administrations, including the first Trump Administration, have prioritized Medicaid policies and demonstration initiatives to address substance use disorders (SUD) and, separately, reentry. The intersection of these issues can provide another area of common ground and opportunity to continue work on state reentry initiatives, though likely with new and modified parameters. 

Implementation Considerations 

Federal approval of Medicaid Section 1115 demonstration proposals is a critical milestone for states. Demonstration implementation also requires significant and ongoing leadership, resources, and collaboration between states and CMS and states and their partners. 

The type of state demonstration activity is expected to shift dramatically over the course of the new administration. For example, proposals may shift from expansions in coverage and benefits to reflect the new administration’s other priorities. States, too, may consider alternative approaches to Section 1115 demonstrations, such as state plan authorities like in lieu of services (ILOS), to pursue certain innovative approaches that they might otherwise have implemented with demonstration authority. 

Connect with Us 

HMA empowers states, providers, and other stakeholders to thrive in an ever-changing healthcare landscape. With deep expertise at every level, HMA teams support state Medicaid programs and stakeholder partners nationally to address a range of operational challenges, including designing innovative healthcare approaches to address urgent healthcare challenges, expanding coverage opportunities, and optimizing integration to address program efficiencies and improved “whole person” care.  

We have expertise in all of the components critical to developing Section 1115 programs—from the policy knowledge, to actuarial/budgeting talent, to communications and project management skills, as well as the necessary IT infrastructure. 

Contact our featured experts below to learn more about HMA’s capabilities and expertise. 

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MyCare Ohio: The Next Generation’s impact on the Ohio Medicare & Medicaid landscape

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The transition of MyCare Ohio to the Next Generation of its program on January 1, 2026, marks a significant evolution in the way Ohio provides healthcare services to its dual-eligible population – those who qualify for both Medicaid and Medicare services. This evolution moves Ohio to a Fully Integrated Dual Eligible Special Needs Plan model (FIDE SNP) that aims to achieve several key goals through a population health approach, designed to address inequities and disparities in care for dual-eligible individuals. These goals include:

  • Improved Care Coordination. Strengthening integration between Medicare and Medicaid services to provide seamless, holistic care for individuals, reducing fragmentation and ensuring comprehensive management of medical, behavioral, and social needs.
  • Personalized Care. Utilizing data analytics and technology to create more tailored care plans, with a focus on proactive care to address the unique health needs of each individual, especially those with chronic conditions.
  • Expanded Access to Services. Increasing accessibility, particularly through telehealth and digital tools, to reach underserved populations and improve convenience for patients, particularly those in rural or remote areas.
  • Enhanced Quality of Care. Shifting focus from service volume to outcomes, encouraging providers to deliver high-quality care and improve patient satisfaction, while incentivizing preventive care to reduce hospital admissions and other high-cost interventions.
  • Technology Integration. Leveraging advanced technologies like mobile apps, predictive analytics, and telemedicine to monitor patient health, improve communication between patients and providers, and enable more efficient care delivery.

The current MyCare program is offered in 29 counties across Ohio but will transition to a statewide program as a part of the Next Generation changes. Additionally, Coordination Only Dual Eligible Special Needs Plans (CO DSNP) will no longer be permitted.

After the Ohio Department of Medicaid (ODM) publicly released the request for applications (RFA) and evaluated submitted proposals, they selected four Managed Care Organization (MCOs) that will become the Next Generation MyCare plans. The ODM awarded the following MCOs to serve MyCare members beginning in January 2026: Anthem Blue Cross and Blue Shield, Buckeye Health Plan, CareSource, and Molina HealthCare of Ohio.

The shift to the FIDE SNP model and selection of four participating health plans will have a considerable impact on the competitive landscape for Medicare and Medicaid managed care in Ohio. The resulting changes can affect both selected and non-selected participants in different ways, including:

  • Increased competition among chosen MyCare MCOs. MCOs will need to focus on enhancing their care coordination systems, adopting new technologies, and developing personalized care plans to compete not just on the volume of services provided but also on the quality and effectiveness of care. Those who can best integrate services, offer proactive care management, and improve patient outcomes through value-based care and advanced technology initiatives will gain the competitive advantage, potentially attracting more beneficiaries.
  • Strategic responses of nonparticipating MCOs to counter potential membership and financial losses. MCOs that lose membership by not being selected, or are unable to offer CO DSNPs moving forward, will likely strategize how to gain membership through other product lines or benefit design to offset losses. Strategies may vary but could include tactics such as enhancing benefits or decreasing member cost shares to entice member movement across carriers for non-DSNP plans; finding innovative ways to further reach different segments within the Medicare population, such as Value Based Insurance Design (VBID) packages or Chronic SNP plays; or shifting focus to product lines outside of Medicare Advantage and Medicaid.

Ohio is one of many states transitioning to a FIDE model beginning January 2026. Health Management Associates (HMA) has successfully supported participating and non-participating carriers throughout the transition process and continues to be a dedicated partner to organizations navigating Medicare and Medicaid changes across the country.  Contact one of HMA’s many experts for more details on how to navigate this evolution in health care.

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Major changes to Medicare Advantage and Part D proposed by CMS for 2026

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This week’s In Focus section examines a comprehensive proposed rule that the Centers for Medicare & Medicaid Services (CMS) released on November 26, 2024. These highly anticipated regulations—which represent the last major Medicare regulations from the Biden Administration—include several significant and far-reaching proposals designed to strengthen plan oversight and enhance beneficiary protections for millions of Medicare beneficiaries who have coverage through Medicare Advantage and Medicare Part D plans beginning in contract year 2026. The rule also comprises proposals with fiscal and policy implications for state Medicaid programs.

Comments on the proposed rule are due by January 27, 2025, and the incoming Trump Administration could make significant changes before finalization. New administration officials may choose to delay certain provisions, scale back, or eliminate certain proposed policy changes when they finalize the regulations next year.

This article explains several of the proposed policies, considerations for healthcare stakeholders, and developments that Health Management Associates (HMA) experts will be tracking in the coming weeks.

Coverage of Anti-Obesity Medications Under Medicare Part D and Medicaid

In the proposed regulations, CMS seeks to expand coverage of anti-obesity medications (AOMs) under the Medicare Part D and Medicaid programs. Under current Medicare Part D coverage rules, medications used exclusively for weight loss are excluded from the definition of a Part D covered drug. Through the proposed change, CMS is seeking to align Medicare and Medicaid coverage policy with the prevailing medical consensus that recognizes obesity as a chronic disease.

Under the proposed reinterpretation, CMS would expand eligibility for Part D coverage of AOMs for Medicare beneficiaries with obesity. AOMs used for weight loss or chronic weight management would continue to be excluded from Part D coverage under the proposed regulation.

As it relates to Medicaid, CMS’s proposed reinterpretation would require Medicaid coverage for anti-obesity medications when used for weight loss or chronic weight management for the treatment of obesity. State Medicaid programs would continue to have discretion to use preferred drug lists and prior authorization (PA) to establish certain limitations on the coverage of these drugs, consistent with existing statutory requirements.

CMS estimates the proposal would increase federal costs by $24.8 billion as the result of expanded Part D coverage and $14.8 billion because of expanded Medicaid coverage over a 10-year period.

Key considerations: Though expanded access to innovative medications may improve access and outcomes for obese patients, these considerations may need to be balanced against the proposal’s considerable fiscal costs. In addition, key health nominees put forth by President-Elect Donald J. Trump have different views about how best to prevent and treat chronic disease, creating additional uncertainty about whether this proposed expansion will go forward.

Strengthening Prior Authorization and Utilization Management Guardrails

The proposed rule includes a series of recommendations for reforming Medicare Advantage PA, utilization management (UM), and coverage decisions, which include:

  • Defining the meaning of internal coverage criteria to clarify when MA plans may apply UM
  • Ensuring MA plans’ internal coverage policies are transparent and readily available to the public
  • Requiring plans to inform beneficiaries of their appeal rights
  • Revising the current metrics for the annual health equity analysis on the use of PA to require more detailed and granular reporting to allow CMS to determine whether MA plans disproportionately deny certain services

Key considerations: Continued scrutiny of MA plans’ PA practices and strong bipartisan support for reforms increase the likelihood that certain changes will be made to these policies within the next year.

Enhancing Medicare Plan Finder to Include Information on Plan Provider Directories

Another notable proposal would require MA plans to make provider directory data available to CMS for inclusion in Medicare Plan Finder (MPF), the online tool that allows beneficiaries to compare coverage options, including Medicare Advantage and Part D plans. At present, provider directories must be accessible on MA plans websites.

CMS seeks to enhance MPF with searchable provider information for all MA plans while requiring plans to attest to the accuracy of the provider directory data, including updating data within 30 days of receiving notification that provider information has changed. CMS would ensure compliance with this expectation by requiring plans to meet data compliance and quality checks, which will be detailed in upcoming technical guidance.

Improving Access to Behavioral Health Care

The proposed rule furthers federal policymakers’ initiatives to address the nation’s behavioral health crisis. CMS proposes to establish the following three standards to ensure that beneficiary cost sharing in Medicare Advantage is no greater than in Traditional Medicare:

  • A 20 percent coinsurance or an actuarially equivalent copayment rate for mental health specialty services, psychiatric services, partial hospitalization, and outpatient substance abuse services
  • No cost sharing for opioid treatment programs
  • All (100 percent) of the estimated Traditional Medicare cost sharing for inpatient psychiatric services

Improve Oversight and Administration of Supplemental Benefits

MA plans may offer a variety of supplemental benefits such as vision, dental, and gym memberships, which have come under increasing scrutiny by CMS. CMS proposed several actions to reduce misuse of these benefits, including:

  • Outlining proper usage by MA organizations and enrollees
  • Adding disclosure rules for transparency
  • Ensuring enrollees can access covered services through alternative methods
  • Requiring real-time electronic links between debit cards and covered services
  • Defining acceptable over-the-counter products.

Key Considerations: CMS officials in President-Elect Trump’s first administration expanded flexibility for plans to offer supplemental benefits. Incoming policy officials may seek an opportunity to fully review the Biden Administration’s proposals. Data and experience-informed comments from MA plans and stakeholders can support such discussions.

Improve Care Experience for Dual Eligibles

CMS proposed the following two new federal requirements for Dual Eligible Special Needs Plans (D-SNPs) that are applicable integrated plans (AIPs):

  • AIP D-SNPs will need to have integrated member ID cards for their Medicare and Medicaid plans.
  • D-SNPs will be required to conduct an integrated health risk assessment for Medicare and Medicaid, rather than separate ones for each program.

Key Considerations: These proposals further CMS’s multi-year work to advance integrated care by applying Medicare-Medicaid Plan features into D-SNP requirements. States and MA and Medicaid plans should plan for operational and policy changes if the proposals are finalized.

Formulary Inclusion and Placement of Generics and Biosimilars

CMS proposes to require Part D formularies to provide beneficiaries with broad access to generic, biosimilar, and other low-cost drugs while also ensuring that tier placement and UM practices do not limit access to these drugs as compared with more expensive brand name and reference products.

Key considerations: If finalized, the proposal would require MA-PD and Part D plans to update their approach and considerations for plan formulary development. Consumer groups and other stakeholders should consider the possibility that the proposal will improve access to lower cost products.

Other Topics in the Proposed Rule

In addition, the proposed rule calls for the following:

  • Guardrails for artificial intelligence to protect access to health services, such as requiring that MA plans ensure services are provided equitably, regardless of delivery method or origin (i.e., human or automated systems)
  • Changes to MA and Part D medical loss ratio (MLR) reporting to improve the meaningfulness and comparability of MLR across plan contracts
  • Expanded Part D medication therapy management eligibility criteria
  • Adding and updating measures addressed in this proposed rule, beginning with the 2028 Star Ratings
  • Promoting community-based services and enhancing transparency of in-home service providers, including new definitions and standards for community-based organizations
  • Codifying existing guidance related to implementation of the Medicare Prescription Payment Plan, which is part of the Inflation Reduction Act (IRA)

What to Watch

During the lame duck session, Congress could advance legislation related to some proposals in this rule. Specifically, PA has been an area of significant bipartisan interest, along with access to and cost of GLP-1 products. CMS will need to ensure the final MA and Part D policy and technical rule for contract year 2026 reflects approved statutory changes.

In addition, HMA is watching key appointments within the US Department of Health and Human Services, including individuals selected to lead CMS’ Medicare and Medicaid centers. These appointments will provide valuable insights on the emerging policy agenda of the incoming administration.

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HMA’s Medicare and Medicaid experts will continue to assess and analyze the policy and political landscape, which will determine the final policies in the MA and Part D policy and technical rule for contract year 2026. HMA’s experts have the depth of knowledge, experience, and subject matter expertise to assist organizations that engage in the rulemaking process and to support implementation of final policies, including policy development, tailored analysis, and modeling capabilities, as well as quality improvement initiatives and plan benefit design.

For further analysis of the MA and Part D proposed rule and potential impact on MA and Part D plans, Medicaid programs, providers, and beneficiaries, contact our featured experts below.

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Insights into federal approval of Medicaid-covered traditional healing to improve culturally relevant care for AI/AN populations

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This week’s In Focus section reviews new state initiatives to cover traditional healing services through Medicaid for American Indian/Alaska Native (AI/AN) individuals and communities. 

Overview 

In October 2024, The Centers for Medicare & Medicaid Services (CMS) approved Medicaid Section 1115 demonstration amendments for Arizona, California, New Mexico, and Oregon, allowing Medicaid and Children’s Health Insurance Program (CHIP) coverage of traditional healing services delivered at or through Indian Health Service facilities, Tribal facilities, and urban Indian organizations (I/T/U facilities). 

This demonstration approval enables state Medicaid agencies to acknowledge traditional healthcare practices as important components of the wellness continuum of care for Native American populations. Medicaid funding will help strengthen and expand access to these services and support integration of these services into primary care, substance use disorder (SUD) treatment, and other behavioral health care in a way that I/T/U providers have designed and developed to meet the unique needs of their community. 

Demonstrations for Arizona and Oregon are approved through September 30, 2027, New Mexico’s demonstration is authorized through December 31, 2029, and California’s through December 31, 2026. 

Traditional Health Services: Providing Culturally Relevant Care 

AI/AN populations generally experience worse health disparities compared with non-AI/AN populations, particularly in terms of obesity, diabetes, tobacco addiction, and cancer. AI/AN populations also face higher rates of mental health disorders, SUDs, and suicide. 

Using Transformed Medicaid Statistical Information System (T-MSIS) claims and demographics data, Health Management Associates, Inc. (HMA), staff assessed the incidence of specific chronic diseases in the Native American and non-Native American population in the four states approved to cover traditional healing services through their Medicaid program. For example, in these states, the prevalence of diabetes in AI/AN populations ranged from 27 percent to 87 percent higher than among non-AI/AN groups. Figure 1 shows the percentage of three chronic conditions among these groups in the four states. 

Figure 1. Percentage of AI/AN vs. Non-AI/AN Medicaid Beneficiaries Living with Chronic Conditions in AZ, CA, NM, and OR (2022) 

Source: HMA analysis of 2022 T-MSIS (Transformed Medicaid Statistical Information System)

The demonstration approval is expected to improve access to culturally appropriate healthcare to address these disparities in chronic conditions for Tribal communities. Traditional healthcare practices vary widely across the 574 federally recognized Tribes in the United States, and many see traditional healthcare practices as a fundamental element of well-being that can help patients with specific physical and behavioral health conditions. For example, commonly offered traditional practices in Native American communities include talking circles, sweat lodges, and smudging. Studies show that incorporating traditional healthcare practices may improve mental health symptoms, outcomes, and quality of life, including among individuals with SUD. 

Considerations for Key Partners 

AZ, CA, NM, and OR are the first states to receive federal approval and will lay the groundwork for integrating time-honored healing practices into their Medicaid systems. They also could serve as a model for other states that choose to pursue this demonstration. I/T/Us were integral to shaping the demonstration design and are poised to continue shaping the program details and implementation of traditional approaches to care into their Medicaid systems. 

HMA experts identified some key considerations for partners, such as states and Medicaid managed care organizations (MCOs), to follow as these services are incorporated into Medicaid: 

  • Collaborate with I/T/U facilities and communities. Traditional healing practices are sacred and ceremonial, so flexibility will be essential in determining how Medicaid funding can be best allocated to support providers who offer traditional practices. Communities will be critical in helping identify the specific traditional healing practices that are needed. 
  • Support operational changes needed in I/T/U facilities. Compliant and efficient billing practices will be essential to the success of the demonstrations. States can support I/T/U facilities to develop necessary trainings, workflows, and administrative processes. For example, the provider qualification criteria and implementation is central to meeting federal compliance and reporting requirements. Facilities also will need to meet Medicaid billing requirements to collect 100 percent of the federal medical assistance percentage (FMAP). 
  • Partner with I/T/U facilities. To facilitate proper care coordination, states, health plans, and non-I/T/U providers should partner with I/T/U facilities to ensure patients experience the best health outcomes. 

 Connect With Us 

HMA has learned the value and importance of working with Native American and Alaska Native populations and respecting their unique approaches to improving healthcare. HMA has expertise on healthcare issues that uniquely affect AI/AN populations and is experienced in addressing these challenges through AI/AN leadership and engagement that is culturally sensitive and respectful. Our experience working directly with Tribes encompasses extensive and applicable knowledge of healthcare operations in rural and urban settings to support infrastructure needs, including data management, IT, staffing, policies and procedures, training, and eligibility and enrollment processes. 

Contact our featured expert below to learn more about HMA’s work to support Native American and Alaska Native communities. 

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Health policy priorities on the table: Understanding the post-election landscape for Marketplace, Medicaid, and Medicare programs

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This week’s In Focus section addresses post-election implications and initial considerations for understanding President-Elect Donald J. Trump’s possible federal healthcare policy agenda. Though healthcare was not the highest priority campaign issue, the president-elect and his team have signaled the policy agenda could include changes to the Affordable Care Act (ACA), Medicaid, and the nation’s public health programs. 

Additionally, President Trump’s first term policy agenda and how these policies fared, provide critical insights into the policy direction for his second term, including policies on Medicare drug pricing, ACA marketplaces, and interoperability. Also vital to understanding and planning for a second term will be the appointees to key healthcare positions at the Department of Health and Human Services and in the White House. 

Policy officials and specific policy agendas are still nascent, and Health Management Associates, Inc., federal and state experts are continuing to monitor these developments. The remainder of this article focuses on a few key considerations for the Marketplace, Medicaid, and Medicare healthcare insurance programs heading into 2025. 

ACA Marketplace Issues to Watch 

President-Elect Trump signaled he is uninterested in revisiting a legislative initiative to repeal and replace the ACA. However, one of the major defining issues facing the president-elect and the next Congress is the temporary policy providing enhanced tax credits that lower ACA premiums, which expires at the end of 2025. This and other tax policies are very likely to be on the table, particularly as budget reconciliation is an available tool in unified government. 

Key considerations for healthcare stakeholders regarding the subsidy policy and federal funding for Marketplace outreach and education programs include: 

  • The Congressional Budget Office (CBO) estimates that extending the present enhanced subsidy policies would cost more than $300 billion over 10 years. The CBO also reports that ACA marketplace enrollment would drop from 22.8 million in 2025 to 18.9 million in 2026 if the subsidy policy is not renewed. 
  • The loss of subsidies would increase the number of uninsured individuals in the United States, but the size of the increase would depend on the state-specific landscape. For example, states that have not adopted the ACA’s Medicaid expansion for adults are expected to have a higher increase relative to states that have more expansive Medicaid eligibility. One potential approach is for lawmakers to modify the enhanced subsidy policy, rather than let it expire entirely.  
  • Marketplace plans should be prepared for a change in the acuity mix of enrollees while providers should expect a change in their payer mix, with more uninsured individuals in states that have not expanded Medicaid. 

Federal and state policymakers may pursue a combination of alternatives to fill gaps in access to healthcare coverage and services. For example, the president-elect and incoming congressional leaders may focus on alternative coverage options and other state-driven reforms to Marketplace programs. Alternatives that could become part of the regulatory policy agenda include: 

  • Supporting association health plans (AHPs) and high-risk pools 
  • Reverting to a federal regulatory environment that supports short-term limited-duration healthcare insurance (STLDI) plans 
  • Approving Section 1332 waivers to allow state-designed programs 

Medicaid Policy Outlook 

During Mr. Trump’s first term, one of his administration’s signature Medicaid initiatives was approving Section 1115 demonstrations that allowed states to apply work requirements to certain populations, including adult expansion populations. The first Trump Administration also revised the demonstration parameters for Section 1115 Institutions for Mental Disease (IMD), allowed coverage lockout for beneficiary noncompliance with premium payments, and approved a pilot program to test interventions addressing health-related social needs (HRSNs). 

Key considerations for healthcare stakeholders regarding Medicaid flexibilities and funding include: 

  • Officials in the first Trump Administration approved North Carolina’s Medicaid 1115 demonstration program to address HRSNs. President Biden’s Administration expanded these policies and approved demonstrations in more than 10 states, with additional state applications pending. Incoming officials may maintain the overall policy direction  with regard to HRSNs. However, they could pivot to narrow the scope of future state HRSN proposals. Another approach could include directing states to use in lieu of services (ILOS) authority in managed care delivery systems to address HRSN.  
  • During President-Elect Trump’s first term, Centers for Medicare & Medicaid Services (CMS) officials prioritized work requirements and capped allotments for certain components of a state’s Medicaid program. Some states might consider revisiting these options, with modifications. If this policy direction is refreshed, federal and state officials would benefit from the foundational work conducted during the first term. 
  • New CMS officials could prioritize work on transparency in Medicaid financing and reimbursement to providers. Federal officials, regardless of political affiliation, historically have sought to improve their understanding of the flow of Medicaid funding. Incoming officials could prioritize this issue again, which would have a varied effect on health plans and providers. 

Medicare Priorities: 

Relative to Marketplace and Medicaid, first term Trump Medicare policies were advanced with less conflict. Notable policy initiatives included a focus on healthcare-related challenges in rural communities, improving transparency, and reducing provider burden —all of which were also cross-cutting issues that encompassed policy work beyond Medicare and could continue to be central to the next Medicare policy agenda.  

Key considerations for healthcare stakeholders regarding Medicare policy are as follows: 

  • The president-elect’s first term approach to Medicare Advantage (MA) plans sought to maximize enrollment in MA and encourage innovation and value-based design. It’s reasonable to expect second term CMS officials to maintain an overall favorable approach to MA too. Incoming officials could narrow their scrutiny of MA plans to bipartisan concerns, for example MA plans’ prior authorization policies. 
  • While improving outcomes for dually eligibles beneficiaries generally is a bipartisan issue, state agencies, MA and Medicaid managed care plans, and other interested stakeholders should monitor the incoming Administration’s policy agenda for dually enrolled beneficiaries in Medicare and Medicaid. During the Biden Administration, CMS issued final rules for Medicare Advantage Dual Eligible Special Needs Plans (D-SNPs) to improve integration for the Medicare-Medicaid dually eligible population., Incoming Trump officials could revisit the approach, including the breadth of requirements and compliance timelines.  
  • During his first term, President Trump was highly engaged in elevating concerns about prescription drug prices and HHS and CMS announced models and policies to lower drug prices for patients. In his second term, however, the President could seek to rein in certain aspects of the Inflation Reduction Act (IRA), while revisiting some of his prior proposals. 

What to Watch 

The incoming Administration and its transition team are moving expeditiously to nominate new Cabinet Secretaries and to identify key staffers. The individuals appointed to departmental, agency, and advisory leadership positions will have significant leeway in shaping the federal and state healthcare policy landscapes – determining which existing policies to review and potentially revise, new policies to develop, and the approach to working with state and local officials and stakeholders. This includes the Secretary of Health and Human Services, CMS Administrator, Director of the Centers for Disease Control and Prevention, Food and Drug Administration Commissioner, and Director of the National Institutes of Health, all of which require Senate confirmation. Additionally, healthcare stakeholders should continue to monitor the leadership races for the House and Senate and the primary congressional committees with jurisdiction over healthcare programs. These leaders will be key to a second term Trump legislative policy agenda. 

Connect with Us 

This article focuses in on a subset of issues within Marketplace, Medicaid, and Medicare and in the overall healthcare sector. Our 2024 Political Checkpoint webinar features our experts discussing these and other insights on the election results. They provided an overview of what to expect from Congress and the Administration, focusing on key legislative priorities and executive actions.  

Join us for our next two webinars in the series exploring the election results:  

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Webinar Replay: 2024 Political Checkpoint

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This webinar was held on November 12, 2024.

In the 2024 Political Checkpoint hosted by Leavitt Partners, an HMA company, we explored up-to-the-minute insights on the election results, discussed both confirmed outcomes and remaining uncertainties, along with the mandate for change that has emerged. Our expert panelists provided an overview of what to expect from Congress and the Administration, focusing on key legislative priorities and executive actions, and shared their prediction for what to watch over the first 100 days:

2024 Wrap Up
Lame duck session in Congress, end of year regulatory action

A New President
Implementing campaign promises through appointments

2025 Policy Agendas
Where committees, agencies may set their sights

Key Issues
Healthcare priorities that could see the spotlight

Ready to talk?