Health Care Matters | January 31, 2025

Written By Andrew Petee

Health Policy Tracker: Trump’s First 100 Days

The Future of Health Policy

Health Affairs has introduced a new collection of commentary articles in 2025 from the National Academy of Medicine’s Vital Directions for Health and Health Care project, providing actionable items for the second Donald Trump presidential administration to enhance health outcomes for all Americans. Additionally, Health Affairs Forefront has launched a featured topic, “Health Policy at a Crossroads,” which will offer timely analysis of significant regulatory, legislative, and judicial developments in health policy under the Trump-Vance Administration and the 119th Congress. Read more here:

Executive Orders Reshaping Health Policy

President Trump continues to issue a flurry of executive orders directed at federal aid which have far reaching impacts on health policy. For insight on these actions and their potential impacts, read the following: 

Senate Questions RFK Jr.'s Health Leadership

Two Senate committees will question Robert F. Kennedy Jr., this week on how his disproven views of science and medicine qualify him to run the $1.7 trillion, 80,000-employee federal health system. Read more here: 

 

Medicaid, ACA Cuts Could Devastate Hospitals, Execs Warn

As reported by several sources, including KFF and Stat, experts are speculating on the potential impact of the Trump administration’s policy changes on Medicaid coverage, payment structures, and patient access. This week, Modern Healthcare highlighted concerns about proposed cuts to Medicaid and Affordable Care Act (ACA) funding, which could significantly affect health systems and hospitals. These proposed reductions are raising alarms that they could lead to service cuts and even hospital closures. The goal of limiting spending could result in more Americans losing insurance coverage and an increase in uncompensated care costs, further narrowing hospital margins.

In response, health systems are bracing for these cuts by planning to reduce operating expenses, exploring mergers and partnerships, focusing on commercially insured services, strengthening employer-led contracting, and adding staff to assist patients in finding insurance coverage. However, many hospitals with already thin or negative margins may not have the resources to absorb the impact of a growing uninsured population. Read here.

 

Why It Matters

Drastic cuts to Medicaid funding are exacerbating challenges hospitals are facing, particularly those operating on thin or negative margins or in rural areas. The American Hospital Association (AHA) reports that over half of hospitals were operating at a financial loss at the end of 2022, with negative operating margins continuing into 2023. These hospitals are already grappling with financial instability, workforce shortages, and the burden of providing care to uninsured and underinsured populations. The proposed reductions in Medicaid and Affordable Care Act (ACA) funding threaten to deepen these issues, potentially leading to service reductions and even hospital closures.

Safety net hospitals, which make up about 5% of all U.S. hospitals but provide over 25% of the nation’s charity care, are particularly at risk. These hospitals often operate with thin margins and face high levels of uncompensated care due to coverage gaps. For hospitals with already precarious financial situations, the loss of Medicaid funding could be devastating. Expect strong advocacy efforts by hospital trade groups as the GOP-led congress explores Medicaid cuts to off-set the costs of expiring tax cuts.

 

HHS Announces 15 Additional Drugs Selected for Medicare Drug Price Negotiations in Continued Effort to Lower Prescription Drug Costs for Seniors

On January 17, the Biden administration announced the next 15 drugs targeted for price negotiation, including Ozempic and Wegovy. This effort aims to build on the success of the last round of price negotiations, lowering prescription drug costs for seniors. Negotiations with drug companies would occur in 2025 with new prices taking effect in 2027, meaning it will be up to the Trump administration to implement them. This announcement comes on the heels of the proposed coverage of GLP-1s in the Medicare Advantage (MA) and Part D rule, reflecting a broader effort to make these medications more accessible and affordable. Read more here and here.

 

Why It Matters

This announcement is significant as it aims to make drug prices more affordable for seniors, which is a major concern for many Americans. However, the future of this policy is up in the air with the recent change in administration. President Trump has already rolled back Biden-era health policies, including some related to drug prices. While the Trump administration has historically supported lowering prescription drug costs, they have shown a tendency to favor market-based solutions over direct government intervention in drug pricing. As Modern Healthcare reports, lawmakers are urging Trump to move forward with price negotiations but it remains to be seen how the new administration will respond to increasing pressure from the pharmaceutical industry. Some experts, published in Stat, are suggesting the Trump administration may make changes to the negotiation program like setting price floors.

Finalization of the Medicare Advantage and Part D rule also falls to the new administration, which includes provisions for the coverage of GLP-1s. Taken together, these efforts and the new administration’s actions will have far-reaching impacts on the millions of seniors who rely on these drugs.

 

What We Are Reading

Dogs Paired With Providers at Hospitals Help Ease Staff and Patient Stress

Coral’s love of canines is back to bring some light and levity to the news cycle. In Colorado hospitals, therapy dogs are providing much-needed comfort to doctors and nurses battling burnout, proving that sometimes the best medicine has four legs and a wagging tail. Read here.

 

What we are listening to

Tradeoffs: Why Many Republicans Think Shrinking Medicaid Will Make it Better

With President Trump’s inauguration last week, Republicans are officially in control in Washington. Congressional leaders are looking to make big reductions to federal spending, and they’ve singled out Medicaid as a program where they could find lots of savings. Tradeoffs takes a closer look at why this administration thinks less Medicaid will mean better Medicaid. Listen here.

 

What We Are Digesting

Comments on the CY 2026 Medicare Advantage (MA) and Part D Proposed Rule

Comments were due this week on the proposed rule for policy and technical changes to the Medicare Advantage (MA) and Part D programs in contract year (CY) 2026. Some of the key takeaways from this proposed rule include new guidance on the use of inappropriate prior authorization, expanded access to GLP-1s to treat obesity, additional guardrails to curtail misleading marketing practices and changes to the medical loss ratio (MLR) calculation to align MA plans with Medicaid managed care organizations and commercial plans.

The Trump administration has placed a regulatory freeze pending review and may make some changes to strategy for these programs. In the interim, we’re taking a moment to read some of the publicly published comment letters:

 
 

Where We Are Going

Scaling What Works for Better Health – PCC Conference 2025

Save the date! Join the Primary Care Collaborative (PCC) and leaders from across the health care landscape on June 4-5 at the Capital Hilton in Washington, DC, for compelling conversations exploring how innovative new approaches to primary care delivery and payment can be successfully scaled. Registration opens soon. Click here to learn more.

 
 

Podcast Spotlight

The ACO Agenda: Preparing for Policy Changes and Operational Success with Noah Champagne and Cory Gusland

Listen Now

Andrew Petee
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