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More Fallout From Budget Reconciliation

The saga over the House reconciliation bill and what the Senate will do continues.

Republicans in swing or moderate districts returned home to town halls with tough questions from their constituents about Medicaid and other social service cuts as well as the fact that deficits will increase under the bill.

A healthcare policy group KFF issue briefer allocates the Congressional Budget Office’s federal spending reductions and enrollment losses across the states. The CBO’s latest cost estimates say the bill would reduce federal Medicaid spending by $723 billion over the decade timeframe and that the number of uninsured would increase by 7.6 million due to those cuts.

KFF finds that the biggest reduction areas in Medicaid are:

• Mandating that adults who are eligible for Medicaid through the ACA expansion meet work and reporting requirements ($280 billion)
• Repealing the Biden Administration’s rule simplifying Medicaid eligibility and renewal processes ($167 billion)
• Establishing a moratorium on new or increased provider taxes ($89 billion)
• Revising the payment limit for state directed payments ($73 billion)
• Increasing the frequency of eligibility redeterminations for the ACA expansion group ($53 billion).

Federal cuts to states represent 11% of federal spending on Medicaid over the period. By state, the cuts range from 5% in Wyoming, Alabama, and Wisconsin to 15% in Washington, Louisiana, and Illinois. Great graphics show enrollment losses by states, but states could react differently.

A Health Affairs Forefront blog discusses the bill, especially impacts on dual eligibles and expiring enhanced premium subsidies.

A Modern Healthcare article about an Urban Institute and Robert Wood Johnson analysis says Medicaid is cut by over $700 billion and the Exchanges by over $100 billion (most of which is the expiring enhanced premium subsidies). About 4.2 million people will leave the Exchanges due to the enhanced subsidies expiring. The researchers say providers would be on the hook for $278 billion in uncompensated care for newly uninsured people.

Additional articles: https://www.kff.org/medicaid/issue-brief/allocating-cbos-estimates-of-federal-medicaid-spending-reductions-and-enrollment-loss-across-the-states/ and https://www.healthaffairs.org/content/forefront/big-republican-cost-shift-massive-cuts-medicaid-and-aca-increase-costs-older-adults-and and https://www.modernhealthcare.com/politics-policy/one-big-beautiful-bill-act-2025-obamacare-aca

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #medicaid #exchanges #spending #coverage

https://thehill.com/homenews/house/5325547-republicans-trump-big-beautiful-bill-town-halls

FDA Commissioner Says Cost-Cutting Could Hurt Generic Introductions

President Trump’s first Food and Drug Administration (FDA) Commissioner, Scott Gottlieb, made a great point in an opinion piece at statnews.com.  Gottlieb says that Trump did a tremendous job introducing generics swiftly under his first few years in office. Reductions at FDA now could be a boon for brand drug makers as generic approvals will be further backlogged and allow brand makers to effectively maintain a monopoly after patents expire.

(Article may require a subscription.)

#drugpricing #generics #brands #branddrugmakers #fda

https://www.statnews.com/2025/05/28/fda-division-policy-development-generic-drugs-doge-cost-cutting-trump-glp-1s/

Study Shows Proliferation Of GLP-1s

A new study finds that the number of people prescribed GLP-1 drugs for weight management has skyrocketed over the past five years. FAIR Health’s study finds that just over 2% of adults in the U.S. took a GLP-1 to treat obesity or being overweight in 2024, up from just 0.3% in 2019. For those not diabetic, the percent of such adults increased from 0.03% in 2019 to 0.67% in 2019, or 1,960.9%.

While big national providers have sought to expand GLP-1 coverage while de-risking impacts, other plans are discontinuing coverage due to surging costs. A number of Blues are discontinuing obesity-only GLP-1 coverage.

In other news, compounders continue filling compounded GLP-1 drugs by arguing individual formulations are allowable.

Additional article: https://www.modernhealthcare.com/insurance/bcbs-plans-michigan-massachusetts-glp1-coverage and https://www.healthcaredive.com/news/glp1-obesity-weight-loss-adoption-fair-health/748963/ and https://insidehealthpolicy.com/inside-drug-pricing-daily-news/telehealth-companies-use-loophole-continue-glp-1-sales

(Some articles may require a subscription.)

#weightlossdrugs #glp1s #healthplans #pbms #drugpricing #branddrugmakers

https://www.fiercehealthcare.com/payers/fair-health-heres-how-much-glp-1-prescriptions-obesity-overweight-have-grown-2019

Senate Conservatives Want Deep Cuts

Conservative senators are arguing that huge new spending cuts need to be added to the budget reconciliation bill if they are to vote for the package. One lawmaker called the bill a “debt bomb.” At least four senators on the right have raised issues with the long-term implications of more debt and deficits. Deficits will grow from $2.2 trillion a year in FFY 2025 to more than $2.5 trillion in FFY 2035. Many want a return to pre-pandemic levels of spending. The Senate problem is a group of moderates who could sink the bill want fewer Medicaid cuts.

Also, a good article on the provider tax reductions and impacts on states and providers. And a good article talking about impacts to younger Americans of losing Medicaid.

Additional article: https://stateline.org/2025/05/27/republicans-target-a-tax-that-keeps-state-medicaid-programs-running/ and https://www.healthcaredive.com/news/medicaid-cuts-impact-young-adults-urban-institute/749030/

#budgetreconciliation #trump #congress #medicaid #coverage

https://thehill.com/homenews/senate/5316940-trump-bill-fiscal-concerns-republicans

More Data Needed On Medicare Advantage Payments

While the authors of a Health Affairs Forefront blog appear to be sympathetic to charges that Medicare Advantage (MA) is considerably overpaid, they do admit that more data needs to be shared in order to conclude what many academics find with faulty data.

They note that MA now costs about 14% of federal outlays and is projected to grow to 18% by 2034. They repeat the dubious statistic that payments to MA plans exceed by 20% what Medicare would spend in the traditional program.

But the authors do note that none of the relevant agencies (the Congressional Budget Office, the Office of Management and Budget, the Medicare Payment Advisory Commission, the Medicare Trustees, or the Centers for Medicare and Medicaid Services Office of the Actuary) has released public assessments of what Medicare spending would be now or in the future, adjusted for health risk and differences in coding practices. They also note that assessments must take into account a variety of dynamic and interacting variables, including demographics and health status, selection, coding practices, and quality bonuses, among others.

I note that any number of studies point to the positive effect MA penetration has on FFS costs in certain areas.

(Article may require a subscription.)

#medicareadvantage #overpayments #riskadjustment

https://www.healthaffairs.org/content/forefront/policymakers-need-data-budgetary-impact-medicare-advantage-growth

Senate GOP Looking To Change House Budget Reconciliation Bill

Senate Republicans say they’re going to rewrite the 1,116-page budget reconciliation bill the House passed on a tight vote. House Speaker Mike Johnson, R-LA, says the Senate needs to be judicious and make minimal changes to avoid another showdown in the House that could sink the bill. But Senate Majority Leader John Thune, R-SD, said his body will definitely have an imprint on the bill. The Senate is generally far more independent than the House.

The ideological split we saw in the House is now emerging in the Senate. Rightist Rand Paul, R-KY, will vote against the bill given the provision that increases the debt limit dramatically. Conservatives Ron Johnson, R-WI, Rick Scott, R-FL, and Mike Lee, R-UT, argue much deeper cuts need to occur. Johnson says the bill has a $2.2 trillion deficit on average each year and the bill should target greater reductions. This is an increase from a projected deficit in federal fiscal year 2025 of $1.9 trillion. They also want deeper Medicaid cuts and structural changes, such as state matching fund reductions.

On the other hand, moderates and pragmatic conservatives Josh Hawley, R-MO, Susan Collins, R-ME, Lisa Murkowski, R-AK, and Jerry Moran, R-KS, are threatening to oppose Medicaid reforms that would cut benefits. They worry, too, about impacts on state budgets and providers.

As you can see there are at least four votes on each side of the ideological spectrum that could sink the House bill as is in the Senate. At the same time, making changes that all can get on will be a struggle. Last, the Senate may target removal of the state and local taxes (SALT) deduction increase. That would sink any revised bill in the House.

Health Affairs Forefront blog has a good summary of all healthcare provisions in the House version that passed. One area not discussed is the restoration of appropriations for the cost-sharing reductions (CSR) subsidies in the Exchanges. These ended under Trump 45 and actually cost the federal government more in premium subsidies because plans have to offer the CSR plans and must increase base Silver plan premiums dramatically. But those above 250% of federal poverty could see some negative impacts.

Additional articles: https://thehill.com/homenews/senate/5315185-trump-big-beautiful-bill-senate-gop/ and https://www.healthaffairs.org/content/forefront/house-republicans-pass-budget-reconciliation-legislation-s-new-coverage-provisions and https://thehill.com/homenews/senate/5315019-senate-republicans-salt-cap-big-beautiful-bill/?tbref=hp

(Some articles may require a subscription.)

#budgetreconciliation #spending #trump #congress #medicaid #coverage

https://thehill.com/homenews/senate/5316382-these-are-the-changes-senate-republicans-are-eyeing-to-the-gops-big-beautiful-bill/

Reconciliation Bill Already Creating Anxiety In Senate

As the House budget reconciliation bill moves to the Senate, signs are appearing already of a deep ideological divide over the bill. At least two conservatives, Rand Paul, R-KY, and Ron Johnson, R-WI, have questioned whether they will vote for the bill – Paul due to the debt limit provision and Johnson because of too few spending cuts and surging debt.

At the same time, moderates and pragmatic conservatives are pushing for Medicaid reductions to be rolled back. Both Lisa Murkowski, R-AK, and Josh Hawley, R-MO, want Medicaid changes. Susan Collins, R-ME, has also weighed in on Medicaid in the past. There are others, too, who are concerned.

As such, the Senate has too few votes to pass the House version due to opponents on each side.

See my blog today for more details: https://www.healthcarelabyrinth.com/the-budget-rollercoaster-reconciliation-advances-but-big-debate-looms-in-senate/ .

In other news, a Modern Healthcare article outlines all the final Medicaid changes.

Further, another article discusses the possibility but no probability of Medicare sequestration cuts.

Additional articles: https://www.modernhealthcare.com/politics-policy/big-beautiful-bill-medicaid-medicare-pbms and https://www.fiercehealthcare.com/payers/will-trumps-tax-bill-cut-medicare-500b-not-exactly and https://thehill.com/business/budget/5314997-ron-johnson-criticizes-house-gop-bill-says-trump-cant-pressure-him-same-as-house-hardliners/?tbref=hp and https://thehill.com/homenews/senate/5314189-rand-paul-house-gop-budget-bill/?tbref=hp

(Some articles may require a subscription.)

#budgetreconciliation #congress #trump #medicaid #spending #coverage

https://www.modernhealthcare.com/politics-policy/senators-promise-changes-medicaid-cutting-tax-bill

House Passes Reconciliation Bill; On To An Uncertain Fate In Senate

(UPDATED 5/22 AM)

The House threaded the needle and passed the budget reconciliation bill on a tight 215-to-214 vote. Two Republicans voted against the bill, and one voted present to get the bill to pass. The vote was a result of a marathon session and backroom arm-twisting by President Trump, House Speaker Mike Johnson, and other House GOP leaders. President Trump met with the caucus this week and laid down the law, telling moderates to drop their SALT demands (they did to some degree) and conservatives not to “f—” with Medicaid.

The House leaders thread the needle by a mix of further concessions and appealing to party unity. The conservatives wanted additional Medicaid structural changes and accelerated reductions. They were conceded acceleration of work requirements from 2029 to essentially 2027. It is likely impossible for states to do so that quickly.

House moderates cut a deal to further raise the state and local tax (SALT) deduction limit put in place in 2017, but watering down of Medicaid reductions did not occur. The conservatives received some more spending cuts to close the increase in the deficit created by the last-minute SALT change.

Each side was told that was it and they must support the bill given the importance to the GOP and the nation. Further, the president gave commitments to issue additional executive orders to address some spending and Medicaid concerns.

Now the Senate must grapple with passing the bill. It is philosophically opposed to the mammoth nature of the bill. The GOP likely has a solid no vote in deficit hawk Rand Paul of Kentucky. He will hate the deficit impacts. And there are between 5 and 7 moderates or pragmatic conservatives who right now are very concerned about the level of Medicaid cuts. Most can stomach work requirements, but others are concerned about the impact to reimbursement to states and the impact to coverage, especially related to provider tax reform.

The sequestration provisions hidden in the bill could trigger future healthcare cuts beyond what are strictly outlined, including in Medicare.

There is still a long way to go, but the House shockingly got its business done by the self-imposed Memorial Day deadline.

Additional articles: https://thehill.com/homenews/senate/5312796-thune-may-fight-medicaid-cuts/ and https://insidehealthpolicy.com/daily-news/house-gop-meets-wh-over-reconciliation-issues-johnson-strives-wednesday-night-vote and https://www.beckerspayer.com/policy-updates/gop-budget-bill-could-slash-medicare-by-45b-in-2026/ and https://thehill.com/homenews/house/5312712-house-gop-bill-medicare-cuts/ and https://thehill.com/business/5309473-trump-tax-policies-national-debt/?tbref=hp and https://thehill.com/homenews/house/5313019-salt-medicaid-house-republicans-trump-bill/ .

(Some articles may require a subscription.)

#budgetreconciliation #trump #congress #medicaid #coverage #spending

https://thehill.com/homenews/house/5313198-house-passes-trump-big-beautiful-bill

HHS Explains MFN Drug Price Approach

The Department of Health and Human Services (HHS) issued guidance regarding President Donald Trump’s recent executive order regarding adopting most favored nation (MFN) drug pricing throughout the country.

If Big Pharma brand drug makers were not worried before, they should be now. An HHS press release laid out expectations for how drug makers will engage with the order. It notes all brand products that do not currently have generic or biosimilar competition across all markets (lines of business) are covered. It says drug companies must “commit to aligning” their U.S. prices with “the lowest price of a set of economic peer countries.” The peer group is the so-called rich nations as represented by the Organization for Economic Co-operation and Development countries and that have a gross domestic product (GDP) per capita of at least 60% of the U.S. GDP.

Big Pharma came out swinging, arguing the order could mean a pullback on planned American investments.

Critics came out again arguing there is no legal basis for the order, although the administration will pursue the policy through an experimental Center for Medicare & Medicaid Innovation (CMMI) model. It will likely face legal challenges.

Notwithstanding all this, Trump made the right move here to finally challenge Big Pharma. My blog on the topic: https://www.healthcarelabyrinth.com/trump-goes-all-out-on-drug-price-reform/ .

Additional articles: https://insidehealthpolicy.com/daily-news/trump-s-mfn-pricing-plan-likely-face-legal-hurdles-despite-cmmi-workaround and https://insidehealthpolicy.com/daily-news/hhs-most-favored-nation-scheme-include-only-brand-name-drugs and https://www.hhs.gov/press-room/cms-mfn-lower-us-drug-prices.html

(Some articles may require a subscription.)

#irp #mfn #drugpricing #trump

https://www.fiercepharma.com/pharma/all-branded-drugs-not-facing-generic-biosimilar-competition-must-abide-mfn-order-all-markets

House Budget Committee Advances Reconciliation Bill

After a high-profile defeat Friday, the House Budget Committee advanced the budget reconciliation bill with $625 billion in Medicaid reductions Sunday night. Four House Freedom conservatives in the GOP caucus voted present to advance the bill, apparently with commitments that changes will be made to the bill.

A prominent conservative, Chip Roy, said work requirements would be accelerated. He also mentioned the need for steeper provider tax cuts and a rollback of the enhanced reimbursement for the Medicaid expansion.

If all House moderates are on the bill now (a big if), they would likely jump off with steeper Medicaid cuts.

Providers and doctors are sounding the alarm on coverage losses, lower state dollars, administrative costs, and red tape.

Health policy group KFF published two briefs: one on the 15 states that would be impacted with lower reimbursement if they maintain undocumented immigrants and the impact on those with unpredictable incomes to proposed changes regarding tax penalties for Exchange subsidies.

Additional articles: https://insidehealthpolicy.com/daily-news/house-budget-moves-reconciliation-bill-rules-medicaid-changes-unclear and https://thehill.com/policy/healthcare/5305058-concerns-rise-over-medical-coverage-losses-from-big-beautiful-bill/?tbref=hp and https://www.kff.org/medicaid/issue-brief/proposed-medicaid-federal-match-penalty-for-states-that-cover-undocumented-immigrants-with-their-own-funds-state-by-state-estimates/ and https://www.kff.org/affordable-care-act/issue-brief/marketplace-enrollees-with-unpredictable-incomes-could-face-bigger-penalties-under-house-reconciliation-bill-provision/ and https://www.fiercehealthcare.com/payers/florida-blues-plan-rebuffed-cms-star-ratings-challenge

(Some articles may require a subscription.)

#trump #congress #budgetreconciliation #medicaid #coverage #spending

https://www.modernhealthcare.com/politics-policy/tax-bill-medicaid-house-budget-committee