What will come of healthcare as the Democrats take over both houses of Congress
In my November 5 blog, I reviewed what I got right and wrong about the midterms. I correctly predicted Democrats would capture both houses of Congress but underestimated the political tsunami. Affordability, including healthcare, helped dismantle the GOP’s majority. As promised, let’s examine what comes next.
Democrats could finish with 54 to 56 Senate seats and roughly 260 House seats. That is an incredible achievement not seen for some time. As a side note, I would say that polls again were wrong in 2024 and 2026. It missed both waves. But the prediction markets seemed to have it closer. Polymarket and Kalshi both had very high probabilities of the Democrats’ takeover of both houses. Could prediction markets now be a better way to understand voter and public sentiment? The markets appeared to be more predictive of the Democratic way that happened.
What needs to be noted is that despite the huge margins they will have in each chamber, it does not give them the power to enact their healthcare agenda unilaterally. My expectation is confrontation, selective compromise, and considerable frustration for Americans who voted for relief.
Institutional and political issues
Democrats remain short of the Senate’s usual 60-vote threshold to end debate on legislation. They also lack the two-thirds majority in both chambers needed to override a presidential veto. With everyone voting, those thresholds are 67 senators and 290 representatives.
President Donald Trump says he is willing to work with Democrats, while also promising to wield his veto if necessary. The red VETO hat on his Oval Office desk now makes the second message unmistakable.
Naming Stephen Miller chief of staff sends another troubling signal. Elevating an architect of the administration’s hardest-line policies hardly suggests a pivot toward the middle or reaching out to compromise. Democrats’ hostility toward Miller further complicates negotiations. Personnel does not settle every policy question, but this choice makes cooperation harder to envision. They have already stated they will not work with Miller. That is a huge problem for Trump, who appears to be going all in on MAGA policies.
Reconciliation offers leverage with limits
Democrats do have a powerful tool: budget reconciliation. First, both chambers adopt a budget resolution directing committees to write specified fiscal changes. That resolution does not require presidential approval. Qualifying legislation can then pass the Senate with a simple majority because debate is limited, avoiding a filibuster.
But reconciliation legislation still requires Trump’s signature or a veto override. And the Senate’s Byrd rule restricts provisions with merely incidental budget effects and generally bars deficit increases beyond the budget window.
Republicans stretched the process for the One Big Beautiful Bill Act (OBBBA), using a current-policy baseline that treated extending expiring tax cuts as continuation of existing policy. That reduced their measured cost compared with the traditional current-law approach.
Democrats will surely argue that Republicans opened the door to similarly favorable treatment of their priorities. They have a point about the precedent. But this was not a blanket waiver allowing unlimited new spending without offsets. Restoring expired subsidies or reversing enacted cuts would still require budget scoring and procedural scrutiny. Creative accounting also does not make the actual borrowing disappear.
In the end, would Trump and the GOP veto and sustain? They might face blame for closing down government. Shutdown pressure could force compromise, especially with Republicans worried about another affordability backlash in 2028. So, Democrats do have some advantage here with reconciliation.
Democrats’ priorities
I expect Democrats to prioritize restoring enhanced Exchange premium subsidies and reversing or delaying Medicaid and Exchange restrictions. That means battles over eligibility, enrollment procedures, work requirements, and Medicaid financing. With federal Medicaid work requirements approaching implementation, relief could become an urgent operational issue for states and beneficiaries.
There is room for a narrower bargain: subsidy assistance paired with stronger broker oversight, eligibility verification, and anti-fraud safeguards. I have long supported affordable coverage alongside responsible program management. Those objectives belong together.
Other likely priorities include reproductive healthcare, rural hospitals, behavioral health, Medicare benefit expansion, and protecting patients from inappropriate prior authorization and coverage denials. On the Medicare benefit front, Democrats argue that the traditional benefit is too slim and Medicare Advantage (MA) is in essence being favored. They want to cap out-of-pocket costs at $5,000 per year and add dental, vision, and hearing benefits. They also want to pass numerous MA reforms, including surrounding prior authorization, risk adjustment, and rates.
Progressives may push Medicare for All, replacing much of today’s insurance structure with a federal single-payer system. Sen. Bernie Sanders, I-VT, who will return to his healthcare perch, has already called for moving a bill. Moderates will favor strengthening the Affordable Care Act (ACA) and pursuing incremental coverage improvements. Progressives could exert substantial influence, especially in the House, but a sweeping election victory does not resolve disagreements over taxes, financing, or disruption to existing coverage. Medicare for All could become a divisive 2028 positioning exercise rather than achievable legislation.
The administration will keep moving
A Democratic Congress does not automatically reverse the administration’s healthcare direction. The Centers for Medicare and Medicaid Services (CMS) and White House officials are very committed to tighter eligibility, reduced federal spending growth, and stronger fraud enforcement. From their perch in the executive branch, they will continue implementing such changes within their authority and sometimes outside of them.
Paragon Health Institute’s advocacy illustrates the philosophical divide: its support for tighter eligibility and work requirements rests on a fundamentally different view of Medicaid. Officials sympathetic to that approach are unlikely to welcome unwinding the OBBBA.
On a less controversial side, CMS, backed by the White House, is very focused on bringing value-based care (VBC) to the entire healthcare system. It is especially focused on a series of VBC reform models to Medicare as well as technology in healthcare. Now, CMS has always been supportive of such reforms, but the Trump CMS seems more aggressive, especially as it relates to providers in traditional Medicare facing downside risk as well traditional upside reward.
Democrats can investigate implementation, challenge agency decisions, and negotiate funding restrictions. They can also block nominees requiring Senate confirmation. But oversight is easier than rewriting statutes, and statutory benefit reductions generally do not disappear because committee chairs change.
So, Congress will try to stop such executive actions but have limited power to do so. Courts, though, could overturn overreaching rules and executive orders.
Drug prices and vertical integration could bring compromise
Could drug pricing and vertical integration reform be where the White House and Congress do have a basis for compromise? While Democrats cast stones at Trump’s drug price efforts, they have far more in common than not on the issue. Trump likes most-favored (MFN) pricing and recently proposed a regulation to make Medicare drug negotiations permanent. The populist Trump is actually more aligned with Democrats on this issue than his own party, which usually defends Big Pharma.
Since Trump has made lower drug prices a signature objective, he may see this as a legacy item and reach out to Democrats on it. And this would constitute an affordability victory for both. A negotiated package could address selected drug prices, generic and biosimilar competition, and whether negotiated savings actually reach patients. It could even go all-in on MFN and negotiations across lines of business.
Vertical integration offers another potential compromise issue. When an insurer, pharmacy benefits manager, specialty pharmacy, and physician operation share ownership, lawmakers across the spectrum can question internal payments, patient steering, and conflicts of interest. Federal watchdogs are already examining these relationships. Unfairly, Trump has spoken of exploitive and nasty insurers much as Democrats have. Vertical integration reforms could then be a topic where minds meet.
Possible legislation could require clearer reporting of affiliated transactions, stronger protection against abusive steering, and PBM compensation less dependent on drug prices. Legislation and regulation have already gone down this road and could be built on. Targeted safeguards seem more achievable than sweeping mandatory breakups, but populism could very well rule on this issue. Hospital consolidation, facility fees, provider prices, and opaque drug pricing could also get scrutiny. Site-neutral payment (something Trump’s CMS has championed) and carefully designed 340B reforms could enter negotiations, although provider opposition would be formidable.
AI regulation
What about AI regulation in healthcare? Democrats will push this in a big way. Trump has argued no regulation is needed for fear of crippling innovation and losing out to China. But could Trump give in to both Democratic and Republican congressional demands to move something on healthcare?
Affordability
Healthcare affordability could well be a more complicated issue. Democrats’ path is adding dollars to the budget or imposing a socialist alternative, which again is not something Trump and his CMS want to do. In the Trump world, watered-down products and alternatives carry the day. Some of these are not bad as parts of a menu for younger workers, but policy between the two camps collides on affordability, complicating major accomplishments here. Movement here could come on the site neutral and related fronts, though.
My forecast
I see variety of potential outcomes.
- Absolute gridlock. It looks like this right now.
- A mini coverage and reform deal attached to a broader funding agreement because the GOP fears a budget meltdown.
- Narrow drug-pricing and competition, accountability, and transparency legislation.
But neither side should assume voters will blame only its opponent. I want both parties to hear the election’s message. Americans need coverage they can afford to use and meaningful action on underlying prices. A veto hat and a stack of partisan bills will not deliver either.
#midterms #congress #trump #healthcare
— Marc S. Ryan
