While the 2024 Presidential and Congressional election cycle featured limited discussion of health care, 2025 has featured intense focus on the industry as President Trump staffs his administration and a full Republican lineup looks to pay for extending Tax Cuts and Jobs Act policies.

Robert F. Kennedy, Jr. and Dr. Mehmet Oz represent a new type of political appointee for HHS and CMS, respectively. RFK, Jr. takes the helm at HHS as the Trump administration looks to reduce staff across HHS and reduce funding, including for NIH grants. For Dr. Oz, there are questions about how he will handle Inflation Reduction Act (IRA) drug pricing negotiations as well as Medicare Advantage policy.

In Congress, Republicans look to extend tax cuts, Medicaid has been at the top of the list of potential cuts. The list of potential policies range from repealing Biden Medicaid rules, to imposing work requirements, to major changes to the program including limiting annual Medicaid growth and reducing the Medicaid expansion federal matching rate to the traditional Medicaid rate, which would eliminate expansion in many states. The search for Medicaid cuts has created tension among House and Senate Republicans, with fiscal hawks arguing for larger cuts while more moderate members and those from battleground states and districts uncomfortable with even more modest cuts. Congressional Republicans are intent on passing an extension of the tax cuts, so this will continue to be an issue until that goal is satisfied.

Another key issue is the fate of the enhanced Affordable Care Act (ACA) exchange subsidies, initially passed as part of the American Rescue Plan in 2021 and extended in the IRA in 2022. Since 2021, over 12 million new enrollees have joined the exchanges, but the subsidies are set to expire at the end of 2025. It is not clear how Congressional Republicans could get on board with an extension, but there will be intense lobbying from providers, payors, and patients throughout 2025.

Beyond these 2 major issues, there are a host of other issues, including physician fee schedule reform, the impact of the Department of Governmental Efficiency on Medicare and other government systems, and any read through from the IRA on pharma, Part D sponsors, and related entities, such as CROs.

We hope you enjoy our latest Washington Health Care Policy Report.