Democrat-led Congressional priorities will affect hospitals

Hospitals face a mixed bag of financially positive and negative policies among the priorities of the incoming Democrat-dominated Congress.

Although vote counts continue in some races, Democrats gained large majorities in both the House of Representatives and the Senate in the midterm elections.

Common priorities among incoming leaders in both chambers include plans to roll back Medicaid-related changes in the One Big Beautiful Bill Act (OBBBA) and to resurrect COVID-era subsidies to the ACA marketplaces. But other healthcare priorities vary among expected leaders of various powerful healthcare committees, which drive the legislation both chambers will consider.

All of Democrat-favored healthcare policies face potential vetoes from President Trump, which will require either dealmaking with the administration or with congressional Republicans to get enacted.

OBBBA reversal

Democrats are particularly focused on eliminating OBBBA’s work requirements for ACA expansion enrollees set to begin in January, as well as the start of biannual eligibility checks.

Secondarily, they are pushing to reverse $510 billion in OBBBA cuts to state-directed payments (SDPs) and $246 billion in cuts to the use of provider taxes.

Union Healthcare Insight CEO Christopher Kerns said he expects Congress to pass legislation delaying work requirements and allowing Medicaid enrollees to avoid work requirements through self-attestation of medical frailty.

“Both of those things are likely to have at least some bipartisan support,” he said on a postelection webcast by Second Opinion Media.

Emily Evans, managing director at Hedgeye Risk Management, an investment advisory firm, said in an interview that work requirements were the most likely provision of OBBBA to be reversed — likely as part of negotiations over must-pass budget legislation.

The provider-focused elements of OBBBA are more complicated, said Aneesh Chopra, chief technology officer in the Obama administration. He noted Obama’s past criticism of provider taxes to underscore bipartisan criticism of them. Additionally, complicating their reversal is the resulting fiscal impact on the federal budget and debt from reversing those cuts. But any changes to those provisions will come from broad concern over their effects on the finances of small hospitals.

“The ACA [marketplace subsidies] is clean, Medicaid is complicated,” he said on the webcast. “And I would think there’s going to be a lot more nuance into how that piece is going to be played out.”

Evans was not optimistic that the Democrat-led Congress will succeed in reversing OBBBA’s provider cuts.

“I’m not sure we’re going to see too many changes in the Medicaid provisions,” except for work requirements, Evans said.

ACA subsidies

Chopra said that he thought the coming Congress would be able to restore the extra ACA subsidies — at least temporarily.

As far as “ACA tax credits as a temporary measure, you can kind of get everybody around that to buy time,” he said.

Kerns said renewal of the ACA subsidies is possible as part of a compromise agreement between Congress and the White House.

Mike Desjadon, CEO of Anomaly Insights and former chair of the Virginia State Board of Health, said on the webcast that the reinstatement of the ACA subsidies would be powered by affordability concerns highlighted as a leading issue by voters.

“Whether you like it or not, the average American feels relief in the pocketbook from fixing subsidies,” he said. “I think that is easier to get behind.”

Regulatory fight

The ways congressional Democrats could affect healthcare regulations coming from the Trump administration include potentially stopping the Wasteful and Inappropriate Service Reduction (WISeR) model. WISeR, launched at the start of this year in six states, is testing the use of AI and machine learning tools to reduce low-value, wasteful or potentially harmful procedures in Medicare.

House Democratic Leader Hakeem Jeffries (D-N.Y.) said that halting WISeR was among his “First 100 Hours” priorities.

Legislation to block WISeR narrowly failed in the Senate, and Evans agreed it could pass given concerns voters raised in exit polls over impacts from AI and their data centers.

“An override of WISeR doesn’t seem particularly outside the realm of possibility in a kind of anti-AI sentiment,” Evans said.

Other legislation

Incoming healthcare leaders include Rep. Frank Pallone (D-N.J.), who was expected to chair the powerful House Committee on Energy and Commerce. His priorities include reforming the Independent Dispute Resolution (IDR) process, which was created to resolve out-of-network billing disputes. Pallone’s legislation seeks to reduce the growth in provider awards under IDR by replacing baseball-style arbitration with a fixed-payment formula.

“IDR is definitely going to get reined in,” said Kerns.

The potential for changes in the 340B [program] is murkier. Competing reforms to 340B favored by various members of Congress do not break down cleanly along partisan lines, he said.

“The challenge with that is that the politics of drugs and pharma in America are not as partisan as a lot of other things are, and they require buy-in from very particular senators,” Kerns said.

Desjadon said Congress also may act to rein in the increase in prior authorization and denials by payers, especially in Medicare Advantage.

In addition, the incoming Congress could hold messaging votes on one of the proliferating single-payer bills without expecting them to pass or be enacted into law, Chopra said. An increasing number of Democratic senators — including the expected chair of the powerful Senate Finance Committee — have switched from backing limited proposals, like public options, to support for single-payer bills.

“I’m sure one of them might make their way to the floor [for votes by the full chamber], especially because they might be more of a tool for [the 2028 presidential election] than they actually will be about healthcare policy,” Chopra said.