Unsettled health policies leave billions in health spending hanging
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Tiffany Herring/Axios
In a year dominated by vaccine policy, Medicaid and the Affordable Care Act, the Trump administration has set in motion other policy changes that are still in the works and could influence billions of dollars in health spending.
Why it matters: This year's generational debates over costs and coverage have overshadowed dozens of other efforts to reshape existing health programs or flesh out the details of new initiatives in drug pricing, rural health and other areas.
Here are three unfinished efforts we'll be watching in the coming weeks:
🌾 Rural health funds: The sweeping GOP budget law created a $50 billion pot of money to help mitigate the effects of the nearly $1 trillion in Medicaid cuts. Federal officials have until the end of the year to work out the fine print and clarify how it's spent.
- The law stipulates they have to distribute half of the money evenly to states regardless of size. But the remaining $25 billion is to be dispensed at the administration's discretion, based on applications states submitted last month.
- Applications will be judged in part on states' willingness to align with administration priorities, including food stamp restrictions or deregulating skimpier short-term insurance plans, Politico reported. That's stoked concerns about favoritism and rewarding allies.
- Medicare administrators already cleared up one other big ambiguity connected with the rural health fund, telling states they can't use more than 15% of what they get for health provider payments, including to rural hospitals.
- The funds won't fully fix rural health struggles, or offset states' and providers' growing budget nightmares. But the money could make a dent for states that secure enough.
💊 Drug pricing: President Trump made a splash with his "most favored nation" pricing regime and deals with five pharmaceutical manufacturers to drop U.S. prices for selected drugs in certain markets.
- But there are two other pricing pilot programs now undergoing final review by the White House.
- There are few public details so far about the Global Benchmark for Efficient Drug Pricing Model and the Guarding U.S. Medicare Against Rising Drug Costs Model, but insiders think they may be used to further align U.S. drug prices with the lowest prices paid in other developed nations.
- The policies could affect billions of dollars in federal drug spending, and extend far beyond the one-on-one deals Trump has already cut and the ongoing Medicare drug price negotiations stemming from the Inflation Reduction Act.
❌ Gender-affirming care restrictions: A proposed policy to limit hospitals' Medicare and Medicaid payment if they perform gender-affirming medical procedures for transgender youth is also under White House review, and Health and Human Services is holding meetings about prospective changes.
- The administration has moved aggressively to curb gender-affirming care for youths, including an executive order to defund gender-affirming care for minors that was halted by courts.
- Most hospitals are extremely reliant on Medicare and Medicaid, and they wouldn't be able to survive without that payment source.
Reality check: Most of the policy changes being reviewed don't have strict deadlines.
- And a lot of the administration's bandwidth still is tied up with other annual regulations outlining changes to Obamacare and Medicare Advantage, likely to be proposed in the coming weeks.
What they're saying: HHS spokesperson Andrew Nixon said the agency has worked to "solve deep-rooted public health problems with honesty, courage, and gold-standard science."
- "We expect that momentum to continue through the end of 2025 and into 2026," Nixon said in an email.
- He did not respond to a question about the specific timing.
