Congress reached a bipartisan agreement this week on a health care funding and policy package, including a $1.2 trillion spending bill aimed at averting a government shutdown. The plan includes a series of financing proposals, policy reforms and program expansions designed to support health care providers and public health.
Here are seven things to know about the proposal.
— The bill provides HHS with approximately $116 billion in funding through fiscal year 2026. This is a $210 million increase from the agency's funding in fiscal year 2025, and includes an increase of $415 million for NIH.
— The agreement does not provide an enhanced Affordable Care Act premium tax credit. The subsidies were introduced during the pandemic to improve health care affordability but expired late last year. The expiration of these subsidies not only leaves millions of Americans without coverage, it could also create significant cash flow challenges for health care providers already facing financial stress. As premiums rise and enrollment declines, hospitals may face higher levels of uncompensated care and bad debt. Last year, 93% of ACA marketplace participants received tax credits.
— The proposal includes reforms to pharmacy benefit managers that would require greater transparency and accountability in Medicare Part D. It requires clearer reporting on PBM pricing, rebates and fees and directs CMS to define “reasonable and relevant” contract terms to better reflect drug costs. The bill also decouples PBM compensation from drug list prices and bans certain opaque practices, such as spread pricing, aimed at reducing PBM incentives to push high-priced drugs and retain hidden profits. Additionally, the reforms aim to improve pharmacy network access and provide pharmacies with a process to dispute unfair contract terms.
— The legislation would extend telemedicine flexibility until 2027. If the bill passes, CMS's Pandemic-Era Telehealth Waiver, which gives providers the coverage they need to deliver virtual care at scale, would be extended for another two years. This extension will bring more certainty to healthcare providers and patients, as virtual care remains a critical access point for many patients, especially those in rural communities.
— Family hospitals get a five-year extension in the bill. The extension preserves CMS reimbursement for hospital-level care provided in patients' homes. Hospital leaders believe the program helps reduce capacity strains, lower costs and improve the patient experience, especially for patients with chronic conditions.
— The proposal would delay planned Medicaid Disproportionate Share Hospital (DSH) cuts until fiscal year 2028. DSH payments help offset the cost of uncompensated care, and hospital groups have long warned that spending cuts could destabilize health care facilities that serve large numbers of low-income and uninsured patients.
— The bill would extend CMS’ rural hospital payment program for another year. The proposal would extend for one year two programs designed to support rural hospitals: the Medicare-Dependent Hospital Payment Adjustment Program and the Small Hospital Payment Adjustment Program. These payments are intended to offset higher operating costs and lower patient volumes in rural areas, where access to care is often limited.
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