On February 3, President Trump signed legislation providing funding for most federal agencies through fiscal year 2026 (FY26), which ends September 30. The plan includes key health care expansions and reforms, including Medicare telehealth flexibilities and support for outreach to low-income beneficiaries. It also largely protects Administration for Community Living (ACL) programs and other programs important to seniors and people with disabilities.
Medical insurance promotion and registration
Despite cuts early in the funding cycle, the State Health Insurance Assistance Program (SHIP) will receive the same funding in FY 2026 as it did in FY 2025. SHIP provides Medicare beneficiaries, their families and caregivers with objective, free, one-on-one assistance so they can make informed decisions about their coverage and care.
The bill includes a two-year extension of funding for outreach and enrollment activities originally authorized under MIPPA.
The bill includes a two-year extension of funding for outreach and enrollment activities originally authorized under the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA). Community organizations across the country, including SHIP, rely on these funds to connect low-income Medicare beneficiaries to programs that make health care and prescription drugs more affordable.
Medicare Part D
The plan further addresses affordability concerns by reducing cost-sharing for Medicare Part D Low-Income Subsidy (LIS) enrollees, limiting their out-of-pocket costs for generic drugs to $1 to $3 before zeroing out entirely in 2028.
Another set of policies establishes new reporting requirements and reimbursement guardrails for pharmacy benefit managers (PBMs), the entities responsible for overseeing prescription drug benefits for health insurance companies.
Medicare Telemedicine
The bill extends Medicare telehealth flexibilities through 2027, preserving geographic and location exemptions, expanding the starting location and list of eligible practitioners, and audio-only telehealth coverage, among other policies. It also delays in-person visit requirements for mental health telehealth services until 2028 and requires the Department of Health and Human Services (HHS) to issue guidance within a year on best practices for telehealth services for individuals with limited English proficiency.
hospital at home
The bill continues another pandemic-era initiative, Medicare's Home Acute Hospital Care (AHCAH) program, for five years through Sept. 30, 2030. Under this program, certain Medicare-certified hospitals can provide inpatient-level care in patients' homes. As of this week, 139 health systems and 366 hospitals in 37 states have been approved to participate.
Medicare Diabetes Prevention Program
Another extension would keep the Medicare Diabetes Prevention Program (MDPP) through 2029. The MDPP provides eligible Part B beneficiaries with a free diabetes prevention program for one year. Since the COVID-19 pandemic, virtual providers have been allowed to provide MDPP services under temporary authorization, similar to other Medicare telehealth flexibilities. The FY2026 funding plan provides long-term certainty and expands participation options.
Medicare Advantage Provider Directory
Crucially, the package resolves the long-standing problem of inaccuracies in the Medicare Advantage (MA) provider directory. Beginning in 2028, MA plans must verify the accuracy of their provider directories every 90 days, and the following year plans will be required to publish accuracy scores and protect enrollees from higher cost sharing resulting from incorrect directory information.
Starting in 2028, MA plans must verify the accuracy of their provider directories every 90 days.
These updates are an important step in ensuring that the provider directory is current and meaningful to enrollees. Directory errors and “ghost networks” list providers who may no longer be in network, no longer practice, or no longer accept patients, which can have serious consequences for enrollees who rely on these tools to make coverage and care decisions. Better reliability will increase program transparency and accountability and improve the beneficiary experience.
Does not include ACA tax credits
The bill lacks an extension of the Affordable Care Act's (ACA) premium tax credit, which helps more than 22 million people afford health care. They are set to expire on Dec. 31, putting nearly 5 million adults age 50 and older at risk of soaring premiums. The ensuing hardship and loss of coverage is expected to mean reduced access to care and worsened health outcomes, as well as higher Medicare costs as more people enter the program with higher acuity than would otherwise be the case. Medicare rights groups continue to urge lawmakers to immediately extend the credit line.
