Health Care Matters | May 16, 2025
News You Can Use: New CMMI Strategy Announced
CMMI announced a new strategy this week called "Make America Healthy Again," which will transform health care through three key pillars: promoting evidence-based prevention, empowering people to achieve their health goals, and driving choice and competition, all while emphasizing fiscal responsibility through downside risk requirements, high-value service prioritization, and designing models with potential for broader Medicare and Medicaid adoption. Watch this space next week as we share more insights on the Coral Pop Health Podcast. Read here.
House GOP bill would make deep cuts to Medicaid
Modern Healthcare and Politico report that House Republicans are advancing legislation that would cut more than $700 billion from federal health programs, primarily Medicaid, as part of a broader package to extend Trump-era tax cuts. According to the Congressional Budget Office, these cuts would result in approximately 10.3 million people losing Medicaid coverage, with 7.6 million becoming completely uninsured over the next decade. The most significant savings would come from implementing work requirements for "able-bodied" adults (saving nearly $301 billion), overturning Biden-era rules (saving $163 billion), and creating a moratorium on provider taxes that states use to finance their programs (saving $87 billion). Other key provisions include stricter eligibility reviews, limiting states' ability to use provider taxes, imposing cost-sharing for certain expansion enrollees, and prohibiting coverage for undocumented immigrants and gender-affirming care. Read more here and here.
Why It Matters
While Aetna's decision appears to be company-specific rather than indicative of broader ACA marketplace problems, experts note that trouble could be on the horizon for the exchanges. The enhanced premium tax credits that boosted exchange enrollment are set to expire at the end of the year, and with President Trump and the Republican-controlled Congress focused on downsizing the federal government and cutting health care spending, an extension of these subsidies seems unlikely. The Trump administration has already begun retreating from exchange support by cutting 90% of the budget for enrollment navigators and considering shortening the open enrollment period.
This development suggests we're likely to see a shift in the ACA marketplace landscape. Without the enhanced subsidies, enrollment will likely decrease and the risk pool could become smaller and sicker, making the marketplace less attractive for insurers, particularly those with smaller market shares like Aetna. Health care providers and remaining insurers should prepare for potential instability in the individual insurance market, while affected Aetna customers will need to find new coverage options for 2026.
Trump's Most-Favored-Nation Drug Price Executive Order
On May 12, 2025, President Trump signed an executive order aimed at dramatically reducing prescription drug prices by implementing a "most-favored-nation" (MFN) pricing policy. The order directs HHS to communicate MFN price targets to manufacturers within 30 days of the order. If drug manufacturers fail to make “significant progress” to comply with offering MFN pricing, the administration threatens "additional aggressive action," including proposing rules to impose MFN pricing, exploring drug importation from countries with lower prices, and directing the Department of Justice and Federal Trade Commission to pursue enforcement against anti-competitive practices. Trump claims this could reduce drug prices by 30% to 80% "almost immediately," addressing the disparity where Americans pay nearly three times more for the same medications often manufactured in the same factories.
The order also directs HHS to facilitate direct-to-consumer purchasing programs for manufacturers to sell pharmaceutical products to U.S. patients at the lowest prices offered to other developed countries and instructs the U.S. Trade Representative and Commerce Department to address "unreasonable or discriminatory" policies in foreign countries that force Americans to pay disproportionately for global pharmaceutical research and development. These actions are to be taken consistently with existing law. Read more here and here.
Why It Matters
This EO pressures drug manufacturers to take action rather than setting out substantive policy action from the government. Many critical details remain undefined, including the methodology for determining the MFN price and how the policy would extend to Medicaid and private insurance markets. The administration is essentially creating negotiating leverage and positions the administration to take further action beyond an MFN model if voluntary compliance isn't achieved, introducing direct-to-consumer pricing as a key new element that wasn't emphasized in Trump's first-term approach. The direct-to-consumer approach could be especially relevant for high-demand medications like GLP-1 drugs for diabetes and weight management, where insurance coverage gaps have left many patients paying out-of-pocket. However, the scalability of this approach to other therapeutic areas with more complex distribution remains uncertain.
Notably, this order follows an April EO that announced a CMMI drug-pricing model, suggesting alternative payment and value-based models may still be on the table even if the MFN policy faces challenges.
Given the pharmaceutical industry's significant lobbying power and previous successful legal challenges to similar policies, we can expect substantial resistance. The industry has already voiced strong opposition, with PhRMA estimating such a policy could cost manufacturers up to $1 trillion over the next decade, potentially threatening innovation and American jobs. PhRMA and BIO each issued statements on the EO, with PhRMA identifying PBMs as a key driver of increased costs in the U.S., and BIO highlighting risks to small- and midsize- biotech companies.
Look for the Helpers: Indiana University Health's Telehepatology Team
The Indiana University Health hepatology team is breaking down barriers to specialized liver care through their innovative inpatient telehepatology service. By connecting academic specialists with community hospitals virtually, the IU Health team has enabled 92% of patients with advanced liver disease to receive expert care locally rather than requiring transfer to tertiary centers, demonstrating how technology can expand access to critical health care while keeping patients closer to home. Read here.
What We Are Reading
Industry Survey Shows Limited Progress on Prior Authorization Rule Implementation
WEDI has released results from its first baseline survey tracking industry readiness for the Advancing Interoperability and Improving Prior Authorization Final Rule, revealing that 43% of payers and 52% of providers have not yet started implementing the required API components that must be completed by January 2027. Read here.
Rural Maternity Care Crisis Deepens, Report Finds
A new report from the Center for Healthcare Quality and Payment Reform reveals a crisis in rural maternal health care, with over 100 rural labor and delivery units closed since 2020 and more than half of U.S. rural hospitals no longer offering maternity services, forcing many rural mothers to travel long distances for care and increasing risks for both mothers and babies. Read here.
Where we are going
CMS Quality Conference
Save the date for the CMS Quality Conference, scheduled for July 1 and 2. This year’s theme is Make America Healthy: Improving Health Outcomes Through Prevention, Quality, and Safety. To learn more, click here.
podcast Spotlight
Caregiving in the United States – Challenges and Opportunities
In this episode, Coral Director Kate Freeman sits down with Hope Glassberg and Shira Hollander to unpack the challenges, promising prospects, and public policy that could support caregivers.