A Democratic Congress likely means more oversight for payers, not a Medicaid rollback

Democrats won Congress, but health plans face their biggest deadlines before the new majority can act. After that, payers should expect more hearings, funding fights and deals on PBMs than a rollback of Medicaid cuts.

The Associated Press called the Senate for Democrats late Tuesday and the House early Wednesday. As of late Wednesday morning, Democrats held 54 Senate seats to Republicans’ 44. Races in Alaska and Mississippi were still too close to call and could remain this way for days or weeks, according to David Becker, a former DOJ voting rights lawyer who runs the Center for Election Innovation & Research, sharing with USA Today. The new Congress takes office Jan. 3.

What’s already set for Medicaid and ACA plans

Starting Jan. 1, it states that expanded Medicaid must require many adults ages 19 to 64 to work, volunteer or go to school 80 hours a month. The rule comes from the One Big Beautiful Bill Act, which Trump signed in July 2025. States can ask CMS for more time, but the agency’s rule caps each delay at six months, and no delay can run past 2028.

A federal judge ruled last week that CMS went too far in narrowing who counts as “medically frail” and is excused from the requirement. The judge also gave the states that sued a six-month pause on federal enforcement of medically frail decisions. The opinion notes that the pause does not change the Jan. 1 start date. Separately, South Dakota voters this week rejected a measure that would have let the state end its Medicaid expansion if federal funding dropped, MHE reported.

For ACA marketplace plans, 2027 sign-ups are already underway. Open enrollment on HealthCare.gov runs through Jan. 15. People must sign up by Dec. 15 for coverage that starts Jan. 1, and a few state exchanges stay open until Jan. 31, according to healthinsurance.org. Insurers set 2027 prices without the extra federal premium subsidies that expired at the end of 2025. The number of people paying for marketplace plans had already dropped 12%, or 2.6 million, by February 2026, according to KFF.

Trump’s veto limits what Democrats can undo

“House Democrats will be united around the effort to reverse the Medicaid cuts and extend the Affordable Care Act tax credits,” Minority Leader Hakeem Jeffries (D-N.Y.) told reporters in October, according to ABC News. The House passed an extension of the ACA subsidies earlier this year with help from 17 Republicans, according to Jeffries’ office. It stalled in the Senate.

Trump said Wednesday he is willing to work with Democrats, but he also told Fox News he would send their bills back “with a nice stamp veto.” Senate Republicans’ leader said his members will work with Trump to stop the Democratic agenda, NBC News reported.

Republicans have proposed putting subsidy money into health savings accounts for patients instead of paying it to insurers. “Giving billions of taxpayer dollars to insurers is not working,” Senate Finance Committee Chair Mike Crapo (R-Idaho) said in a news release.

Because of the veto, Democrats are more likely to slow or limit the law’s Medicaid changes through hearings and funding bills than to repeal them, law firm Holland & Knight said in a pre-election analysis.

Where Democrats can make a difference

The biggest openings are bills Congress has to pass. Current government funding runs out Dec. 11. Several healthcare programs also expire at year’s end, including a 2.5% Medicare pay bump for physicians and funding for community health centers. Those will likely ride on the next funding bill, Holland & Knight noted. Then, four FDA user-fee programs expire Sept. 30, 2027, setting up another must-pass bill.

Committee hearings are another tool. Holland & Knight expects a Democratic Congress to substantially increase oversight of both the administration and the healthcare industry. Sen. Ron Wyden (D-Ore.) is expected to lead the Finance Committee, and Sen. Bernie Sanders (I-Vt.) is expected to lead the Health, Education, Labor and Pensions Committee, STAT reported.

Medicare Advantage (MA) plans could face more scrutiny. House Democrats’ health agenda calls for fewer network limits and fewer unnecessary prior authorization requirements in MA, according to a summary by the American College of Osteopathic Family Physicians. Brookings noted Democrats could also look at lowering MA payments to help pay for expanding coverage.

Deals are most likely where both parties already agree. Holland & Knight points to PBMs, prior authorization and site-neutral payment, which pays the same rate for a service no matter where it is delivered. New PBM rules passed earlier this year apply to Medicare drug plans starting in 2028, according to law firm Mintz. Crapo told NBC News before the election that his agenda would include “PBM fixes.”

The longer game: Bills built for 2028

Some of this Congress’ most important health bills may never become law, Brookings argued. House Democrats passed Medicare drug price negotiation in 2019 and bigger ACA subsidies in 2020, even though neither had much chance under Trump. Both later became law.

With Wyden and Sanders, who both support Medicare for All, leading key Senate committees, the push for a bigger government role in coverage is likely to get a hearing. However, the veto makes a major overhaul unlikely while Trump is in office.