This Week in Healthcare

Sunday, May 11

House Republicans release Medicaid spending plan

The plans called for work requirements and more frequent eligibility checks. It steered clear of outright cuts in the federal matching rate that sets federal funding levels of the state-run programs and didn't incorporate ideas favored by some conservatives, such as putting per capita limits on federal funds for Medicaid. In an opinion piece published The Wall Street Journal website, House Energy and Commerce Committee Chair Brett Guthrie said the bill would “implement sensible work requirements” and rein in rising Medicaid costs. A preliminary assessment issued by the Congressional Budget Office (CBO) on estimated that the healthcare provisions of the Republican plan would reduce federal spending by $715 billion over 10 years but also reduce the number of people in the U.S. with health insurance coverage by 8.6 million.

Monday, May 12

President Donald Trump signs “most-favored nation” drug pricing executive order

The president held a press conference to announce the signing of an executive order that gives HHS 30 days to “communicate most-favored-nation prices targets” to pharmaceutical manufacturers and to propose rulemaking to impose such pricing “if significant progress towards most-favored-nation pricing for American patients is not delivered.” The strongly worded introductory text of the order says that United States has less than 5% percent of the world’s population and yet funds around three-quarters of global pharmaceutical profits. “This egregious imbalance is orchestrated through a purposeful scheme in which drug manufacturers deeply discount their products to access foreign markets, and subsidize that decrease through enormously high prices in the United States,” the order says.

An accompanying factsheet seemingly takes aim at pharmacy benefit managers (PBMs), calling out a provision that says the HHS secretary shall “establish a mechanism through which American patients can buy their drugs directly from manufacturers who sell to Americans at a 'most-favored-nation' price, bypassing middlemen.”

Stephen J. Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA) , the main trade association for drug manufacturers, issued a statement that said “importing foreign prices from socialist countries would be a bad deal for American patients and workers” while also lauding the administration for using “trade negotiations to force foreign governments to pay their fair share for medicines.” Ubl's statement laid the blame for high drug prices on PBMs, insurers and hospitals: “The U.S. is the only country in the world that lets PBMs, insurers and hospitals take 50% of every dollar spent on medicines. The amount going to middlemen often exceeds the price in Europe. Giving this money directly to patients will lower their medicine costs and significantly reduce the gap with European prices."

Trade associations for the PBM, insurance and hospital industries did not issue statements after the announcement.

Some Wall Street analysts and other commentators downplayed the significance, noting some of the vagueness and the timeline for action. Others drew attention to the language supporting policies that might pave the way for drugmakers to sell direct to consumers.

Tuesday, May 13

Witty steps down, UnitedHealth Group cancels financial forecast

The healthcare company made a surprise annoucement that CEO Andrew Witty was stepping down for “personal reasons” and that board chair and former CEO Stephen Hemsley would take his place. The company, which comprises health insurer UnitedHealthcare, health services company Optum and PBM Optum Rx, also announced that it was suspending its 2025 earnings outlook “as care activity continued to accelerate while also broadening to more types of benefit offerings than seen in the first quarter, and the medical costs of many Medicare Advantage beneficiaries new to UnitedHealthcare remained higher than expected.” UnitedHealth Group’s stock price fell sharply by 16%, and by the end of the week the stock was trading at a price that was half as high as it was at beginning of 2025.

Wednesday, May 14

House Energy and Commerce finishes marathon markup, advances its part of the reconciliation bill

After a marathon, 26-hour markup session that began on Tuesday, the committee voted 30-24 along party lines to advance the Medicaid, as well as the energy and other provisions under its broad jurisdiction. The committee’s bill feeds into the massive “One Big Beautiful Bill Act” tax and spending bill that the Republicans and the White House want signed into law by July 4. If the committee’s Medicaid provisions go changed, Medicaid work requirements would go into effect Jan. 1, 2029. According to a Congressional Budget Office (CBO) assessment, the work requirements, which allow hours in school and training to count toward the requirement, would result in $300.8 billion in reduced federal spending from 2028-2034. That is the lion’s share of the $625 billion in reduced federal Medicaid spending that the CBO estimates the bill would produce overall.

In a news release, Guthrie, the comitteee chair, heralded the committee’s plan, (which also cuts in green energy and other programs) as an historic step to “unleash American energy, bolster our technological leadership, and prioritize health care for the most vulnerable Americans and U.S. citizens.”

The committee’s ranking member, Rep. Frank Pallone Jr. from New Jersey, issued a statement on Thursday that said that “after 26 hours, Republicans failed to justify their draconian Medicaid cuts" and said that “13.7 million people stand to lose their health care on Republican’s watch.”

California Gov. Gavin Newsom proposes freezing enrollment undocumented Californians into the state’s Medicaid program

As part of a budget plan, Newsom proposed prohibiting further enrollment of immigrants without permanent legal status into the Med-Cal, the state’s Medicaid program.

According to CalMatters, a nonprofit news website, the 1.6 million immigrants who have already signed up for Med-Cal would not lose coverage under Newsom’s plan, and children could still be enrolled. Newsom is also proposing to keep limited coverage for emergency care and pregnancy. But beginning next year, people 19 and older who lack permanent immigration status could no longer enroll.

Newsom’s proposal also calls for charging $100 monthly premiums, starting in 2027 “for individuals with certain statuses, those who will eventually qualify for federal funds and individuals enrolled in the Medi-Cal full-scope expansion aged 19 and over.”

The enrollment freeze and charing premiums would yield $5.4 billion in savings by 2028-29, according to estimates from Newsom’s office.

Thursday, May 15

HHS Secretary RFK Jr. grilled by representatives and senator

HHS Secretary Robert F. Kennedy Jr. testified before the House Appropriations Committee in the morning and before the Senate Health, Education, Labor and Pensions Committee in the afternoon. Democrats, as expected, were the more aggressive questioners and that led to some contentious exchanges. Kennedy defended staffing cuts at HHS, saying that in some cases they were the result of reorganizations that would lead to efficiencies and had been mischaracterized in media accounts and by Democrats. He defended cuts at National Institutes of Health, describing it as being corrupt and captured by industry.

In both hearings, Kennedy, who has been a prominent vaccine skeptic and critic, was pressed on his views on vaccine. During an exchange Rep. Mark Pocan, a Wisconsin, Kennedy said his views on vaccines were irrelevant and he did not want to give medical advice. “I think what we are going to try to do is lay out the pros and cons [of vaccines], the risks and benefits as we understand them, with replicable studies,” Kennedy said.

During the Senate hearing, Kennedy said a study of serious side effects from mifepristone, the abortion pill, was “alarming” and that he had asked FDA Commissioner Marty Makary to do “a complete review [of mifepristone] and report back.”

Hawley, Shaheen introduce bill to end tax breaks for direct-to-consumer advertising

Sens. Josh Hawley, a Missouri Republican, and Jeanne Shaheen, a New Hampshire Democrat, introduced a bill that would end the tax deduction that drug companies use for direct-to-consumer advertising. Shaheen has introduced similar bills before, and the No Handouts for Drug Advertisements Act was introduced in the House, with both Republican and Democratic sponsors, in April.

“For too long, Big Pharma has used our tax dollars to fund ads that push their products directly on patients. That needs to end,” Hawley said in a press release.

Minnesota Gov. Tim Walz, legislative leaders reach budget deal that rolls back coverage for undocumented immigrants

Walz and Republican and Democratic legislative leaders announced that they had reached a budget deal that includes a reversal of a policy that allowed people without permanent legal status to enroll in MinnesotaCare, according to The Minnesota Star Tribune, the state’ largest newspaper.

MinnesotaCare is a program for people in the state with low incomes but that are too high to make them eligible for state’s Medicaid program. Participants are charged premiums and copays.

The policy that allowed people without legal documentation to enroll in MinnesotaCare started just this year, according to the newspaper, and had triple the number of enrollees than the state anticipated.

A group of community leaders and legislators chanted, “You are killing our community” at the announcement.

The newspaper quoted Walz as saying he anticipated hearing objections to the budget and the healthcare rollback: “They’re going to go hear this. I’m going to hear it. That’s the way this should be done. But I’m proud that this is a solid budget. It is fiscally responsible, it is pro-growth, it brought together a divided legislature in a time ... of total chaos in D.C.”

Friday, May 16

Republican tax and spending bill, including Medicaid provisions, stalls in House Budget Committee

Five Republicans joined Democrats in a 21-16 vote Friday that blocked the spending and tax bill form advancing.

Numerous media outlets, including Politico and The Wall Street Journal, said the Republicans who voted the bill are members of the House Freedom Caucus who want spending cuts to happen sooner. They favor, for example, moving the implementation of Medicaid work requirements to start earlier than 2029. tThe committee is scheduled to reconvene tomorrow on Sunday.