Summary
This week, the House is in recess, while the Senate continues Senate Majority Leader John Thune’s goal to advance as many appropriations bills as possible before August recess. This includes attempting to put a minibus on the Senate floor to fund the departments of Commerce, Justice, Agriculture and Veterans Affairs, as well as the Senate Appropriations Committee markup of the Labor-HHS bill. If the Senate is able to advance the minibus, it may set the stage to avoid a government shutdown come the end of September.
Reconciliation 2.0
On Friday, Republican Study Committee (RSC) Chair August Pfluger (R-TX) announced the RSC Reconciliation 2.0 Working Group to “forge a robust conservative policy framework for a second reconciliation bill.” The press release indicates the Rep. Pfluger has directed the Working Group to solicit proposals from the RSC members, allies in the Senate, and conservative grassroots groups, which will culminate in the release of a policy framework, providing recommendations for the focus, aims, and goals of the second reconciliation bill.
Hearings
On Thursday, the Senate Health, Education, Labor, and Pensions (HELP) Committee will hold a hearing on how to lower health costs and make health care more affordable for American patients. We anticipate the expiration of enhancements to premium tax credits (PTCs) at the end of the year will be a focal point of the discussion. An extension will require bipartisan support.
Rate filings indicate that premiums in the individual market are increasing by a median of 15 percent. The Congressional Budget Office (CBO) estimates that the expiration of enhanced PTCs will increase the number of uninsured people by 4.2 million in 2034.
In June 2024, CBO and Joint Committee on Taxation estimated a one-year extension of the enhancements would cost $23 billion and a two-year extension would cost $55 billion. These estimates do not account for changes made by the One Big Beautiful Act and the 2025 Marketplace Integrity and Affordability Final Rule that are expected to reduce the number of people who receive PTCs and lower federal spending. The cost of extending enhancements – either in its current form or with modifications, such as eliminating zero-premium plans and limiting the availability of PTCs to people with higher incomes – would need to be offset by other policies. The hearing may shed light on possible offsets.
MAHA Update
Last week, the Departments of Health and Human Services (HHS) and Agriculture (UDSA) jointly announced a request for information (RFI) to gather feedback and data to establish a uniform definition for “ultra-processed foods (UPFs).” The agencies note that there is currently no standard definition, and they describe several alternatives used in literature related to ingredients, manufacturing processes, and other factors. Given concerns about the impact of a diet high in UPFs, the agencies say that a uniform definition will allow for consistency in research and policy. UPFs are a key target of the Make America Healthy Again (MAHA) movement spearheaded by HHS Secretary Robert F. Kennedy Jr, and were a major focus of the MAHA Commission’s report on drivers of childhood chronic disease (Impact summary). An action plan following from that report is due by August 12, 2025. The updated definition of UPFs would likely be used in future work from the MAHA Commission and could potentially be used in regulations to limit the availability of UPFs, especially in child nutrition programs. The uniform definition may also influence the Dietary Guidelines for Americans, 2025-2030, which USDA and HHS are planning to release later this year. Comments on the RFI are due by September 23, 2025.
Regulatory Update
The Office of Management and Budget completed reviewing an interim final rule titled, “Administrative Simplification: Modifications to NCPDP Retail Pharmacy Standards.
OMB is also reviewing the following:
- Medicare:
- FY 2026 Medicare Payment. Final FY 2026 payment updates to the acute care hospitals and long-term care hospitals, hospice facilities, skilled nursing facilities, inpatient rehabilitation facilities, and inpatient psychiatric facilities. These final rules are typically published around August 1.
- CY 2026 Medicare Advantage/Part D Policy. Final CY 2026 policy and technical changes to the Medicare Advantage, Medicare Prescription Drug Benefit, and Medicare Cost Plan Programs, and PACE
- Medicaid:
- Gender-Affirming Care. A proposed rule titled, “Medicaid Program; Prohibition on Federal Medicaid Funding for Sex Trait Modification Procedures Furnished to Children and Youth.”
- Immigration Status. A final rule titled, “Medicaid Eligibility Changes Under the Affordable Care Act of 2010; Giving States Freedom to Use Immigration Information to Determine State Residency for Medicaid Eligibility.” The final rule is part of the Trump administration’s efforts to increase federal oversight on states using Federal Medicaid funding for the health care of undocumented immigrants.
- State Directed Payments. A proposed rule titled, “Medicaid Managed Care-State Directed Payments.” The proposed rule appears intended to advance a presidential memorandum released on June 6, which directs HHS to “eliminate waste, fraud, and abuse in Medicaid, including by ensuring Medicaid payments rates are not higher than Medicare, to the extent permitted by applicable law.”
- Prescription Drugs:
- 340B Program. A notice from the Health Resources and Services Administration titled, “340 Rebate Guidance.”
- A notice from the Food and Drug Administration titled, “Safety Labeling Changes–Implementation of Section 505(o)(4) of the Federal Food, Drug, and Cosmetic Act; Draft Guidance for Industry; Availability.”
- Non-Opioid Analgesics. An FDA notice titled, “Development of Non-Opioid Analgesics for Chronic Pain, Draft Guidance for Industry; Availability.”
- Investigational Drugs. An FDA notice titled, “Expanded Access to Investigational Drugs for Treatment Use: Questions and Answers; Guidance for Industry; Availability.”
- Nutrition:
- Head Start. A notice from the Administration for Children and Families titled, “Publish Request for Information: Nutrition Services in Head Start Programs