Summary
The Senate is back in session this evening and will attempt to put its mark on the House-approved One Big Beautiful Bill (H.R. 1). Most of the Senate’s deliberations will take place behind closed doors, and Senate Majority Leader John Thune (R-SD) will have to manage the competing priorities of the Medicaid moderates, Sens. Josh Hawley (R-MO), Lisa Murkowski (R-AK), Joni Ernst (R-IA) and Susan Collins (R-ME), who want pull back some of the Medicaid changes included in the House-version, such as the freeze on provider taxes, and the budget hawks, Sens. Ron Johnson (R-WI), Mike Lee (R-UT), and Rick Scott (R-FL), who want to go farther on spending cuts.
In Senate Minority Leader Chuck Schumer’s (D-NY) Dear Colleague Letter, he highlighted how Democrats are preparing to target a “litany of policies” in the Bryd bath process that are in “clear violation of the reconciliation rules and in some cases, an assault on our very democracy.” Axios has also highlighted the following provisions that could be dropped from the bill through the Byrd bath:
- The REINS Act (R. 142), which would authorize Congressional review for certain regulations;
- Prohibiting Medicaid coverage for gender-affirming care;
- The ten-year moratorium on state artificial intelligence (AI) regulations;
- An expedited permitting process for certain natural gas energy pipeline projects; and
- Fees for asylum seekers.
The Senate can only afford to lose three Republican votes, and it is leadership’s goal to have the package to the President’s desk by July 4th, just four short weeks away.
FY 2026 Appropriations
Alongside advancing the budget reconciliation package, Congress now also turns its attention to fiscal year (FY) 2026 appropriations committee markups. This follows Friday’s release of President Trump’s budget request, which called for a 26.2 percent budget cut for the Department of Health and Human Services (HHS)(Impact summary). While the budget request serves as a high-level roadmap for the administration’s policy goals, Congress retains control over federal spending. Early reactions suggest the proposal will face substantial headwinds. Senior members of both parties in Congress have expressed concerns about the scale of proposed cuts, with some Republican appropriators signaling that reductions of this magnitude could face resistance. Government funding expires on September 30, along with a package of health care extenders, including the COVID-19 telehealth flexibility extension.
Regulatory Update
The Office of Management and Budget is reviewing the following:
- Proposed CY 2026 payment updates for physicians, hospital outpatient departments and ambulatory surgical centers, home health agencies, and end-stage renal disease facilities. These proposed rules are typically published in June or July
- 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 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.
- ACA Marketplace. A final rule with a series of proposals intended to address improper enrollments in Marketplace coverage and reduce improper federal spending on advanced premium tax credits (IHPP summary). If finalized as proposed, 750,000 to 2 million fewer individuals would enroll in Marketplace coverage in 2026.
- 340B Program. A notice titled, “340 Rebate Guidance.”