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Health Affairs This Week places listeners at the center of health policy’s proverbial water cooler. Join editors from Health Affairs, the leading journal of health policy research, and special guests as they discuss this week’s most pressing health policy news. All in 15 minutes or less.
Hello, and welcome to Health Affairs This Week. I'm your host, Jeff Beyers. We're recording on Tuesday, 05/13/2025. I know I've talked about the May 29 event for insiders on the changes at the FDA coming up quite a bit. Sign up for that.
Jeff Byers:But today, I wanted to highlight that next week, we are releasing as part of our insider program, our first trend report for insiders. It's on the use of AI in healthcare, and you don't wanna miss that. In addition to the report, you get access to all the exclusive events that we host, as well as different newsletters we publish on drug pricing, the economy, and more. Sign up. If you are more into free stuff, you know, what's your deal?
Jeff Byers:But also we have a free event on May 27 with Clifford Co. And Catherine Orenstein titled How Can the New Age Friendly Hospital Measure Transform the Inpatient Experience? Sign up for that if that's also of interest. Today on the pod, we have Katie Keith to discuss all the different goings ons in the administration this week. It's been a big week as well as some recent happenings.
Jeff Byers:From the Big Apple, Katie Keith, welcome back to the program.
Katie Keith:Thank you as always for having me.
Jeff Byers:Yeah. So you're in New York currently. What are what are the streets saying in New York? Are they talking about health policy?
Katie Keith:They might be, but certainly not as much as DC.
Jeff Byers:Yeah. So speaking of, you know, great transition to, you know, what's happening in DC. So we are gonna talk about it is Tuesday. There's been a lot happening on the regulation front for proposed rules and markups and texts being released, and I'm not really familiar with it all, so that's why you're here. But before we get into that, wanted to talk about the current state of rulemaking.
Jeff Byers:So earlier this year, HHS announced it would reverse soliciting public comments before it issues regulations affecting government benefits or grants. What can you tell us about this?
Katie Keith:First, would say well done. That was a good summary. What you're referring to is called the Richardson waiver. It's called that because it was put in place by then Department of Health and Human Services Secretary Richardson under the Nixon administration. So we are talking about a policy that has been in place for about fifty years, that secretary Robert F.
Katie Keith:Kennedy Jr. Rolled back in February of this year. And what that policy had done, and again, had been maintained by every administration since Nixon, was really say HHS prioritizes public comment. We want input from the public. We wanna give notice before we make changes to things like public benefits and contracts and grants.
Katie Keith:Even if we don't have to, under this law called the Administrative Procedure Act, we should. And it was sort of internal HHS policy that said, we need to give notice and allow an opportunity for the public to give us feedback before we make changes that can affect those sort of categories. And I wrote about this. You can see more of the details there. The other thing that the prior Richardson waiver policy had said is it's sort of disfavored to invoke what we call the good cause exception under the Administrative Procedure Act.
Katie Keith:So and maybe the step back is the APA, the Administrative Procedure Act, is a law that gives you the rules about the rules. It lays out all the requirements that agencies are supposed to follow, when they are changing federal regulations. It's you know, an agency will typically publish to give notice to the public, and then take comment for you know, there's no set period of time, but generally, let's say thirty or sixty days. Then when they finalize that rule, they have to, you know, review those comments, generally respond to them, and finalize the rule. It's you know, the idea is that transparency improves the rulemaking process.
Katie Keith:It gives the agency feedback, especially from those who are gonna be most impacted, whether it's patients or health care providers or insurance companies or states, for example. So health care is extremely complex as all of your regular listeners know, and the idea that you could make these changes without letting someone know in advance or giving the opportunity to sort of be heard or get more data or get more feedback is really, really challenging. And yet that is exactly what sort of pulling back on this Richardson waiver is doing at HHS. We haven't yet seen or, well, speaking for myself, I haven't yet seen HHS leverage this yet. They have not sort of pulled back on a ton of things yet.
Katie Keith:I have a couple examples that I can give, but I think more is coming. And so we could talk about that as well. And then maybe we're going to get to this, but this is not only just happening at HHS. It's really happening kind of across the agencies, due to some pretty high level directives from president Trump.
Jeff Byers:Yeah. I do wanna ask about, some of those public comments and about the state of those. But before that, you wrote in Health Affairs Forefront about, from a broader perspective about a president's role memorandum that encourages federal agencies to be less transparent and sidestep public input on major regulatory changes. Is that any different than what you're talking about from HHS? Or walk me through that.
Katie Keith:No. It's quite similar. So, really, I think this is a Trump administration wide project. And I think the president, and I would say the director of the office of management and budget, I think, clearly have a a vision for a deregulatory agenda that they wanna see across the board. And so far, they've been extremely aggressive at, say, the department of energy.
Katie Keith:Even the department of justice has already rolled a lot of things back. The consumer financial protection bureau, the CFPB, has rolled a bunch of things back. I'm still waiting and watching for a more significant impact in health care, but I think it is coming, which is why I was so excited that you wanted to talk about this because I think there is a cloud of this deregulatory agenda really hanging over the policy that the Trump administration is going to do. And what it means is they're moving extremely quickly. I think that is the part for listeners to really pay attention to.
Katie Keith:If you don't have to do this, you know, or even try or attempt to do notice and public comment, you can just be putting out what we call interim final rules. You can just be revoking policies. And so what we're seeing examples is just short notices being published in the federal register that say, here's the 20 things that the consumer financial protection bureau is pulling back today, and no one gets to say anything about it. You shouldn't rely on it. And in the meantime, the agencies aren't gonna enforce it either.
Katie Keith:So it it could it could be extremely disruptive without any opportunity to weigh in.
Jeff Byers:Yeah. So going back on that, like, what you mentioned a vision. What is this vision? Or, like, what's the purpose of this vision?
Katie Keith:I I mean, I think it's a deregulation writ large, and it's probably an ideological vision. And I'll give one example. A different executive order that the president signed, is a requirement that agencies that want to do new regulations have to pull back or identify 10 regulations that they don't want anymore, that we call it sort of the 10 for one executive order. So that is not the most rationalized thing in the world. It is purely a numbers game of we just want fewer regulations.
Katie Keith:So I think that is part of the the approach and the vision. During the first Trump administration, they had a five for one regulation EO, and here they really upped the stakes by taking it to 10 to one. And so we're still kind of watching to, again, see how that will play out, but you're really seeing it across the board for different industries. President Trump signed, an executive order recently specifically to say, I want you to repeal this Department of Energy rule that defines showerhead in a certain way. And you should have no notice and comment, and that change is going into effect in thirty days.
Katie Keith:So those are the types of examples that we're seeing, very, very specific, and I'm waiting for that to come to the health care world.
Jeff Byers:Yeah. So on the public comment thing, question, how it's gonna be a roundabout way. And just to get to, like, how helpful are public comments? So, you know, we all know about the if you're a listener of a certain age, the Boaty McBow face scandal. I don't know if it's scandal, but event where the public named a boat.
Jeff Byers:You know, there was a public contest, naming contest. Here in Richmond, Virginia, they had a naming contest for the baseball team Richmond Flying Squirrels. I'll let you decide if you like that name. But there's been talks, so there's that of just, like, people kinda messing around with comments. Generally, I would imagine, like, some of these people are informed, more informed than the general public if they're commenting on regulations.
Jeff Byers:But people that are definitely more informed are potential lobbyists. So there always has been some talks about a bunch of comments from lobbyists in these public rulemaking. So, like, how helpful is this process from what you can tell?
Katie Keith:Yeah. Helpful seems like a value word. I will say, I do think the comments make a difference. And I've I found that being in government myself. I don't know if they will make a difference to this administration that seems very, you know, intent on doing what it wants to do.
Katie Keith:And I could give some examples where the first Trump administration received, I think, probably hundreds of thousands of comments and didn't change a word in the final rule, that kind of thing. But I do think it is. The comments are valuable if only because they put people on notice of the changes. And then it's an opportunity, I think, especially for you know, you sort of mentioned lobbyists, but I think industry comments are often helpful to talk about the burden to you know, government agencies only know what they know. And so giving more of that sort of operational feedback, sometimes it's used to push compliance states out to give more industry and states and others more time to to adjust to the rules.
Katie Keith:Sometimes it results in true tweaks. So I I think comments are extremely valuable in addition to sort of the the value of, in and of itself, being able to comment and give your feedback on something that's happening. So there there's that sort of intrinsic value to it as well. But I do think that comments can make a difference if they are being considered in an open minded way. I think what I I think what we're seeing the trend across this deregulatory agenda is there's not a lot of interest in taking that, you know, taking that feedback or even seeing what it is.
Katie Keith:And so we'll sort of see where they go from here. But I I'm expecting them to get I think particularly after we, the collective we, gets through, this budget reconciliation process, which I know we're gonna talk about, I am expecting, I think, the Trump administration to turn even more full heartedly, if you will, to rulemaking and rolling back some of this stuff, and I'm expecting them to do a fair amount of it, without notice and comment.
Jeff Byers:Okay. So before we move on to budget reconciliation, is there anything else that you wanna talk about from deregulation?
Katie Keith:I think one one of the reasons I'm anticipating more action from the Department of Health and Human Services on health care policies, is in part because I know agencies have, were directed to go through a new process to identify all the regulations that should be pulled back both because they don't match this administration's policy priorities, but also because agencies have been asked to identify rules that aren't consistent with supreme court laws. And so agencies are doing they've been doing that work quietly by themselves. They had to submit a big package and send over their list to the office of management budget in mid April. And I think we're beginning to see some of that come to fruition as I'm you know, have been giving examples of other agencies posting guidance, rescinding a whole bunch of stuff there. So just want listeners to know that there was a whole process that is going on behind this, and I think that is going to be ongoing work that the agencies are doing quietly to identify the things they want to roll back without notice and comment.
Jeff Byers:Looking to the budget reconciliation, new text was released this week. A lot of things were released this week. There's the drug pricing executive order, which we are not gonna get into. A lot of stuff we're watching. What are the top line findings for health care policies that's that's come out, full stop, this week.
Katie Keith:What an easy question. So it's only we are recording on Tuesday. That's right. That's a caveat. It has already been a very busy health policy week.
Katie Keith:You mentioned the executive order on prescription drugs that the president signed on Monday. The Centers for Medicare and Medicaid Services also issued new guidance on the Medicare drug negotiation program, which I know some of, my favorite prescription drug experts will be writing about for forefront. There was a new proposed rule on Medicaid provider taxes also coming out of CMS. So there's a ton of activity, and it's only, you know, day day two of a very long week. I know I and many other people all around DC have our eyes glued to the markups for the house energy and commerce committee and ways and means committee that are occurring later day on Tuesday.
Katie Keith:But for this, you know, mega budget reconciliation package that is currently moving through the house, happy to talk about some of what's in there. It is a huge health care bill that, you know, if enacted, would represent the largest cuts to Medicaid in the history of the program. You know, more than not even more than at least thirteen point seven million people will be newly uninsured in 02/1934. As a result, lots of disruption coming for health care if this bill makes it across the finish line.
Jeff Byers:Yeah. So let's dive in. You mentioned Medicaid work requirements and you mentioned the CBO estimates for how many people might lose health insurance based on this. But, yeah, what what are the details? So I I noticed some Medicaid work requirements stuff.
Jeff Byers:I have in my notes capping SDPs, which is a great acronym that I don't know what it is.
Katie Keith:State directed payments.
Jeff Byers:Thank you. So yeah. So what's in there?
Katie Keith:Another, soft ball Yeah. On health care.
Jeff Byers:Let's start with Medicaid work requirements.
Katie Keith:What can
Jeff Byers:you tell us about what's in there for that?
Katie Keith:Yeah. So, I mean, a few top lines, and, you know, I and others will be publishing on this and on forefront so folks can dig in on all the nitty gritty details. But mandatory Medicaid work requirements would so every state would have to do this. I think it would result in huge administrative burdens for enrollees and states to actually administer this program. We know it results in coverage losses, I think it will be exacerbated by some of the other red new red tape that would be being imposed through the bill.
Katie Keith:So it would essentially require enrollees to show that they are doing work requirements or school or other sort of community engagement rights for up to at least eighty hours a month. States would be required to confirm that on at least a monthly basis, but they could do it more often if they wanted. They could do weekly checks. And, you know, all of the experience, and Sarah Rosenbaum has a great past piece on this, laying out the evidence and data and what we know about Medicaid work requirements shows that, you know, it results in coverage losses because these are complicated requirements to have to follow-up on. And we know from data from folks like KFF that the vast majority of Medicaid employees are working.
Katie Keith:This to me seems like a huge solution in search of a problem in many ways, and I think it is designed to reduce the Medicaid roles in this instance. And I I sort of mentioned this. It's not just the Medicaid work requirements. There's a whole bunch of other, you know, again, new red tape that's being imposed. Eligibility redeterminations would be happening more frequently for the expansion population.
Katie Keith:There'd be a lot more, you know, address verifications and all kinds of things there. So just lots and lots of burdens. For beneficiaries themselves, there'd be new cost sharing requirements, so folks would pay higher. So so for those who are able to jump through all those hoops already and keep their coverage, you would face higher costs. And, you know, there's a whole bunch of stuff in there on, I think, limiting state flexibility for how they fund and finance, their state Medicaid program.
Katie Keith:So there seems to be, this idea that you can lock in what's currently happening, but stop states from raising provider taxes or doing other changes like that. And I think it's gonna really tie states' hands going forward even as this bill loads up on all the new stuff that states are gonna have to do to manage their programs there. Two, maybe other things on the Medicaid side to flag, the bill would defund Planned Parenthood. It doesn't say the words Planned Parenthood, but it seems very targeted at, that organization and prohibit states from using federal funds for the treatment of gender dysphoria, for kids. So that would be a significant new policy.
Katie Keith:And that's everything I'm saying is, like, scratching the surface on the Medicaid front. And then there's a whole bunch of Affordable Care Act changes too.
Jeff Byers:On the Medicaid front, so, again, I don't know. I don't think I'm a policy wonk per se, but, like, my cursory reading, so correct me if I'm wrong, that they're are they putting more burdens on states to enact the Medicaid program in general? And to what end if that's correct in your reading, just why?
Katie Keith:I think it's definitely correct that there will be many more burdens on states. I think those paper it's it's a lot of paperwork burden. It's a lot of, you know, checking eligibility. It's having beneficiaries come in and report that they'll I think the burdens that are going to be placed on states are going to be pushed down to enrollees who are inevitably not going to be able to keep up with this complicated system of what they and we have evidence from this. You don't have to take my word for it.
Katie Keith:It's when this was rolled out in Arkansas. People lost coverage not because they weren't working or doing the community service that they were supposed to be doing, but because they couldn't they didn't know or weren't able to submit the paperwork to prove that they were doing all those things. And in fact, in Arkansas, you saw people lose their jobs because they lost their Medicaid coverage, and so it's this perverse thing. So I think the requirements on states who are designed to get pushed down to enrollees and, again, inevitably result in in coverage losses that you you sort of mentioned the the CBO is already suggesting. And so the top lines just from the energy and commerce draft, again, we've got multiple committees doing multiple things.
Katie Keith:All of this will get wrapped up, but they're moving really quickly, so we don't have a full picture yet. As of Tuesday, the overall energy and commerce bill would cut at least 715,000,000,000 from health care. That's both Medicaid and Affordable Care Act, and they estimate that at least 13,700,000 people would be uninsured. More people would be uninsured in 2034 based on this. I'm saying at least very pointedly because I think everyone expects those numbers to go up as CBO is able to continue to do its analysis.
Katie Keith:There's been certain things where they haven't been able they haven't had time yet to look at, you know, what's the interaction of this Medicaid change with this marketplace change? Because, of course, all of this is additive, and so they have said as much that they think the coverage losses are gonna go up. You know, the ways and means bill has some things that are gonna result in, I think, people losing coverage as well. So double digit coverage losses and, you know, hundreds of billions of dollars being taken out of health care if this becomes law.
Jeff Byers:So you mentioned we're only really scratched the surface on Medicaid. So looking out from Medicaid, just like we're not gonna be able to cover everything in this time. So was anything surprising to you in the text of the reconciliation bill?
Katie Keith:I don't think anything is surprising in that the top lines of this budget reconciliation reconciliation resolution suggested these changes had to be sweeping, and I think that's what folks have been sounding the alarm about for a very long time. And I think the scope and degree of the changes is still so overwhelming and significant even as I read it. I think maybe I had an understanding of what the top line policies would be, but getting the drafts, reading through it, seeing all of it together, and trying to understand the impact that would have on patients and states and, frankly, state economies and health care providers and uncompensated care. And it it will I I don't think you can overstate the impact that this would have on the health care system. So I is that surprising?
Katie Keith:I don't know, but it is it it def I definitely felt the impact of, what would happen if if this becomes law.
Jeff Byers:So every episode could be someone's first, and maybe this is everyone this is someone's kinda introduction into health policy world or or deeper into the health policy world than before. With that, like, what are the next steps for this package?
Katie Keith:Yeah. Well, a, don't let this be your last. You're listening to this and want to run
Jeff Byers:That's right.
Katie Keith:In the opposite direction because I not blame you. Yeah. That was my pitch. There you go. No.
Katie Keith:In terms of next steps, so, again, recording on Tuesday. This afternoon, two of these committees, House Energy and Commerce, House Ways and Means Committee, are doing a, quote, markup of the bill, so there'll be amendments. Some people are suggesting, you know, these could run all night. So we'll see sort of what state those bills are at the end of that process, and then it will continue to move through the house. So there'll be other house hearings.
Katie Keith:All of that will get packaged together. It will go to the house floor at some point. And then once that's done, it will go over to the senate. So this is a long slog. I don't think we've seen the end of even the policy changes, and so I think folks should absolutely stay tuned both to the podcast and health affairs forefront where there will be a ton of analysis as this continues to move through.
Katie Keith:But much more to come and sort of a what could be a devastating starting point. Let's put it that way.
Jeff Byers:Yeah. You mentioned Health Affairs Forefront, our digital publication outside of the journal. This will publish on Friday. On this particular aspect of it, what what's in the hopper for you to discuss?
Katie Keith:I am certainly I could speak for myself, which is I am working on a very long, wonky, detailed, as is my style, summary of what is in these packages as of their sort of introduction or consideration for these markups. And then I think we'll use that as the baseline to kind of update over time as it moves through the process. Anything can happen. You know, there's already been some outcry from governors about some of the cuts. I think a lot of the hospitals and provider associations are maybe mobilizing against some of the pieces of this given that so I am expecting sort of changes over time.
Katie Keith:Certainly, maybe changes by the time this gets through the senate, which has its own rules that we haven't talked about. But president Trump and Republicans in congress seem quite motivated to get this done quickly. So, you know, I think count on us here to be doing the quick turn analysis that folks need, recognizing that, things will certainly change over time.
Jeff Byers:Yeah. And what's that word count currently?
Katie Keith:Don't ask me. You don't wanna know.
Jeff Byers:Well But
Katie Keith:it'll be linked below everyone. Yeah.
Jeff Byers:That's right. That's right. Well, Katie Key, thanks again for joining us today on health affairs this week. To you the listener, if you enjoyed this episode please send it to The Budget Hawk in your life and we will see you next week. Thanks all.