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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 Byers. We're recording on 02/26/2025. As a heads up, we will have released a new issue for our March 2025 issue, that comes out by the time this episode publishes. The issue's main topics are pharmaceuticals, private equity, child health, and more.
Jeff Byers:Check out the link in the show notes. One of the papers in that issue will be doing a live taping for a health policy on March 12. Rob Lott will chat with Yasha Sweeney Singh on her upcoming paper in the March issue on private equity's effect on health care staffing. So, please join us to ask some good questions for Yasha Sweeney and to Heckel Rob. But today, I'm joined by Rebecca Pfeiffer from HealthCareDive to talk about what's been happening in Washington DC of late.
Jeff Byers:Rebecca, welcome back to the pub.
Rebecca Pifer:Thanks for having me.
Jeff Byers:Yeah. So as a quick reminder, we're recording this at the February, and this episode will go live on March 7. So let's, acknowledge upfront that maybe some of this information will be a little bit out of date by the time you, the listener, hears this. But, Becca, you have boots on the ground in Washington, DC. You know, what to sound like a middle aged man asking, a younger person, what's up?
Jeff Byers:What are their vibes like in DC?
Rebecca Pifer:Great question. Vibes. Well, to your point about I'm glad you mentioned that we're recording this a week ahead of when it's going to be published because things in DC have been moving incredibly quickly, obviously, under the new administration. So I think there's a definite sense of uncertainty. There's been a number of layoffs that have affected a lot of people in the city and outside of it.
Rebecca Pifer:So I think vibes are somewhat, uncertain would probably be the best word.
Jeff Byers:One thing that isn't uncertain is, yesterday, the house passed the budget resolution, and that has some potential Medicaid implications. Can you give us a sense of what happened or what's going down with the budget resolution currently?
Rebecca Pifer:Yeah. So last night, as you mentioned, the house passed the budget resolution. So basically, if people aren't as familiar with that, it's essentially a wish list for spending from the the House Republicans. Right? So it passed a very, very narrow vote.
Rebecca Pifer:I think it was two seventeen in support and two fifteen against. Now it will move on to the senate. The senate could potentially negotiate some changes to it, but the house and the senate need to get the language exactly the same between their two bodies before, they can move on to what's called the reconciliation process, which then allows them to actually figure out how we'll put this policy blueprint in place. So, basically, the budget calls for it wants to reduce spending by $1,500,000,000,000, and most of this is to pay for the president's tax plan. A lot of that could come from health care.
Rebecca Pifer:So the budget asked the energy and commerce committee, which has oversight over major federal health care programs, to cut $880,000,000,000 in spending. And since, the president and top Republicans have promised not to touch Medicare, which is the major federal insurance program for, for seniors and some other individuals, Most of that is gonna come from Medicaid.
Jeff Byers:Just, so, again, this will be published in on March 7. Do you think there'll be any any movement from the senate to get to that resolution, or where might we be when this actually drops?
Rebecca Pifer:That is a really good question. I think it really just depends on whether or not the senate wants to try to push through the budget resolution as it stands without changing anything or whether they wanna change anything. As I mentioned, the house and the senate need to have precisely the same language before the process can move forward, and speaker Mike Johnson had a difficult time getting it through the house. There are conflicting wings of the Republican party. Some people think that, they should cut more spending.
Rebecca Pifer:The tax cuts are going to cost more than the savings that are outlined in the budget. So some Republicans think that the government should try to cut more, and then some moderates want less steep cuts. So that's making it sort of difficult to coalesce around a plan. And that debate will also be happening in the senate. You know, some people in the senate wanna pull back on some of the spending cuts.
Rebecca Pifer:Some people might potentially wanna remove the provision to raise the debt ceiling. There could be movement on it by next week. There could be not. It's really tough to say.
Jeff Byers:Yeah. So it sounds like we're setting ourselves up for a potential, another another appearance, to discuss what actually happens.
Rebecca Pifer:Definitely happy to. And it's also I feel like it's worth noting that when the house and the senate when they arrive at the same point on the budget resolution, it's going to be many more months before we get to the actual package that will put these policies in place. So we're really just at the the very start of a very long process.
Jeff Byers:You know, and then stepping back, generally, from as far as we can tell, what do we know about, the Trump's administration health care agenda?
Rebecca Pifer:Yeah. It's a very, very good question. I think a lot is up in the air. There are certain things that we know based off of Trump's first term that he's likely to probably continue, but, obviously, a lot in the environment has changed, since then. There's also uncertainty from the people that, the president has selected for top health care roles, what their agendas are.
Rebecca Pifer:And then as we've talked about, Republicans have very tight margins in Congress, so there's a lot of complications with what they could actually get done. But for maybe just starting with health care services, the president and Republicans, generally, they want to curtail abortions, and they want to promote IVF and other fertility treatments. The president recently signed an executive order around that, and there's sort of a a real conservative focus on incentivizing more Americans to start families. He also just yesterday signed an executive order directing agencies to crack down on hospitals and insurers that aren't transparently publishing their prices, which was, you know, a policy he had in his first term. And the goal is to make it more easy for consumers to shop between health care services in the instances when that's possible.
Rebecca Pifer:So that sort of might suggest that, his administration is going to sort of renew its focus on price transparency that we saw in his first term. When it comes to major federal health care programs, I think the administration is viewed as a net negative for the Affordable Care Act and for Medicaid, as we've already discussed with, you know, potential big cuts to Medicaid and the budget there. And then, it's viewed a little bit more positively for Medicare and for for privatized Medicare Advantage plans. So happy to get into some more specifics there, but that's probably the a high level view.
Jeff Byers:Yeah. No. That's great. I guess another thing that I I didn't hear you mention, but also maybe worth noting, have you heard anything from your reporting about the agenda on, like, the IRA or or Medicare drug prices or drug pricing in general, not just Medicare?
Rebecca Pifer:For sure. So I don't cover pharmaceuticals as much. I've done a lot of work with pharmacy benefit managers, but I'm not as familiar with the administration's stance towards the IRA. We do know that he hasn't moved to roll back the negotiation process at all in his early days, which was something that people thought he might do. So far, it seems like he's continuing Medicare's ability to negotiate drug pricing.
Rebecca Pifer:So that's potentially a a good sign for the IRA there. But, unfortunately, yeah, I'm not as familiar with the specifics of that. That's not really in my coverage zone.
Jeff Byers:Fair enough. And, thanks for that. And then just, again, acknowledging that, things are moving along at a at a somewhat quick pace, for news before we publish this. I read a report from I don't know if this was on HealthcareDive or any of the IndustryDive properties, but, I'm reading from Axios that and I quote for the headline from today, February 26, White House orders agencies to prepare for large scale firings. So there's, preparations and already have been some layoffs in the federal space.
Jeff Byers:Could you talk about those layoffs in the health care space?
Rebecca Pifer:Definitely. Yeah. So, the Trump administration mostly through the Department of Governmental Efficiency or DOGE, which is essentially a executive committee that's that's helping with these cuts led by Elon Musk. They have moved really, really quickly to reduce the size of the federal workforce. So there's no formal tally from the government about how many workers have resigned, or been let go, since the Trump administration assumed office.
Rebecca Pifer:It's certainly in the tens of thousands, and it could be significantly higher. So to date, as I mentioned, this mostly has taken place through two avenues. So, a large number of federal employees were offered financial incentives, like, months of paid leave if they left their jobs early. And then there's also been layoffs of probationary employees, which are essentially employees that are new to their positions. They're not on probation for, poor job performance or anything like that.
Rebecca Pifer:They're just newer to their positions, including people who've recently been promoted. So they just don't have the same protections as career staff, so they can be let go more easily. And, yeah, as you mentioned, Doge is turning more now to formal layoffs in sort of the next phase of its plan to shrink the federal workforce. So because, it's a formal process, it can take longer. They have to justify why the employee is being fired, and then the employee can appeal the decision.
Rebecca Pifer:But that's sort of the next phase. So these cuts have been really, really broad. They've been across a range of agencies. But in health care, they've been yeah. People have been let go from a slew of HHS agencies like the CDC and the CMS and the FDA and the NIH.
Rebecca Pifer:So they're they're really across the board.
Jeff Byers:Yeah. And then, again, my apologies for quoting Axios to an industry dive, employee. But That's
Rebecca Pifer:okay. Axios does great work.
Jeff Byers:That's right. The same Axios article from Emily Peck says there are about 2,300,000 federal employees, not including the postal service, just to have some context for those numbers there. And then kind of going back to the policy aspect of it, Medicaid and Medicare are both politically sensitive programs. What are you hearing from sources about the future of these programs? You mentioned in the sentiment Medicaid is a net negative or Medicare and Medicare Advantage specifically is a net positive.
Jeff Byers:What are you hearing? What might we see?
Rebecca Pifer:Maybe starting with Medicaid just because it seems like there's going to be potentially more near term action. So Medicaid is the it's the insurance program for low income people in The United States, and Medicaid really expanded over the pandemic. And since then, it's contracted a little bit because of eligibility checks that states have had to do. But right now, Medicaid and the children's health insurance program, they cover about 80,000,000 Americans. So it's major, major, major program.
Rebecca Pifer:And Republicans right now are likely going to have to turn to Medicaid and cut Medicaid to reach the the targeted cuts that they wanna reach. Right? Cuts to Medicaid could take a lot of different forms, which I'm also happy to go into. It gets a little wonky. So I can I can avoid it if that's that's less of an interest?
Rebecca Pifer:But pretty much everyone thinks that Republicans are going to try to cut Medicaid this year because the budget essentially forces them to, the budget proposal. And cuts to Medicaid impact a lot of different actors. Reducing federal Medicaid spending essentially puts the burden on states to either increase their spending to keep services and eligibility the same, or states, which are already really stressed to cover their share of Medicaid spending, will have to cut eligibility or services. And that's assuming that the federal government doesn't decide to do something like work requirements, which would cut eligibility, on its own. So depending on what the federal government and what the Trump administration decides to do, a certain number of people are are going to lose Medicaid coverage in The United States, which, you know, has obviously a major impact on the beneficiaries themselves, but also has a very major downstream impact on health care providers.
Rebecca Pifer:Providers already say they're not paid enough by Medicaid to cover the cost of patient's care. And then if a greater share of those patients are uninsured, that raises the burden of uncompensated or unpaid care on providers, especially in low income areas where there's a greater share of Medicaid individuals and that could, you know, pressure providers financially, potentially put more providers out of business, and then it will also lower funding for insurers that contract with states and managed care programs. So very far reaching impact of of these potential cuts on Medicaid depending on what the federal government decides to do here. Mhmm. On Medicare Yeah.
Jeff Byers:Real quick on that. Not to bait and switch on listeners, but, failed affairs is hosting a insider only event on March 19, specifically on Medicaid's uncertain future. So we have some great speakers lined up for that, including Jennifer Talbert from KFF and Aditi Fasan from Children's Hospital of Pennsylvania and more. We'll put the links in the show notes so that if you're not an insider, sign up to be an insider, and you can also watch all of our past events. But yeah.
Rebecca Pifer:Good pitch. You know?
Jeff Byers:Doing a quick plug.
Rebecca Pifer:No. No. No. It's important. It's important.
Rebecca Pifer:I totally get it. No worries. So yeah. Then quickly on on Medicare. Medicare is it's politically relatively impervious.
Rebecca Pifer:It's very difficult to touch. Seniors are such a powerful voting block. So the Trump administration has promised it's not going to touch Medicare. So no cuts coming from Medicare. And the big question with Medicare is what's going to happen to Medicare Advantage Plans.
Rebecca Pifer:So Medicare Advantage Plans, they're basically privatized Medicare plans where private insurers contract with the federal government to provide Medicare coverage to seniors. And met MA plans have grown really significantly, over the past decade, and that that growth is slowing a little bit according to the most recent enrollment data we have. But there's a lot of controversy over Medicare Advantage plans. They can restrict benefits in a way that traditional Medicare plans can't. So Congress has been more skeptical of the plans recently.
Rebecca Pifer:The Biden administration promulgated some regulations to try to cut back on overpayments to the plans, and that's sort of the environment that plans are in, at the outside of the Trump administration. And then the Trump administration could be better for plans because the Trump administration could raise reimbursement to them. Reimbursement rates were a little more positive under the Trump administration than they were under the Biden administration. But at the same time, plans are more there's perhaps more scrutiny on the plans now than there was four years ago. So another area where potentially it's a little tricky to say precisely what's going to happen, but net net, the Trump administration is viewed as as friendlier to the Medicare Advantage industry than the Biden administration was.
Jeff Byers:So kinda transitioning then, you know, Rebecca, thanks again for joining us on Health Affairs this week. Always a pleasure to have you here. Hopefully, we can have you back shortly. But kind of transitioning to, like, what are you watching in the, health care business and politics space this year?
Rebecca Pifer:Yeah, a lot. A lot. So definitely Medicaid cuts, what shape they take, if any, during the reconciliation process. Same as well. We didn't we haven't really talked about the Affordable Care Act as much, but there's, very generous subsidies for ACA plans that have caused record enrollment in ACA plans at the moment.
Rebecca Pifer:And, those subsidies are scheduled to expire at the end of the year if congress doesn't act to preserve them. So definitely keeping an eye on that because that has huge implications on both the, you know, 24,000,000 people who have ACA plans and then also the insurers that offer that coverage, keeping an eye on both those things. And then I'm really interested in the FTC and the DOJ and how they're gonna operate under Trump. That's that's another area sort of where potentially peep people have made a really different prediction based off Trump's first term versus now about what they'll do. Like, there's a a really interesting ideological split among Republicans right now about antitrust efforts and and how exactly they should combat, or should they combat, really, consolidation and and m and a.
Rebecca Pifer:And recently, Trump's FTC chair, Andrew Ferguson, elected to keep stricter merger guidelines that were put in place in 2023. So that was sort of a surprise for some people in the industry. So, definitely interested in in, how the FTC and how the DOJ under the Trump administration will operate and what that means for, for the companies I cover. And then the other thing that we haven't really talked about is PBMs, pharmacy benefit managers, what stance regulators in the Trump administration will take towards them. You know, they were major PBMs, Caremark and OptimRx and Express Scripts.
Rebecca Pifer:They were sort of targeted, in their view, unfairly, but they were sort of targeted by the Biden administration for and by some, you know, some lawmakers for allegedly contributing to higher drug costs and for what their position in the pharmaceutical supply chain, what effect that had on drug costs. And then Trump last year said he plans to, like, take down the middlemen, but, obviously, we haven't seen anything concrete from his administration yet on that. So that is also a big area of interest for me.
Jeff Byers:And for those of you that are interested in, peer reviewed research and evidence based on, PBMs and, Affordable Care Act and antitrust, please subscribe to, the Health Affairs Journal. If you're wanting late some late breaking news in those areas as well, you can check out health care diet for more coverage on that. Rebecca Piper, thank you from joining us today. Is there anything you wanna promote before we we send, the listeners on their way?
Rebecca Pifer:No. Thank you so much for having me. I guess, just to add on quickly to what you said, subscribe to HealthCareDive, if y'all haven't yet. We have a daily newsletter that goes out. We cover a variety of of hard news.
Rebecca Pifer:We do a lot of analysis into the trends that are shaping the sector and, totally free to sign up. So, yeah, that's it for me, and thanks for having me, Jeff.
Jeff Byers:Rebecca Piper, thanks again. To you, the listener, if you enjoyed this episode, please share it with a friend, leave a review, all of that good stuff, and we will see you next week.