Lawsuit Challenges Work Requirements – 24 States and the District of Columbia filed a lawsuit challenging CMS’ interpretation of the recently released work requirements. In particular, the lawsuit focused on the interpretation of medical frailty. In the regulation Medicaid beneficiaries must have a medical condition and for that condition impair that individual’s ability to meet community engagement requirements. Work requirements are scheduled to into effect January 1, 2027 although some states, like Nebraska and Montana, will have their work requirements go into effect before then.
Paragon Report – The influential Republican connected think tank, the Paragon Institute, released a new report this week calling for federal funding cuts to all lines of business. Prior Paragon ideas were included in the reconciliation bill and the current Administration’s regulatory ideas. The recommendations in the report included:
- Medicaid- Cuts to FMAP (both for expansion population but also for other areas) , continue to reduce provider tax/state-directed payments flexibilities, penalize MCO via capitated payment rate changes for fraud or improper billing patterns.
- Medicare- Instituting site-neutral payments, reverse Part D redesign, make changes to risk adjustment, benchmark, and quality bonus to reduce MA payments, and reform Medigap to reduce affordability.
- ACA- Provide CSR fundings, reform APTCs, and relax MLR requirements.
- Commercial Group Insurance- Cap tax exclusion for Employer-Sponsored Health Insurance.
ACA Enrollment Report – HHS released a 2026 effectuated enrollment for the ACA Marketplaces. Overall, the report found that ACA Marketplace enrollment declined by about 3 million enrollees as of 4/15/2026 compared to 2025 (enrollment declined from 22.1 million to 19.2 million). The report also focused on HHS’ belief that fraud continued to be a serious problem in the ACA Marketplace and that they would continue to take efforts to reduce improper enrollment.
Prescription Drug Tariff Reminder – A quick reminder that Section 232 Tariffs that would impose 100% tariffs on covered patented drugs (generally brand drugs) is scheduled to start July 31, 2026 for certain companies and fully go into effect September 29, 2026. There are a number of exemptions or reductions (e.g., EU in origin or there’s an approved onshoring plan) but as of now, those tariffs are still scheduled to take effect this year.
Medicare Bridge Launches – CMS officially launched its Bridge program where certain eligible Medicare beneficiaries would get access to certain GLP-1 medications for $50 per month via the BRIDGE program. The program will run through December 31, 2027.
Congress Update – No updates on Congress. Due to intra-party friction within House Republicans, there has not been progress on legislation this week. Congress only has about 8 legislative days left before they go on a five-week summer recess. In other words, unless there is a significant pickup in activity it is very unlikely for any legislative activity until after the midterm elections.
