Week in Washington

Shutdown Ends

On Wednesday, the House passed a bill to the end the longest ever government shutdown. The agreement provides funding for some agencies through the end of the fiscal year and others (such as HHS) through January 30^th, 2026. The agreement extends Medicare telehealth flexibilities until January 30^th, 2026. It also waved scheduled PAYGO sequestration cuts. The agreement also has a scheduled Senate vote on extending ACA enhanced subsidies by mid-December, but most observers do not expect a passage of the bill. President Trump is expected to sign the bill this week. 

Next Legislative Things to Watch

• End of Year Health Package – One thing that Congress will work on before the end of the year is an end of year health package. Potentially extending Medicare telehealth flexibilities, ePTCs, and PBM reform are all a possible inclusion in the end of year package.
• ACA Subsidies/Changes – President Trump raised the idea of converting ACA premium subsidies into a cash payment or into an HSA. This mirrors some prior Republican ideas that align with repealing/replacing the ACA. It’s unclear how these may impact legislative or regulatory decisions.

Other Things in the News

• KFF released its annual survey of Medicaid officials. Overall, they found that:
  • About two-thirds of states/DC face at least a 50-50 chance of a budget shortfall.
  • Enrollment fell 7.6% in FY2025 and is expected to be flat in FY 2026
  • Total Medicaid spending grew 8.6% in FY 2025 and is expected to grow by 7.9% in FY2026. It should be noted that state Medicaid spending is up 12.2% in FY2025 and expected to be up 8.5% in FY2026. The major drivers of spending increases where long-term care, pharmacy benefits
• Willis Towers Watson projects global medical costs will increase by 10.3% in 2026 (similar levels to 2025). North America is projected to have similar total medical costs increases in 2026 that it did in 2025.