Health Issues

With President Trump now in office, his cabinet nominees continue to testify at congressional hearings as part of the nomination process. Robert F. Kennedy Jr. is the nominee to be the secretary of the Department of Health and Human Services (HHS), and his nomination hearings will spotlight a range of HHS activities but may not touch on the full scope of the department’s responsibilities. To better understand HHS’s impact on the health care system and the American people’s coverage, public health, safety, and well-being, what follows is an overview of the activities of the department.

Overview of HHS

The Department of Health, Education, and Welfare was established in 1953 and evolved into the Department of Health and Human Services in 1980 after the Department of Education was established as an independent entity. A relatively new department of the 15 current executive branch departments, HHS has a Fiscal Year (FY) 2024 budget funding estimated at $1.7 trillion, and the department’s budget is about a quarter of the total FY 2024 U.S. federal budget. It has the largest budget of any federal agency and is the largest grant-making agency.

Most federal executive branch health policy is implemented and managed within HHS, though the White House typically plays a major role in policymaking. The department has 13 operating divisions, most of which have a health focus in areas of coverage, research, regulation, resource delivery, and training. Others are focused on social assistance and support for families and communities in need. More than 80,000 HHS employees are located across the U.S. and the world and half of the workforce is outside the greater Washington, D.C. area.

The Public Health Service (PHS) predates HHS and now exists across ten of the 13 operating divisions within the department:

• The Administration for Strategic Preparedness and Response (ASPR)
• The Advanced Research Projects Agency for Health (ARPA-H)
• The Agency for Healthcare Research and Quality (AHRQ)
• The Agency for Toxic Substances and Disease Registry (ATSDR)
• The Centers for Disease Control and Prevention (CDC)
• The Food and Drug Administration (FDA)
• The Health Resources and Services Administration (HRSA)
• The Indian Health Service (IHS)
• The National Institutes of Health (NIH)
• The Substance Abuse and Mental Health Services Administration (SAMHSA)

Led by the Assistant Secretary of Health and the U.S. Surgeon General, the more than 6,000 United States Public Health Service Corps work across HHS and several other federal departments in everyday roles involving their health expertise, but they are also the country’s frontline workers for emergency response including public health emergencies.

Health Care Coverage and Affordability

The largest division of HHS is the Centers for Medicare and Medicaid Services (CMS), responsible for administering or overseeing health insurance coverage for Medicare, Medicaid, the Children’s Health Insurance Program, and the Affordable Care Act’s Health Insurance Marketplaces. Together, these programs provide health coverage access to 170 million Americans—more than half the population. However, the impact of HHS on the nation’s health insurance system goes well beyond the programs it administers, as it is heavily involved in the federal regulation of private health insurance, including employer-sponsored health insurance covering more than 150 million people, in conjunction with the Departments of Labor and the Treasury.

Beyond the core health insurance programs CMS administers, HHS also supports access to health care services in several other ways. Community health centers provide primary care and some additional services to low-income and uninsured populations and often serve special populations, e.g., people experiencing homelessness, migratory agricultural workers, and rural residents. HHS has a central role in setting standards and providing significant funding through various sources. HHS also provides medical and public health care to American Indians and Alaskan Natives through a network of providers run or contracted by the Indian Health Service. It has programs addressing the needs of specific populations, including the Ryan White HIV/AIDS program, refugee health, mental health and substance use treatment programs, and maternal and child health, to name a few.

Public Health and Disease Control

The public health role of HHS has been in the spotlight due to the COVID-19 pandemic, but its role during the crisis was based on pre-existing infrastructure and routine activities that adapt to the needs of the day. The department has a long-standing role in monitoring, preventing, and reducing the spread of infectious and non-communicable diseases. Its role encompasses a wide range of responsibilities, including research, screening, policy development and guidance, public education, treatment, and funding for state and local health departments.

Aside from COVID-19, HHS has been active in addressing infectious disease outbreaks of H5N1 avian flu, mpox, and hepatitis A in the past five years and works on long-term challenges like the HIV/AIDS epidemic. The role of HHS in vaccination dates back to the 1950s polio vaccine and it continues to have a substantial role in influencing the country’s vaccine policy.

Emergency Preparedness and Response

The routine health activities of HHS often merge with its role in addressing the health impacts of public emergencies and disasters. Events like the September 11, 2001, terrorist attacks, the opioid epidemic, the Flint, Michigan water crisis, natural disasters of hurricanes, tornadoes, and wildfires, and disease outbreaks have all triggered an HHS response in conjunction with other federal agencies.

HHS has provided emergency coordination and strategic planning to set up shelters for acute medical care and mental health support, sometimes utilizing the National Disaster Medical System, accessed stockpiles of critical equipment and medicine, led investigations and expanded on testing and monitoring activities, and assisted with survivor and community recovery including continuity of health care services.

Food and Drug Safety

Arguably, the broadest touch point for HHS’ impact on Americans’ daily lives is its role in food safety. The Food and Drug Administration (FDA) oversees most food safety aside from meat and poultry and shares responsibility for egg products with the Department of Agriculture. It also regulates the information about dietary supplements provided to consumers, though it does not have authority to approve them for safety and effectiveness. Among the activities related to food safety are conducting inspections of facilities, labeling requirements, issuing food recalls and alerts, and ensuring imported food meets U.S. standards. However, the FDA isn’t the only HHS agency that plays a significant role in food safety, as the Centers for Disease Control’s broad role of monitoring and responding to disease outbreaks also includes those related to consuming contaminated food.

HHS has a major role in regulating medical drugs and devices, mainly through the FDA. This includes pre-market testing for the safety and effectiveness of a product’s intended use, monitoring of approved products for any harm to consumers, and regulations for producing and labeling such products.

Scientific Research and Innovation

HHS, primarily through the National Institutes of Health, is the world’s largest public funder of health research. While the research often conducted can center on the basics of science and biomedicine, it has led to breakthroughs like the first successful polio vaccine, treatments for cancer and HIV/AIDs, the development of MRI technology, and the ability to personalize medicine because of the mapping of the human genome.

Supporting Families and Communities

The health of individuals can be impacted by several non-medical factors often categorized as social determinants of health. HHS has a range of social service programs that may not be typically considered health services, but usually factor in the stability of individual and family lives.

Financial assistance for low-income families with children has long been a federal program, and Temporary Assistance for Needy Families (TANF) is the primary cash assistance program for this population. TANF is administered by the HHS Administration of Children and Families (ACF) which also has programs related to child support enforcement, foster care, adoption, and child care. It also promotes early childhood development in low-income children under the age of five through Head Start.

One element of the department’s support services that has gained significant attention over the past decade, particularly as refugee resettlement submissions to the U.S. have sharply increased, is the array of services offered by the Office of Refugee Resettlement (ORR). Established 45 years ago, ORR aims to integrate individuals, including unaccompanied minors, and families into American society and provide a pathway to self-sufficiency. Services offered include financial assistance, housing, medical care, and employment services.

When a new Commander in Chief takes office – and their party also controls both chambers of Congress – how quickly can they make changes to health policy? Is it realistic to think that policy changes can happen on “Day One” of a new administration?

The short answer is that administrations can set changes in motion starting on Day One. But government processes and regulations – including federal rulemaking protocols, court actions, and the legislative process – slow the process of implementing changes and may delay them for months or even years.

If you’re among the more than 24 million people who enrolled in 2025 Marketplace coverage during open enrollment, ^{nothing will change about your coverage or premiums this year, since benefit and premium changes happen at the start of a plan year – January 1 for individual market coverage (barring unforeseen circumstances such as the mid-year carrier exit we saw in a few states in 2023).}

Members of the newly sworn-in Congress have circulated a “menu of potential spending reductions for members to consider,” which includes Medicaid per-capita caps and work requirements, repealing the ACA’s Prevention and Public Health Fund, funding cost-sharing reductions (as noted above, de-funding CSR has resulted in higher government spending on premium subsidies), and repealing “major Biden health care rules.”

But significant healthcare legislation would tend to have an effective date months or even years in the future, to give insurers, patients, and medical providers time to adapt. For example, consider the American Health Care Act (AHCA), a partial ACA repeal bill that passed the House in 2017 but failed in the Senate.

The AHCA would have ended the enhanced federal funding that states get for Medicaid expansion under the ACA, but not until 2020. ^{And it would also have replaced the ACA’s income-based Marketplace premium tax credits with age-based fixed dollar tax credits, but not until 2020.}

In summary, a new administration and Congress can make numerous changes to health policy. But while the process can begin immediately, the implementation of changes will generally be delayed by months or even years, depending on the policy.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.

With the incoming Trump administration and Republican-led Congress looking to ways to reduce federal spending, a new KFF Health Tracking Poll finds that the Medicare and Medicaid programs remain broadly popular, and more people favor more spending on those programs than less spending.

About eight in 10 Americans overall view Medicare (82%) and Medicaid (77%) favorably. This includes majorities across partisans, including most Republicans (75% view Medicare favorably and 63% view Medicaid favorably).

About half (46%) of the public say the federal government doesn’t spend enough on Medicaid, more than twice the share (19%) who say the government spends “too much.” The gap is even larger for Medicare, with half (51%) of the public saying the government doesn’t spend enough compared to 15% who say the government spends too much.

The Affordable Care Act (ACA), sometimes called Obamacare, also remains popular, with nearly two thirds (64%) of the public holding favorable views, though with more of a partisan divide. Most Democrats and independents hold favorable views of the ACA, while about three quarters of Republicans (72%) hold unfavorable views.

Large majorities also say they are “very” or “somewhat” worried that people covered by each of the three programs in the future won’t get the same benefits available today. This includes 81% who say so about Medicare, 72% who say so about Medicaid, and 70% who say so about the ACA marketplaces. Republicans are less worried than other partisans about Medicaid and the ACA.

Ahead of President Trump’s inauguration, the poll also assesses how the public prioritizes 11 potential actions on health that the new administration and Congress could take.

About six in 10 say that boosting price transparency rules (61%) and limiting chemicals in the food supply (58%) are both a “top priority.” This includes majorities of Republicans, independents and Democrats.

During his first administration, President Trump issued federal regulations establishing price transparency requirements for hospitals and insurers, and Robert F. Kennedy Jr., his pick to head the U.S. Department of Health and Human Services, has long advocated against chemicals in food.

In contrast, few among the public rank several other health policies associated with President Trump and his allies as top priorities.

For example, about one in seven say that reducing federal spending on Medicaid (13%) or limiting access to abortion (14%) is a top priority, while much larger shares say each of these “should not be done” (44% and 51%, respectively). Other low-ranking priorities include cutting funding to schools that require students to get vaccinated (15%), encouraging communities not to add fluoride to their water supply (23%), and repealing and replacing the ACA (27%).

Among other health priorities:

• Medicare drug price negotiations. More than half (55%) of the public say it is a top priority to expand the number of prescription drugs subject to Medicare drug price negotiations, including most Democrats (65%) and about half of Republicans (48%). Only 3% say this shouldn’t be done.
• Regulating insurance claim denials. Most people (55%) say more closely regulating insurers’ decisions to approve or deny claims for health services or prescription drugs should be a top priority. This includes most Democrats (61%) and independents (59%), along with nearly half (45%) of Republicans. Overall, just 5% oppose this.
• Enhanced ACA subsidies. About a third (32%) say that extending the expanded financial assistance that helps make ACA marketplace health insurance affordable should be a top priority. This includes half of Democrats (50%) but few Republicans (16%). Only 7% say this shouldn’t be done.

The incoming Trump administration has established a new “Department of Government Efficiency,” or DOGE, charged with developing plans to cut federal spending and reduce regulations.

Most Americans (73%) say that reducing fraud and waste in government health programs would lead to “major” or “minor” reductions in federal spending overall. This includes most Republicans (80%), independents (72%), and Democrats (68%).

At the same time, more than half (55%) of the public also say that reducing fraud and waste would lead to reductions in the benefits that people receive from government health programs. At least half of Republicans (60%), Democrats (55%), and independents (51%) hold this view.

Other findings include:

• Most of the public say the government is not spending enough on the prevention of chronic diseases (60%) or prevention of infectious diseases and preparing for future pandemics (54%). Much smaller shares say the government spends “too much” on each of these.
• More than half (57%) of the public say they expect health care to become less affordable for their families over the next few years. This includes most (54%) Trump voters and half (51%) of Republicans despite the campaign’s emphasis on addressing rising costs, including in health care.

Designed and analyzed by public opinion researchers at KFF. The survey was conducted Jan. 7-14, 2025, online and by telephone among a nationally representative sample of 1,310 U.S. adults in English and in Spanish. The margin of sampling error is plus or minus 3 percentage points for the full sample. For results based on other subgroups, the margin of sampling error may be higher.

Key Findings

• Both Medicare and Medicaid continue to be viewed favorably by large majorities of the public, including majorities of Republicans, Democrats, and independents. While lawmakers are discussing changes to Medicaid and Medicare including possible spending cuts, about half of the public think the federal government isn’t spending enough on each of these programs. Half (51%) say the federal government spends “not enough” on Medicare, and nearly half (46%) say the same about the Medicaid program. Across both programs, the share of the public who say the government isn’t spending enough is more than twice the share who say the government is spending “too much.”
• The latest KFF Health Tracking Poll also shows bipartisan consensus for some health policy priorities for the new presidential administration and Congress, especially around oversight and regulation. Majorities of the public – including about half or more across partisans – say boosting health care price transparency rules (61%), setting stricter limits on chemicals found in food supply (58%), and more closely regulating the process used by health insurance companies when they approve or deny services or prescription drugs (55%) should be a “top priority” for the incoming administration and Congress. Expanding the number of prescription drugs that the federal government negotiates the Medicare price on is also ranked as a “top priority” by a majority of the public including two-thirds of Democrats, 54% of independents, 48% of Republicans and three-fourths of people who are currently enrolled in Medicare.
• While the public is largely in-line with some of the administration’s potential health care priorities, other possible policy actions are seen as lower priorities, and in some cases, larger shares of the public say they “should not be done.” The public is divided on whether the administration should prioritize recommending against fluoride in local water supplies, with the same share saying it should be a “top priority” (23%) as say it “should not be done” (23%). In addition, less than one in eight adults (including fewer than a quarter of Republicans) say reducing federal funding to schools that require vaccinations (15%), limiting abortion access (14%), or reducing federal spending on Medicaid (13%) should be a “top priority,” while at least four in ten say each of these “should not be done.”
• Nearly two-thirds of adults (64%) hold a favorable view of the 2010 Affordable Care Act (ACA), but views on the future of the law are still largely partisan. Four in ten Republicans (40%) say repealing the legislation should be a top priority, while half of Democrats (50%) say extending the enhanced subsidies for people who buy their own coverage should be a top priority. Overall, most of the public is worried about the level of benefits for people who buy their own coverage through the ACA marketplaces including nearly nine in ten Democrats (86%), nearly eight in ten independents (78%), and nearly half of Republicans (47%).
• Overall, about three-fourths (73%) of the public thinks that reducing fraud and waste in government health programs could lead to reductions in overall federal spending – which is the goal of Trump’s newly formed government efficiency program, but many also think it will result in a reduction of benefits. More than half of the public say reducing fraud and waste could lead to reductions in the benefits people receive from the Medicaid and Medicare programs.

Public’s Health Care Priorities

As President-elect Trump takes office on January 20^th with Republican majorities in both chambers of Congress, the public is sending mixed messages on how they prioritize key components of the Trump administration’s health agenda. While Americans across partisanship largely embrace prioritizing increased regulation and oversight such as boosting price transparency rules and setting stricter limits on chemicals in the food supply, there are other aspects of the Republican agenda the public does not support – most notably, reducing federal funding to Medicaid.

When asked about a variety of health care proposals, including those put forth by Republican and Democratic lawmakers, about six in ten say boosting price transparency rules to ensure health care prices are available to patients (61%) should be a “top priority,” and a similar share say the same about setting stricter limits on chemicals found in the food supply (58%). A majority (55%) also say more closely regulating the process used by health insurance companies when they approve or deny services or prescription drugs is a top priority. Overall, while health care ranks lower than other policy areas such as immigration, foreign policy, and the economy; majorities of the public – including half or more across partisanship – say each of these should be a “top priority” for Congress and the new Trump administration.

When it comes to proposed changes to two key health care legislations: the Inflation Reduction Act’s provisions to allow the federal government to negotiate the Medicare price of prescription drugs as well as the 2010 Affordable Care Act (ACA), larger shares of the public support actions to expand or strengthen these laws rather than repealing them. More than half of the public (55%) say expanding the number of prescription drugs subject to Medicare price negotiation should be a top priority, twice the share who prioritize rolling back this provision (28%). On the ACA, about a third (32%) prioritize extending the enhanced subsidies for people who buy their own health coverage while a quarter of the public (27%) say repealing and replacing the ACA is a top priority.

Other health care issues, many of which may be the focus of the Trump administration, are seen as even lower priorities for the incoming administration with substantial shares of the public saying they “should not be done.” Less than a quarter of the public think changing recommendations for fluoride in local water supplies (23%) should be a “top priority,” which is identical to the share who say it should not be done. Less than one in eight say reducing federal funding to schools that require vaccinations (15%), limiting abortion access (14%), and reducing federal funding on Medicaid (13%) should be top priorities. At least four in ten of the public say each of these “should not be done” by Congress or the Trump administration.

Some Bipartisan Agreement on Health Care Priorities, but Views on ACA Are Highly Partisan

Robert F. Kennedy Jr., President Trump’s choice for head of the Department of Health and Human Services has long touted the need for a complete overhaul of U.S. food policy including cracking down on ultra-processed foods and food dyes. This focus on limiting chemicals in the public’s food supply is echoed in the public’s list of top health care priorities, with majorities across partisans saying it should be a top priority for the new Trump administration and Congress. More than half of Republicans (61%), independents (56%), and Democrats (55%) say setting stricter limits on chemicals in the food supply should be a “top priority” for Congress or the Trump administration.

Majorities of Democrats and independents also say oversight – both boosting price transparency rules to ensure health care prices are available to patients and more closely regulating health insurance companies’ approval or denial of care – should be a top priority for lawmakers. This increased oversight on hospital pricing and insurance companies is also seen as a priority among large shares Republicans (56% and 45%, respectively). Partisans also hold similar views on whether expanding the number of drugs subject to Medicare price negotiation should be a priority, with about half of Republicans (48%) saying this should be a “top priority,” as do nearly two-thirds of Democrats (65%).

There is also bipartisan agreement on what shouldn’t be a top health care priority for lawmakers. Few Democrats, independents, or Republicans think the incoming administration should prioritize changing recommendations for fluoride in local water supplies, reducing federal funding to schools that require vaccinations, limiting abortion access, or reducing federal funding for Medicaid.

On the other hand, views on the future of the 2010 Affordable Care Act continue to be partisan. Repealing the ACA continues to rank as a priority for Republicans (40% say it is a “top priority” in the most recent tracking poll), but it has dropped as priority among the total public (down 10 percentage points), and among Republicans specifically (down 23 percentage points), since the start of the first Trump administration. Democrats, on the other side of the political aisle, are more likely to prioritize extending the Biden-era enhanced ACA marketplace subsidies. Half of Democrats say this should be a “top priority” compared to just about one in six Republicans.

Many Americans Expect Their Health Costs To Continue Increasing

Throughout the 2024 presidential campaign, voters consistently said they were most interested in electing a candidate who could reduce their health care costs. President Trump largely capitalized on voters’ economic concerns and his own record to convince voters that he was the candidate most adept at taking on the high cost of health care. Yet, few Americans now expect health care costs for them and their family members to become more affordable over the next few years. In fact, more than half (57%) of the public – including 54% of Trump voters – say they expect the cost of health care to become “less affordable.” Majorities of Democrats (60%), independents (59%), as well as half of Republicans (51%) all expect health care costs for them and their family members to become less affordable in the coming years.

Public Largely Holds Favorable Views of Government Health Programs

With the Trump administration’s focus on tax cuts and border security, House Republicans have been coming up with plans to pay for these which may include reducing spending on government health programs such as Medicare, Medicaid, and the Affordable Care Act. Yet, changes to these programs may run up against public sentiment according to the latest KFF Tracking Poll.

KFF has asked the public about their attitudes about both Medicaid and Medicare for more than two decades, and these two programs continue to be overwhelmingly popular among the public. In the most recent poll, about eight in ten (82%) Americans hold favorable views of Medicare and more than three-fourths (77%) hold favorable views of Medicaid.

Medicare, the federal government health insurance program for adults 65 and older and some younger adults with disabilities, has maintained favorability among eight in ten adults for nearly a decade. In the January KFF Health Tracking Poll, the share who say they view the program favorably includes three-fourths of Republicans (75%) and more than eight in ten independents (84%), and Democrats (90%). This also includes 94% of the individuals who are currently enrolled in the Medicare program.

Similarly, Medicaid, the federal-state government health insurance program for certain low-income individuals and long-term care program, is also very popular with three-fourths of adults (77%) holding favorable views, including six in ten Republicans (63%), and at least eight in ten independents (81%) and Democrats (87%). Medicaid is also popular among those enrolled in the program with 84% saying they view the program favorably.

Notably, both programs are also viewed favorably by a majority of voters who say they voted for President Trump in the 2024 election.

While lawmakers are discussing changes to these programs including significant cuts to Medicaid, about half of the public actually think the federal government isn’t spending enough on either of these programs. About half of the public (51%) say the federal government spends “not enough” on Medicare, while one-third say the government spends “about the right amount” and about one in seven (15%) say the government spends “too much.” A majority of Democrats (60%) and pluralities of independents (49%) and Republicans (43%) say the federal government doesn’t spend enough on Medicare.

Nearly half (46%) say the federal government doesn’t spend enough on the Medicaid program, with another third saying it spends “about the right amount” and around one in five (19%) saying it spends “too much.” While most Democrats (62%) say the federal government doesn’t spend enough, Republicans are a bit more divided with about similar shares of Republicans saying the government spends “too much” (34%), “not enough” (32%), or “about the right amount” (33%) on Medicaid.

The Affordable Care Act, the Obama-administration health insurance program that was a frequent target of the first Trump administration, also continues to be popular – although to a somewhat lesser degree than Medicaid or Medicare. Nearly two-thirds of the public (64%) view the 2010 ACA favorably while less than four in ten (36%) say they hold an unfavorable view of the law. The share of the public who views the law unfavorably continues to be largely made up of Republicans, with about three-fourths (72%) saying they have an unfavorable view. ACA favorability increased substantially during the 2017 repeal efforts, and has maintained majority support throughout the past four years of the Biden administration.

With possible changes to all three government health programs, the public is worried that people covered by each of these programs in the future will not be able to get the same level of benefits that are available today. About eight in ten (81%) say they are either “very worried” or “somewhat worried” that Medicare enrollees will not get the same level of benefits in the future. This includes more than eight in ten (82%) individuals who are currently covered by the program as well as about nine in ten adults (88%) who will be eligible for the program in the coming years, those between the ages of 50 and 64.

In addition, seven in ten are worried about the level of benefits that will be available to people covered by Medicaid (72%) and people who buy their own coverage through the ACA marketplaces (70%). Both Medicaid and the ACA have repeatedly been discussed as possible focuses of the incoming Trump administration and Congressional Republicans.

Many Think Federal Government Isn’t Spending Enough on Public Health

As the Trump administration is balancing spending priorities, the public thinks the government isn’t spending enough on many facets of public health, including both the priorities of RFK Jr, Trump’s pick to lead HHS, and the priorities of Congressional Republicans.

Most of the public says the government is spending “not enough” on the prevention of chronic diseases (60%) or prevention of infectious diseases and preparing for future pandemics (54%). More than four in ten said the government was spending “not enough” (45%) on biomedical research, while 38% said it was spending “about the right amount.” Smaller shares say the federal government is spending “too much” on each of the key health priorities asked about.

Public Thinks Government Efficiency Could Decrease Federal Spending, but Worries Efforts May Reduce Benefits

One of the Trump administration’s promises has been to cut excessive government spending, including reducing fraud and waste across various sectors of the government. As the newly-formed “Department of Government Efficiency” or DOGE begins work, the public is concerned about the impact that government efficiency efforts will have on people who get their health insurance through Medicare or Medicaid.

Overall, the public thinks that reducing fraud and waste in government health programs could lead to reductions in overall federal spending – which is the goal of the government efficiency program, but many also think it will result in a reduction of benefits. Four in ten say reducing fraud and waste in government health programs could lead to “major reductions” in federal spending with an additional third (32%) saying it could lead to “minor reductions.” This includes majorities across partisans (80% of Republicans, 68% of Democrats, and 72% of independents) who say reducing fraud and wasted could reduce overall federal spending.

Yet, more than half (55%) of the public also say reducing fraud and waste could lead to reductions in the benefits people receive from the programs. More than a quarter (28%) of the public say that reducing fraud and waste will lead to “major reductions,” with an additional quarter who say it will lead to “minor reductions” in benefits. Once again, more than half across partisans (60% of Republicans, 55% of Democrats, and 51% of independents) say that reducing fraud and waste will lead to reduced benefits.

The public is largely divided on whether the incoming Trump administration’s proposed efforts to improve government efficiency will have a negative or positive impact on people who get health coverage through Medicare or Medicaid. Similar shares say the impact will be “mostly negative” (43%) and “mostly positive” (41%), while 15% say there won’t be any impact. Views of the impact are highly partisan, with large majorities of Democrats (78%) saying there will be a mostly negative impact, and most Republicans (80%) say there will be a mostly positive impact. Independents are more divided, but a larger share say there will be a mostly negative impact (43%).

What will happen to Marketplace health insurance subsidy availability – and subsidy size – when the subsidy enhancements instituted under the American Rescue Plan (ARP) and extended by the Inflation Reduction Act (IRA) sunset after 2025? It’s a question that health reform experts and media who cover health reform have been asking as political control of the White House and Congress is about to shift in 2025.

To get an idea of how sunsetting the subsidy enhancements would impact subsidy eligibility and subsidy size, we looked at states with the highest average pre-subsidy Marketplace premiums, which in turn have among the largest subsidies. We found some examples of how premium subsidy amounts would decrease or be eliminated entirely when the ARP’s subsidy enhancements expire at the end of 2025 – unless Congress acts to further extend the enhancements.

But the ARP subsidy enhancements are scheduled to sunset at the end of 2025 unless they’re extended again by Congress. ^{When the subsidy enhancements end, Marketplace subsidy amounts will decrease for everyone who receives them – and will disappear altogether for some enrollees. Let’s take a look at why this would happen, and how enrollees in some states would be affected:}

ACA subsidy rules prior to ARP

When the subsidy enhancements sunset at the end of 2025, the rules will revert – starting in 2026 – to the subsidy rules set by the ACA. Here’s how the ACA premium subsidy rules worked prior to the ARP:

• Subsidies were available if household income was at least 100% of the federal poverty level (FPL), or more than 138% FPL in states that had expanded Medicaid eligibility under the ACA. However,
• Subsidies were not available if household income was more than 400% FPL, regardless of the percentage of income a household would have to spend to buy coverage. This resulted in a subsidy cliff at 400% FPL.
• For subsidy-eligible enrollees, the subsidy amount was based on the enrollee having to pay a certain percentage of their household income for the benchmark plan (second-lowest-cost Silver plan). That percentage varied with household income, and ranged between roughly 2% and 9.5% of household income. (This is called the “applicable percentage” and the range was indexed each year by the IRS.)

Temporary subsidy enhancements under the ARP and IRA

Now let’s take a look at how the ARP temporarily changed these rules, and how the IRA extended those changes through 2025:

• The lower income threshold for premium subsidy eligibility did not change.
• But the 400% FPL cap on subsidy eligibility was temporarily eliminated, so we haven’t had a subsidy cliff for the last few years. Instead, people with household income over 400% FPL are eligible for subsidies if the cost of the benchmark plan is more than 8.5% of their household income. (This assumes they meet other subsidy eligibility requirements, including not having access to Medicaid, premium-free Medicare Part A, or an employer’s plan that’s considered affordable and provides minimum value.)
• For subsidy-eligible enrollees, the percentage of household income that the enrollee has to pay for the benchmark Silver plan has been reduced across the board. Instead of ranging from 2% to 9.5% of household income, it now ranges from 0% to 8.5% of household income. ^{And again, that now applies to households with income above 400% FPL.}

So the ARP subsidy enhancements, extended by the IRA, had two major effects:

• They allow Marketplace enrollees with household income above 400% FPL to potentially qualify for premium subsidies.
• They reduced the percentage of income that people pay for the benchmark plan at all income levels.

For example, under the original ACA rules, a person earning 150% FPL would pay 4% of their income for the benchmark plan, ^{and their subsidy would cover the rest.}

But under ARP rules, a person earning 150% FPL pays 0% of their income for the benchmark plan. Their subsidy covers the entire cost of the premium.

We won’t know the 2025 FPL numbers (used to determine subsidy eligibility in 2026) until early 2025. And we also don’t yet know what the exact applicable percentage range would be for the 2026 plan year when the ARP subsidy enhancements sunset, as the IRS will have to calculate and publish those numbers. But it will be roughly in the range of 2% to 9.5%, with subsidies ending altogether at above 400% FPL. (To clarify: from 2015 through 2020, the range had increased four times and decreased twice. As of 2020, it stood at 2.06% to 9.78%.)

This chart collection explores National Health Expenditure (NHE) data from the Centers for Medicare and Medicaid Services (CMS). These data offer insights into changes in health spending over time in the U.S., as well as the driving forces behind spending growth. The data specifically show how healthcare spending changed in 2023. A related interactive tool contains more of the latest NHE data.

The slideshow is part of the Peterson-Kaiser Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

Now updated with 2023 data, the National Health Spending Explorer on the Peterson-KFF Health System Tracker provides up-to-date information on U.S. health spending by federal and local governments, private companies, and individuals. It was developed by KFF using data from the National Health Expenditure Account and will be updated annually with each data release.

A short video tutorial provides instructions for the tool.

A partnership of KFF and the Peterson Center on Healthcare, the Peterson-KFF Health System Tracker is an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

This analysis for the KFF-Peterson Health System Tracker compares the Medicare’s first-ever negotiated drug prices under a new process created by the Inflation Reduction Act of 2022 to current U.S. list prices, prices negotiated by the Department of Veterans Affairs (VA), and prices in 11 countries of similar size and wealth.

It finds that Medicare’s negotiated prices for 10 high-expenditure prescription drugs are lower than what private Medicare drug plans had been paying, but still much higher than the prices available in other countries – 78% more on average than the country with the next highest price across 11 other wealthy nations.

The analysis is available on the Peterson-KFF Health System Tracker, an online information hub dedicated to monitoring and assessing the performance of the U.S. health system.

Hospitals account for 30% of total health care spending—$1.4 trillion in 2022—with expenditures projected to rise rapidly through 2032, contributing to higher costs for families, employers, Medicare, Medicaid, and other public payers. Policymakers have sought to reduce spending on hospital care as part of a broader effort to make health care more affordable and reduce the federal deficit. In recent years, for example, there has been bipartisan interest in site-neutral payment reforms, which would reduce Medicare program and beneficiary spending by aligning Medicare rates for certain outpatient services across care settings. The next Trump administration and Republicans in Congress may also seek to cut Medicaid spending, which could result in fewer dollars flowing to hospitals.

At the same time, there are ongoing questions about the effects of policies that reduce spending on hospital finances and access to care, with particular attention to the implications for rural and safety-net hospitals. For example, Senators Cassidy and Hassan recently released a framework for site-neutral payment reforms that would reinvest savings into rural and high-needs hospitals.

This analysis examines hospital margins for non-federal general short-term hospitals in the U.S from 2018 through 2023, the most recent year with virtually complete cost report data. The analysis is based on RAND Hospital Data, a cleaned version of Medicare cost reports. Total margins are defined as net income (revenues minus expenses) divided by revenues. This analysis focuses on operating margins (instead of total margins) to examine the extent to which hospitals profited or lost money on patient care and other operating activities, rather than on other sources, such as investments. Operating margins are approximated using the same calculation as for total margins after subtracting reported investment income and charitable contributions from revenues. Results for groups of hospitals reflect aggregate margins based on total relevant revenues and expenses, which is equivalent to the average margin after weighting hospitals by their revenue. A number of datasets provide information about hospital finances, though each has limitations, and cost reports are no exception. See Methods for additional information.

Key Takeaways

• Aggregate hospital margins rebounded in 2023 following a large decrease in 2022. This is true for operating margins, which decreased from 8.9% in 2021 to 2.7% in 2022 before increasing to 5.2% in 2023. It is also true for total margins, which decreased from 10.8% in 2021 to 2.3% in 2022 before increasing to 6.4% in 2023. However, both aggregate operating margins and total margins remained below 2019 pre-pandemic levels in 2023.
• Aggregate operating margins were positive in 2023 (5.2%), but about two in five hospitals (39%) had negative margins in that year. About one in five (22%) had operating margins less than -5%.
• Operating margins were higher than average among for-profit hospitals, hospitals with a high share of commercial discharges, and system-affiliated hospitals in 2023. For-profit hospitals had higher operating margins than nonprofit and government hospitals (14.0% versus 4.4% and 3.4%, respectively). Hospitals with a relatively high commercial share of total discharges had higher operating margins than hospitals with low shares (7.5% versus 3.3% among the top versus bottom quarter based on commercial share, respectively) (quartiles are weighted by revenues throughout). System-affiliated hospitals had higher operating margins than independent hospitals (5.8% versus 2.5%).
• Operating margins in 2023 were also higher than average among hospitals with relatively high commercial prices. Operating margins were relatively high among hospitals with commercial prices that were greater than 300% of Medicare rates, especially among hospitals with high commercial shares. In contrast, operating margins were relatively low among hospitals with high Medicaid shares (see below).
• Operating margins were lower than average among hospitals with high Medicaid shares, which was true in both rural and urban areas. Operating margins were lower among hospitals with a relatively high Medicaid share (2.3% among the top quarter of hospitals based on Medicaid shares versus 7.0% among the bottom quarter). Operating margins were relatively low for hospitals with high Medicaid shares in both rural and urban areas (1.7% and 2.3%, respectively).
• Operating margins were lower than average among rural hospitals in 2023. Operating margins were lower among hospitals in rural than urban areas (3.1% versus 5.4%, respectively) and were especially low among hospitals in rural areas that were not micropolitan areas (1.8%), i.e., that did not include and were not closely connected to any substantial population nucleus. However, operating margins were higher among for-profit than nonprofit rural hospitals (8.5% versus 3.5%, respectively). Operating margins were also lower among hospitals with Medicare rural designations, particularly among low-volume hospitals and Medicare dependent hospitals (1.7% and 1.8%, respectively).

Aggregate Hospital Margins Rebounded in 2023 Following a Large Decrease in 2022

Aggregate operating margins decreased from 8.9% in 2021 to 2.7% in 2022 before increasing to 5.2% in 2023 (Figure 1). Similarly, aggregate total margins decreased from 10.8% in 2021 to 2.3% in 2022 before increasing to 6.4% in 2023. While operating and total margins both increased in 2023, they remained below 2019 pre-pandemic levels (6.5% for operating margins and 7.6% for total margins). Operating margins were at a record high in 2021 for hospitals reimbursed under the inpatient prospective payment system (IPPS) but were lower in 2022 than they had been since 2008—i.e., during the Great Recession—according to related analyses from the Medicare Payment and Advisory Commission.

Decreases in operating margins in 2022 were likely due to the erosion of COVID funds, costs associated with labor shortages, and increased supply expenses due to high inflation rates, among other factors. Improvements in 2023 may have been due a number of factors, including stabilizing labor expenses, decreases in average length of stay, and increases in revenue.

Some of the major credit rating agencies have reported relatively stable operating margins among rated not-for-profit health systems from 2022 to 2023 and have projected gradual improvements over time. These trends may differ from the main analysis here because, among other factors, they look at not-for-profit systems and report median (rather than aggregate or weighted average) operating margins. Industry reports, based on a non-representative sample of hospitals, indicate that finances have improved through October 2024 relative to 2022.

Aggregate Operating Margins Were Positive in 2023, But About Two in Five Hospitals (39%) Had Negative Margins

While aggregate operating margins were positive in 2023 (5.2%), operating margins varied substantially across hospitals. On one end of the spectrum, about one in seven hospitals (15%) had relatively high operating margins of at least 15%, while about one in five (22%) had positive but relatively modest margins of less than 5%, including about one in ten (11%) with positive margins of less than 2.5% (not shown). Having positive but modest margins may signal financial challenges for hospitals.

At the same time, about two in five hospitals (39%) had negative margins, and about one in five (22%) had margins of less than -5%. While some of these hospitals may be able to weather financial challenges for a period of time if they have sufficient days of cash on hand, those without sufficient days of cash on hand could be especially challenged to maintain current services or remain open. Based on a prior KFF analysis, the majority of nonprofit hospitals and health systems analyzed with negative operating margins had at least “strong” levels of days cash on hand in 2022, though that analysis was based on data that underrepresent entities likely to be more financially vulnerable.

Operating Margins Were Higher Than Average Among For-Profit Hospitals, Hospitals With High Commercial Discharge Shares, and System-Affiliated Hospitals and Were Lower Than Average Among Hospitals With Low Market Shares in 2023

For-profit hospitals—which accounted for 17% of facilities—had much higher operating margins than nonprofit and government hospitals (14.0% versus 4.4% and 3.4%, respectively) (see Figure 3). For-profit hospitals may have a greater motivation to operate more efficiently and engage in other strategic behaviors to increase their margins, such as focusing on relatively profitable services lines, dropping unprofitable service lines (like obstetrics), or locating in wealthier areas that have more residents with commercial insurance and fewer with public or no insurance. As is the case throughout this analysis, differences in operating margins across groups of hospitals could reflect a variety of factors.

Operating margins were also higher than average among hospitals where commercially-insured patients accounted for a relatively large share of discharges. For example, operating margins were 7.5% versus 3.3% when comparing hospitals in the top versus bottom quarter based on commercial shares (quartiles are weighted by revenues throughout). One factor that likely plays a role in these results is that commercial payers generally reimburse hospital care at higher rates than Medicare and Medicaid, the two other major payers. For instance, a KFF review found that commercial prices were nearly double Medicare rates for hospital services when averaging findings across studies, and one recent analysis found that commercial prices were 254% of Medicare rates for hospital services on average in 2022.

Operating margins were also higher among hospitals affiliated with a health system than independent hospitals (5.8% versus 2.5%). Higher operating margins among system-affiliated hospitals could reflect the effects of consolidation, among other factors. Consolidation might lead to higher margins, for example, to the extent that merging providers are able to reduce operating costs or—as suggested by a large body of evidence—charge higher prices by having greater market power.

Finally, operating margins were lower among hospitals that accounted for a relatively low share of hospital discharges in their market. For example, operating margins were 2.0% versus 7.3% when comparing the bottom versus top quarter of hospitals based on their market share (or the market share of the health system that they are a member of, as applicable). Hospitals with large market shares may be able to negotiate higher rates and, if part of a larger system, benefit from economies of scale, among other factors that could drive higher margins.

Operating Margins in 2023 Were Higher Than Average Among Hospitals With High Prices, Especially Among Those With a Relatively High Commercial Shares

Operating margins were relatively high among hospitals with commercial prices that were greater than 300% of Medicare rates (8.9%) and were even higher (10.5%) among those with a relatively high commercial share of total discharges (i.e., with at least a 25% commercial share) (see Figure 4). In contrast, operating margins were relatively low among hospitals with commercial prices below 200% of Medicare rates (1.0%) and were even lower (0.8%) among those with low commercial patient shares. This aligns with an analysis from researchers at the Urban Institute and Harvard that found that high commercial prices were associated with higher operating margins and more days of cash on hand.

Policymakers have explored a number of options to rein in commercial prices. This analysis suggests that hospitals with the highest prices and largest commercial shares as a group are in a better position to absorb any restraints on prices, though the impact would vary across hospitals.

While Operating Margins Were Higher Than Average Among Hospitals With High Commercial Shares in 2023, They Were Lower Than Average Among Hospitals With High Medicaid Shares, Which Was True in Both Urban and Rural Areas

Hospitals with high commercial shares had relatively high operating margins (e.g., 7.5% versus 3.3% when comparing the top versus bottom quarter of hospitals weighted by revenues based on commercial share) (see Figure 3 above) while hospitals with high Medicaid shares had relatively low operating margins (e.g., 2.3% versus 7.0% when comparing the top versus bottom quarter of hospitals weighted by revenues based on Medicaid share) (see Figure 5).

Operating margins in 2023 were relatively low among hospitals with high Medicaid shares in both rural and urban areas (1.7% and 2.3%, respectively) (see Figure 5). In comparison, the operating margin among all hospitals was 5.2% in 2023. While operating margins were lower among hospitals in rural than urban areas overall (3.1% versus 5.4%, respectively) (see Figure 7 below), hospitals with high Medicaid shares in urban areas stand out as another example of hospitals that were struggling more than others.

Some policymakers are especially attentive to the financial stability of safety-net hospitals given their role in providing access to patients with limited resources and other sources of vulnerability. The share of patients covered by Medicaid may signal the extent to which a given hospital cares for a disproportionate share of low-income patients (see Methods for more detail).

Operating Margins Were Also Lower Than Average Among Hospitals With High Medicare Shares in 2023

Operating margins were 4.3% in 2023 among hospitals in the top quarter based on Medicare share of discharges compared to 5.8% among hospitals in the bottom quarter (see Figure 6). Part of this difference may reflect the fact that hospitals with high Medicare shares were more likely to be in rural areas (54% of hospitals in the top quarter of Medicare shares were in rural areas versus 23% of the hospitals in the bottom quarter). As described below, rural hospitals had lower than average operating margins in 2023.

While operating margins among hospitals in the top quarter of Medicare shares were lower than among hospitals overall, they were higher relative to hospitals in the top quarter of Medicaid shares (4.3% versus 2.3%, respectively).

Operating Margins Were Lower Than Average Among Rural Hospitals in 2023

Operating margins were lower among hospitals in rural versus urban (nonmetropolitan versus metropolitan) areas (3.1% versus 5.4%, respectively) and were especially low among hospitals in rural areas that were not micropolitan areas (1.8%) (Figure 7), i.e., that did not include and were not closely connected to any substantial population nucleus (see Methods for more about urban and rural definitions). While 48 states in this analysis had at least one rural hospital, rural hospitals were distributed unevenly across the country. For example, a quarter of rural hospitals were located in Iowa, Kansas, Minnesota, Nebraska, or Texas. Rural hospitals often face unique financial challenges, such as low patient volume, which may lead to higher costs on average and limit the ability to offer specialized services.

Operating margins varied across rural hospitals in 2023, as was the case when looking at hospitals overall. For example, more than four in ten (44%) rural hospitals had negative operating margins while more than half (56%) had positive operating margins, including one in ten (10%) with operating margins of at least 15%. Operating margins were higher among rural for-profit than rural non-profit hospitals (8.5% versus 3.5%) and lower (0.3%) among rural government hospitals. Operating margins were also higher among system-affiliated versus independent rural hospitals (4.8% versus 0.6%, respectively).

Operating margins were lower among hospitals with Medicare rural designations than other hospitals. Low-volume hospitals (hospitals with few discharges that are a minimum distance from other facilities) and Medicare dependent hospitals (small rural hospitals with high Medicare inpatient shares) had the lowest operating margins (1.7% and 1.8%, respectively) (Figure 7). Operating margins were also lower on average among critical access hospitals (rural hospitals with at most 25 beds that with some exceptions are a minimum distance from other facilities) and sole community hospitals (hospitals that are the only source of short-term, acute inpatient care in a region) relative to hospitals without a Medicare rural designation (4.1% and 4.2%, respectively, versus 5.7%). About half of low-volume, Medicare dependent and sole community hospitals had negative operating margins in 2023 (52%, 52%, and 49%, respectively), as did 40% of critical access hospitals. A smaller share (35%) of hospitals without a Medicare rural designation had negative operating margins.

Senators Cassidy and Hassan recently released a framework for site-neutral payment reforms that some of the savings be reinvested into sole community, low-volume, and Medicare dependent hospitals. As noted above, each of these groups had lower operating margins than did hospitals without a rural designation. The framework does not mention new funds for critical access hospitals, which would likely be exempt from site-neutral payment reforms.

Policymakers have had ongoing concerns about the financial health of rural hospitals and the implications for access to care and the local economy. At the same time, it may be difficult to sustain some rural hospitals—such as those in areas with shrinking populations—and some have argued that care in at least some scenarios should be moved towards other settings, including telehealth, outpatient facilities, and larger regional hospitals.

Operating Margins Were Higher Than Average Among Hospitals With a Large Number of Beds and Among Minor Teaching Hospitals in 2023

Hospitals with greater than 500 beds had higher operating margins (6.3%) than those with fewer beds (e.g., 3.9% among hospitals with 51 to 100 beds) (see Figure 8). Minor teaching hospitals had higher margins (6.2%) than major teaching (4.3%) and non-teaching (5.1%) hospitals. Minor teaching hospitals are defined as facilities with interns or residents but at most one full-time equivalent intern or resident for every four beds, and major teaching hospitals are defined as facilities with more.

Operating Margins Varied Across States in 2023

Aggregate operating margins were at least 10% in five states (Alaska, Florida, Texas, Utah, and Virginia) but negative in four states (Michigan, New Mexico, Washington, and Wyoming) (see Figure 9). Differences likely reflect a variety of unique state circumstances, such as demographics, hospital ownership and cost structure, commercial reimbursement rates, and state and local health and tax policy. For instance, operating margins may have been high in Texas in part because the state has a relatively large number of for-profit hospitals (which have higher operating margins on average), among other factors. The same is true of Florida, which may have also had high operating margins in part due to the relatively high commercial prices in the state. As an example of a state on the other end of the spectrum, margins may have been relatively low in Wyoming in part because the vast majority of hospitals are in rural areas (92% compared to 40% of all hospitals), among other factors. It is also possible that a small number of hospitals with large revenue could have a large impact on aggregate operating margins, especially in states with relatively few hospitals, like Alaska.

The Biden administration has proposed to allow Medicare and require Medicaid to cover drugs used to treat obesity by reinterpreting the statutory language that currently prohibits coverage of drugs used for weight loss under Medicare and permits but does not require states to cover these drugs for weight loss under Medicaid. This reinterpretation reflects an evolution in the understanding of obesity as a disease and weight loss as conferring real health benefits in people with obesity rather than being merely for cosmetic purposes. It also comes amidst high and growing demand for and use of a relatively new class of highly effective, but also very expensive, drugs being used to treat obesity, known as GLP-1s.

Under current law, people on Medicare can get anti-obesity drugs covered by Part D, Medicare’s outpatient drug benefit, only if they are used for a medically accepted FDA-approved indication other than obesity, like diabetes or cardiovascular disease risk reduction. State Medicaid programs also have to cover these drugs for indications such as diabetes or cardiovascular disease risk reduction, but only 13 states currently cover these drugs for obesity treatment as well. These limitations on coverage in Medicare and Medicaid mean that millions of people who have obesity and might benefit from these drugs may be unable to access them due to their high prices. But even with these coverage limits in place, gross spending on these drugs for approved uses in Medicare and Medicaid has skyrocketed in recent years, totaling $4 billion in Medicaid in 2023 and close to $6 billion in Medicare in 2022 for selected GLP-1s.

The new Biden administration proposal would authorize Medicare and Medicaid coverage of anti-obesity medications for people with obesity but not people who are overweight. While coverage would be available for Medicare and Medicaid enrollees with obesity, Medicare Part D drug plans and state Medicaid programs could still apply utilization management tools such as prior authorization, which could limit access. According to the Centers for Medicare & Medicaid Services, the proposal would increase Medicare spending by $25 billion and Medicaid spending by $15 billion over 10 years (net of rebates) and would apply to around 3.4 million people with Medicare and 4 million people with Medicaid. Because Medicaid is jointly financed by the states and the federal government, CMS estimates the federal government would pay $11 billion and states would pay nearly $4 billion.

Rising prescription drug costs are an ongoing concern for states, and state Medicaid programs reported the high cost of obesity drugs as key reason for not expanding coverage prior this proposal. The potential cost to Medicare is lower than some other estimates because it assumes many people with obesity can already get Medicare coverage of these drugs for other medically accepted indications, and CMS’s proposal would not apply to people who are overweight. Nonetheless, the combination of high demand, new uses, and high prices for these treatments is likely to place tremendous pressure on Medicare spending, Part D plan costs, and premiums for Part D coverage over time.

KFF analysis has found most large employer firms currently do not cover GLP-1 drugs for weight loss and coverage in ACA Marketplace plans remains limited, but if finalized, the proposed change to Medicare and Medicaid coverage could put pressure on other payers to expand access. If it becomes official coverage policy, this change would also lift the burden off lawmakers in Congress who have repeatedly introduced legislation to authorize Medicare coverage of anti-obesity drugs but who may have been stymied by the potential cost of doing so. But as the Biden administration prepares to hand the reins over to the incoming Trump administration, a key question is whether the rule will be finalized as proposed under new leadership at CMS, changed in some way, or pulled back altogether.