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Updated: May 20, 2025
On May 18, the House Budget Committee advanced a budget reconciliation bill that includes significant changes to the Medicaid program and the Affordable Care Act, as well as additional provisions related to Medicare and Health Savings Accounts. The following includes a summary of the health provisions included in the House Rules Committee Print released on May 19 compared to current law.
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In the United States, the percentage of adults seeking mental health treatment or counseling has been steadily rising.
In this article, we’ll take a look at some of the top mental health insurance considerations that consumers should understand.
Let’s start with an obvious and frequently asked question:
Whether or not your health plan is required to cover mental health care will depend on the type of coverage you have. Here are some basic rules to keep in mind:
Individual and small-group plans must cover mental health and substance use disorders (SUD) treatment, but with specific coverage requirements that vary by state. These rules do not apply to plans that are grandfathered or grandmothered under the ACA.
Total out-of-pocket costs and how those costs are distributed vary greatly from one plan to another. For example, some plans might cover various services with copays from the outset, while other plans might require you to meet your deductible (which could be thousands of dollars) before the plan starts to pay for any care. And as is the case for any type of care, total out-of-pocket exposure varies by plan.
Mental health parity rules apply to these types of plans.
Fully-insured large-group plans are plans an employer purchases from an insurance company either directly, or through a sales agency. In most states, “large-group” means the employer has 51 or more employees, but there are some states where the threshold is 101 employees. (Under the ACA, this threshold was intended to be 101 employees, but the PACE Act reduced it to 51. States had the option to use the 101 threshold instead, and a few do so.)
This type of plan must cover mental health and SUD treatment only if state regulations require it. These requirements vary from one state to another.
For plans that provide coverage for mental health and SUD treatment, out-of-pocket costs vary by plan, but there cannot be any dollar limits on how much the plan will pay for these services.
Mental health parity rules apply to these plans.
Self-insured plans, under which an employer uses its own money to pay employees’ claims, rather than purchasing coverage from an insurer, are not required by federal regulations to cover mental health care or SUD care, and states cannot set coverage mandates for self-insured plans. If a self-insured plan covers mental health or SUD treatment, the plan cannot limit how much the plan will pay for those services.
Mental health parity rules apply if the employer sponsoring the self-insured plan has more than 50 employees.
Medicare covers a wide range of mental health and SUD care, including both inpatient and outpatient care.
Medicare Advantage plans must cover at least the same services that Original Medicare covers, although out-of-pocket costs can be different. Medicare Advantage plans can also limit coverage to a specific network of providers, and can require prior authorization.
Federal parity rules do not apply to Medicare, but a separate law passed in 2008 reduced Medicare cost-sharing for outpatient mental health care to align it with cost-sharing for other kinds of outpatient medical care.
Medicaid is the largest payer for mental health services in the United States, and various types of behavioral health care are encompassed under Medicaid’s mandatory benefits that all states must provide.
As with other aspects of Medicaid coverage, specific benefits for mental health and SUD treatment vary from one state to another. But many states have federal Medicaid waivers that include various services to assist people with SUDs Medicaid waivers are an option provided for in federal law that gives states flexibility to test innovative approaches to providing care.
Mental health parity rules apply to Medicaid managed care plans, Medicaid alternative benefit plans (including the ACA’s expansion of Medicaid), and the Children’s Health Insurance Program (CHIP).
Short-term health insurance and coverage that is considered an “excepted benefit” do not have to cover mental health and SUD treatment.
Short-term health insurance policies are not considered individual health insurance, are not regulated by the ACA, and are limited to total durations of no more than four months, including renewals. “Excepted benefits” include coverage such as workers’ compensation, fixed-indemnity plans, accident insurance, and critical illness plans.
Mental health parity rules do not apply to short-term plans or excepted benefits coverage.
While many plans – including Marketplace plans and most employer-sponsored plans – cover mental health and SUD treatment, short-term plans and excepted benefit plans typically do not provide these benefits.
The Affordable Care Act significantly expanded coverage of mental health treatment in several key ways.
Prior to the ACA, mental health conditions and substance use disorders (SUD) were an obstacle to obtaining health insurance and often resulted in declined applications in the individual health insurance market. But that is no longer the case, because of the ACA. The ACA banned the use of medical underwriting in the individual market (where it was used extensively before 2014), and eliminated pre-existing condition waiting periods for employer-sponsored health insurance.
The ACA also allowed states to expand Medicaid to cover adults with income up to 138% of the federal poverty level, which 40 states and DC have done. As of June 2024, nearly 21 million people are enrolled in Medicaid due to this expansion, resulting in better access to mental health and SUD treatment.
The ACA also requires all non-grandfathered major medical health plans to cover various preventive care at no cost to the patient. Among the benefits included are depression screening and alcohol misuse screening for adults and adolescents, as well as autism screening and behavioral assessments for children.
The ACA requires individual and small-group health plans (with effective dates of Jan. 2014 or later) to cover essential health benefits (EHBs), with no annual or lifetime dollar limits. One of the categories that must be covered on all of these plans is “mental health and substance use disorder services, including behavioral health treatment.”
For perspective on the significance of this requirement, more than a third of non-group health plans didn’t provide any mental health benefits in 2013, and almost half did not cover SUD treatment. (Pre-ACA coverage was better among employer-sponsored plans.)
Within the ACA’s basic EHB framework, it’s up to each state to determine exactly what services must be covered. Each state has selected an EHB benchmark plan that details minimum coverage requirements for each EHB category. So the specific mental health and SUD care that must be covered will vary from one state to another, depending on the state’s EHB benchmark plan’s coverage.
Prescription drugs are also an EHB under the ACA. So all individual and small-group plans with effective dates in 2014 or later are required to cover prescriptions, including medications to treat behavioral health problems. But health plans set their own formularies – covered drug lists – within certain guidelines. (Those guidelines include a requirement that the plan must cover at least as many drugs in each category and class of drugs as the state’s EHB benchmark plan – not necessarily the same drugs that the benchmark plan covers – or one drug in each category and class, whichever is greater.)
Large-group and self-insured plans are not required to cover the ACA’s EHBs. But if they do, they must cover them without any annual or lifetime dollar limits on how much the plan will pay for an enrollee’s care.
No, mental health parity rules do not require health plans to cover mental health care. Learn more about mental health parity requirements.
As a result of the ACA, some health plans are required to provide coverage for mental health and SUD treatment. And states can impose coverage mandates on plans that aren’t self-insured.
Self-insured plans are subject to federal rules, but they are not subject to state insurance rules. There is no federal requirement that self-insured plans cover mental health or SUD treatment. For plans that aren’t required to provide those benefits, mental health parity rules only apply if the plan opts to provide mental health and/or SUD benefits. And for self-insured plans, mental health parity rules only apply if the employer has more than 50 employees
As noted above, coverage requirements vary depending on the type of plan a person has. And as is the case for coverage of any type of healthcare, out-of-pocket costs and benefit specifics will vary from one health plan to another.
But most major medical health plans in the U.S. do cover mental health therapy and mental health medications. Many plans will also cover telehealth therapy, although this varies by plan.
A recent AHIP survey found that the majority of insured Americans who sought mental health care were able to obtain it without difficulty, and 90% were satisfied with the care they received. In addition, 60% reported that their mental health care was fully covered by insurance, and 33% reported that their mental health care was partially covered by insurance, while only 3% said that it wasn’t covered. (Note that “covered” doesn’t mean the health plan pays the full bill, since enrollees have cost-sharing for covered services, in the form of deductibles, copays, and coinsurance.)
But on the other hand, the American Psychological Association (APA) points to an analysis done by KFF and CNN, which found that a third of survey respondents were not able to access the mental health care they needed. Cost was the primary obstacle, as well as stigma and a shortage of mental health providers.
Compounding the shortage of providers is the fact that many mental health professionals do not accept insurance, and psychiatrists are much more likely than other medical specialists to not accept new patients with either private health insurance or Medicare.
So, if you already have a relationship with a mental health provider, you may have to switch to a different provider to utilize your health plan’s benefits, as your preferred provider might not accept your insurance. You can check with your plan to see if any out-of-network benefits are available. If so, you may be able to seek reimbursement from your plan for some of the cost of seeing a mental health professional who doesn’t accept insurance.
Although most major medical health plans will cover substance use disorder (SUD) treatment, the specifics vary by plan. As noted above, the only plans that are required to cover SUD treatment are individual and small-group plans (under the ACA), or fully-insured large-group plans in states that require the coverage. Parity rules apply to far more plans, but again, that’s only applicable if the plan includes coverage for SUD treatment.
Treatment needs vary depending on the patient, but can range from outpatient therapy to partial hospitalization to inpatient rehabilitation that can last anywhere from just a couple of weeks to more than three months.
Despite state and federal efforts to improve access to affordable SUD treatment, barriers remain. For example, some people may find that their policy doesn’t cover the type of inpatient care they need, or doesn’t cover medication-assisted addiction recovery.
And for Medicaid, which plays a significant role in covering SUD treatment in the U.S., there is significant state-to-state variation in the coverage provided and the care that enrollees receive.
As with other behavioral health care, it can sometimes be challenging for patients to find SUD practitioners who are in-network with their health plan.
If you need SUD treatment, you or a caregiver should check with your health plan to see what’s covered, whether prior authorization is needed, and what SUD treatment programs are in-network with your plan.
Eating disorders are among the most serious behavioral health issues, and a multifaceted treatment approach is often necessary.
But while many health plans cover at least some aspects of eating disorder treatment, patients still face challenges in obtaining the care they need. For example, it can be difficult for a patient and their care team to prove to the patient’s health plan that a certain level of care – such as a residential program or inpatient treatment – is medically necessary, and health plans generally deny coverage if the care isn’t deemed medically necessary.
And some health plans will deny coverage based on metrics such as how much weight the patient has lost, without considering the full picture of the patient’s medical needs.
There are also gaps in the type of care covered by various plans, and some patients have difficulty finding in-network providers who can treat their eating disorder (as is the case for other types of behavioral health care).
Most health insurance policies will not cover marriage counseling, as it’s not considered medically necessary treatment.
If one or both partners are diagnosed with a mental illness, such as depression or anxiety, health insurance will generally cover therapy to treat that condition. Depending on the circumstances, that might involve therapy where both partners are present, and it might include discussions about the marriage.
But if the purpose of the therapy is marriage counseling without a medical diagnosis, it’s unlikely that health insurance will cover the cost.
If your employer offers an employee assistance program, it may include access to a limited number of basic couples counseling sessions.
To find out whether your health insurance covers mental health treatment, you’ll need to confirm coverage details with your plan.
To see exactly what’s covered, you can read the summary plan description (SPD) that came with your policy, or the policy documents you received if your policy doesn’t have an SPD. If you have questions about your benefits, you can contact the plan’s customer service department.
Here are examples of questions you may want to ask your plan administrator before you seek non-emergency mental or SUD health care:
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written hundreds of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.
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Updated: May 13, 2025
On May 11, the House Energy and Commerce Committee released draft legislative language of a bill to meet spending targets aimed at funding President Trump’s domestic priorities that includes significant changes to the Medicaid program. The Congressional Budget Office (CBO) estimates that the bill would decrease the federal deficit by more than the $880 billion over 10 years that was called for by the budget resolution passed by Congress in April. CBO preliminary estimates show that the health provisions (including Medicaid) would reduce the deficit by $715 billion over ten years and increase the number of people without health insurance by at least 8.6 million by 2034.
The following includes a summary of the Medicaid provisions included in the draft legislation compared to current law. The Energy and Commerce Committee is expected to consider this legislation in a committee mark-up on May 13, so provisions could change during that process.
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There’s been a lot of buzz in the media in early 2025 about the likelihood of Medicaid cuts to significantly reduce federal spending on the program. With almost 72 million people covered by Medicaid, there is widespread concern about what sort of cuts are likely.
This article examines what could be cut – and who the cuts would likely affect.
Medicaid cuts are making the news due to a Congressional budget proposal that calls for reducing federal spending by hundreds of billions of dollars to pay for various tax cuts. Both chambers of Congress have agreed on a framework for the budget. They ultimately have to agree on details of a budget change, and we don’t yet know how that will unfold.
But the budget framework passed by both the House and Senate directs the Committee on Energy and Commerce, which is the House committee with jurisdiction over Medicaid, Medicare, and the Children’s Health Insurance Program, to reduce the federal deficit by $880 billion over 10 years. According to the Congressional Budget Office, cuts of that magnitude would have to primarily target Medicaid.
So what Medicaid cuts could Congress make, and how would they affect enrollees? While we don’t yet know what will be in the final budget bill, we do have information from the House Ways & Means (W&M) and Budget Committees, outlining various cuts, along with potential savings.
Here’s a look at five likely focus areas for Medicaid cuts:
Potential funding cut: About $100 billion over a decade
Medicaid work requirements are not a new idea. Several states received federal approval for work requirements under the first Trump administration, although most were never implemented. Georgia, which has had a work requirement in place since mid-2023 for certain adults, is currently the only state that requires some enrollees to be working to qualify for Medicaid.
If a federal Medicaid work requirement were implemented, the impact would depend on several factors, including:
The Robert Wood Johnson Foundation estimates applying a federal work requirement just to the Medicaid expansion population could result in 4.6 to 5.2 million people losing Medicaid eligibility.
Potential funding cut: $387 billion over a decade
May impact: 10 states and Washington, DC
Medicaid is jointly funded by the federal and state governments. In states with lower per-capita incomes, the federal government pays a larger share of total Medicaid costs. But there’s a minimum 50% matching rate, so the federal government always pays at least 50% of total Medicaid costs.
The W&M Committee projects that federal Medicaid funding could be reduced by $387 billion over the coming decade if the 50% minimum was eliminated, allowing higher-per capita income states to receive less federal funding for Medicaid. (If the 50% floor is removed and some states end up with lower federal matching rates as a result, the federal government would spend less to fund those states’ Medicaid programs, resulting in savings for the federal government.)
This change would impact 10 states: California, Colorado, Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Washington, and Wyoming. Their total Medicaid enrollment accounts for about 26.4 million of the 71.8 million people enrolled in Medicaid nationwide.
If the federal matching rate were reduced under this proposal, states would have to determine how to account for the funding shortfall, potentially leading to benefit cuts or changes in eligibility rules.
In Washington, DC, federal Medicaid funding is statutorily set at 70%. The W&M list and the Budget Committee call for this to be changed so that the funding percentage would be set the same way it is in the rest of the country, which would reduce it to 50%. If the 50% minimum were to be eliminated as well, the District of Columbia could potentially be subject to additional federal Medicaid funding cuts.
Potential funding cut: $561 billion over a decade
Population potentially affected: 20 million people who have gained coverage due to Medicaid expansion
Under the Affordable Care Act (ACA), the federal government pays 90% of the cost of covering the Medicaid expansion population. This is much larger than the federal government’s share of the cost of covering the rest of the Medicaid population, which ranges from 50% to nearly 77%, depending on the state.
The House Committees want to reduce the federal funding percentage for the Medicaid expansion population so that it matches the funding percentage that applies to the rest of each state’s Medicaid population. This change could save the federal government up to $561 billion over the coming decade.
In nine states, this would result in an automatic termination of Medicaid expansion, and in three others, it would result in an automatic review process that would likely lead to coverage losses. The rest of the states would have to consider whether Medicaid expansion would continue to be financially feasible with the reduced federal funding.
Depending on how the rest of the states would handle the reduction in funding, up to 20 million people could lose Medicaid due to a reduction in federal funding for Medicaid expansion.
Potential funding cut: Up to $900 billion over a decade
Population potentially affected: 72 million Medicaid enrollees
The W&M Committee estimates that a per-capita cap on federal Medicaid funding could save the federal government up to $900 billion over the next ten years.
Under current rules, federal Medicaid funding is based on the federal government matching the amount that states spend at least dollar-for-dollar, and in some states, up to $3 in federal funding is provided for every dollar the state spends. This is an open-ended match, with no limit on how much federal funding a state can receive.
If Congress switched federal Medicaid funding to a per-capita (per-enrollee) cap, the federal government would give a certain amount of money to each state based on a preset formula, independent of states’ actual costs.
A recent Urban Institute analysis found that states would see significant reductions in federal Medicaid funding under per-capita caps and “would have to consider a range of policy options, including increasing taxes, shifting state spending away from education and other priorities, cutting Medicaid provider payment rates, and reducing benefits for Medicaid beneficiaries.” The analysis also clarifies that “if states cannot find additional revenues or sufficient savings… inevitably, there would be enrollment cuts.”
If a per-capita cap were to be implemented nationwide, it could potentially affect eligibility and benefits for all 72 million Medicaid enrollees. The specifics would vary from one state to another, depending on the approach each state takes.
Projected funding cut: $285 billion over a decade
All of the proposals discussed above would require Congressional action. But the W&M Committee also noted that federal Medicaid funding could be reduced by up to $285 billion over the coming decade by rescinding some Biden administration rules. This could be done by federal agencies and would not require Congressional action.
The first Biden administration rule is one that expands access to Medicaid Home and Community Based Services (HCBS).
The other Biden administration rule is a two-part rule that makes it easier for people who are eligible for Medicaid to enroll in the program and renew their coverage.
According to the Economic Policy Institute, extending tax cuts would primarily benefit those with the highest incomes, while Medicaid cuts would result in people with the lowest incomes losing benefits and coverage. And the impact of Medicaid cuts would apply disproportionately to people of color and children.
Amid pushback on the idea of Medicaid cuts, Republican lawmakers have noted that their intent is to improve efficiency and administration in the Medicaid program, but not to cut benefits or eligibility. However, the scale of federal funding cuts called for in the Congressional budget resolution would require changes like the ones detailed above, which experts agree would result in reduced benefits, fewer enrollees, or both.
Based on historical experience, when people are disenrolled from Medicaid, the majority end up being uninsured for at least some time after losing Medicaid.
So if any Medicaid cuts are implemented, it will be important to devise a strategy that minimizes the number of people who become uninsured.
The views and opinions expressed in this blog post are those of the author and do not necessarily reflect those of HealthInsurance.org, LLC or its affiliates.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written hundreds of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.
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As the Trump administration and Congress pursue broad cuts to federal health agencies and budgets, most of the public, including some Republicans, oppose deep budget and staffing cuts to federal health programs and agencies, a new KFF Health Tracking Poll finds.
Across a range of questions, large majorities of Democrats and independents oppose the Trump administration’s major cuts to federal health agencies and programs, while Republicans are more supportive. Those who identify with President Trump’s Make America Great Again movement are even more supportive of cuts to health agency’s staff and budget but still split on cuts to funding for Medicaid and a few other programs.
For example, most of the public (61%), including large shares of Democrats (89%) and independents (67%), oppose major health spending and staff cuts at federal health agencies. In contrast, MAGA supporters overwhelmingly support such cuts (78%), while Republicans and Republican-leaning independents who don’t align with MAGA are divided (48% support the cuts, 52% oppose).
Similarly, most (59%) of the public, including large majorities of Democrats (92%) and independents (65%), say the Trump administration and its Department of Government Efficiency (DOGE) have been “recklessly making broad cuts to programs and staff.”
In contrast, the vast majority of MAGA supporters (87%), and a narrower majority of non-MAGA Republicans and Republican leaners (57%), say that the administration is “carefully making cuts to programs and staff to reduce fraud and waste.”
On Medicaid, a contentious issue as the Trump administration and Congressional Republicans weigh budget cuts to help finance tax cuts, three quarters (76%) of the public say they oppose major federal funding cuts.
A narrow majority of Republicans (55%), as well as larger majorities of Democrats (95%) and independents (79%), oppose major Medicaid cuts. MAGA supporters are closely divided on major funding cuts to Medicaid, with similar shares in favor (51%) and opposed (49%) to major cuts.
Large Majorities Oppose Specific Cuts to Federal Health Programs and Agencies
The poll also gauges the public’s views on federal funding cuts for other health programs. In each case, more than six in 10 oppose specific federal health cuts. For example:
Most of the public also opposes major staffing cuts to key federal health agencies such as the Department of Veteran Affairs (74% oppose), Centers for Medicare & Medicaid Services (67%), the Centers for Disease Control and Prevention (63%), the Food and Drug Administration (63%), and the National Institutes of Health (62%).
Republicans and MAGA supporters narrowly oppose major staffing cuts for Veterans Affairs but favor them at each of the other agencies.
Partisans See Different Drivers of Fraud and Waste in Government Health Program
About half of the public say that fraud, waste, and abuse are a major problem in Medicaid (52%), Social Security (51%), and Medicare (50%), and a slightly larger majority say it is a major problem in private health insurance (57%).
Partisans choose different groups when asked who is most responsible for fraud, waste, and abuse in government health programs. About half of Democrats (49%) say private health insurers are most responsible, while Republicans most often name government workers (42%). Fewer across partisans blame people enrolled in the programs or hospitals, doctors and other health providers.
Designed and analyzed by public opinion researchers at KFF, this survey was conducted April 8-15, 2025, online and by telephone among a nationally representative sample of 1,380 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.
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The first few months of President Donald Trump’s second term have been punctuated by a wave of cuts to the federal workforce and government funded programs, especially in health care agencies. At least 20,000 jobs have been lost from the Department of Health and Human Services and its sub-agencies since Robert F. Kennedy Jr. assumed his job as secretary of the agency.
Most of the public (61%) oppose major cuts to staff and spending at federal health agencies, while two in five (38%) support such cuts. Views on the cuts to staff and spending are expectedly partisan, with the majority of Republicans supporting major cuts (72% support, 27% oppose), while nine in ten Democrats oppose the cuts (89% oppose, 10% support). Two-thirds of independents oppose the cuts (67%) while a third are in support (32%).
Support for major changes at federal government health agencies is driven by the most enthusiastic segment of President Trump’s political base – Republicans and Republican-leaning independents who identify as supporters of the Make America Great Again (MAGA) movement. This group, which makes up 75% of Republicans and leaners (31% of total U.S. adults) are demographically similar to other Republicans and Republican-leaning independents when it comes to race/ethnicity, gender, and income, but tend to be older. Roughly eight in ten MAGA-aligned Republicans say they generally support major cuts to staff and spending at federal health agencies, while non-MAGA Republicans are more divided (48% support and 52% oppose).
Perhaps a reflection of the entrenched partisan views, hearing arguments for and against major cuts to staff and spending for federal government health agencies causes few people to change their views. When those who support cuts to the agencies hear that the cuts would negatively impact these agencies’ abilities to serve the public, about a quarter change their view, dropping overall support for the cuts to agencies nine percentage points, from 38% to 27%.
When opponents of the major cuts to federal government health agencies hear that it would help save money and reduce the size and scope of the federal government, about one in ten change their view, increasing overall support eight percentage points to about half (46%) of the public, while 53% remain opposed to the change. On many health issues, polls find that arguments can lead to large shifts in opinion, but that doesn’t seem to be the case here, with majorities continuing to oppose cuts in the face of arguments for them.
Most of the public (54%) say cuts to staff and spending at federal government health agencies by the Trump administration and Musk’s Department of Government Efficiency (DOGE) go “too far” while three in ten (31%) think the cuts are “about right” and 14% say the cuts haven’t gone far enough. Republicans are largely in favor of the level of cuts at the federal government health agencies with six in ten (63%) saying the cuts have been “about right.” This is in stark comparison to the nine in ten Democrats (90%) and six in ten independents (57%) who say the cuts to health agencies have gone “too far.” MAGA Republicans are also much more likely than non-MAGA Republicans to say the cuts to staff and spending at federal government health agencies so far are “about right”, (64% vs. 46%). In fact, one-third (33%) of non-MAGA Republicans think the cuts have gone “too far.”
In addition to believing the cuts have gone “too far,” the public expresses generally negative views about the manner in which the administration has approached these cuts. Asked which comes closer to their view, six in ten (59%) say “the administration is recklessly making broad cuts to programs and staff, including some that are necessary for agencies to function,” while a smaller share (41%) say “the administration is carefully making cuts to programs and staff to reduce fraud and waste, and to improve government efficiency.” Overall sentiment on this question is largely driven by partisanship. Large majorities of both Democrats (92%) and independents (65%) say the cuts have been reckless, while this view is shared by only one in five Republicans (18%). On the other hand, eight in ten (82%) Republicans think the administration is carefully making the cuts. MAGA supporters are much more likely to say that the administration is “carefully making cuts to programs and staff to reduce fraud and waste, and to improve government efficiency” compared to non-MAGA Republicans and Republican-leaning independents (87% vs. 57%). Notably, four in ten non-MAGA Republicans (42%) say the cuts have been reckless.
With tepid support for cuts generally, very few also support major cuts to federal funding for specific programs such as Medicaid, Medicare, and Social Security. The House budget resolution is targeting federal cuts to Medicaid for up to $880 billion or more over the next 10 years, representing 29% of state-financed Medicaid spending per resident. Trump has promised not to cut Social Security, Medicare, and Medicaid benefits.
At least three-quarters of the public oppose major cuts to funding for Social Security (84%), for Medicare (79%), and for Medicaid (76%). Beyond these major programs, large shares of the public also oppose cuts in other areas of public health, research, and disease prevention. At least two-thirds oppose cutting funding to states for mental health and addiction prevention services (74%), for tracking infectious disease outbreaks (71%), for research at universities and medical centers (69%), for HIV prevention programs (65%), and to help people who purchase health coverage through the ACA to pay their premiums (65%). About one-third or fewer support major cuts to federal funding in each of these areas.
Views on cuts to federal health spending are predictably partisan, with about nine in ten Democrats and at least two-thirds of independents opposed to funding cuts in each area included on the survey. On the other hand, about six in ten Republicans support major cuts to federal funding to help people who purchased coverage through the ACA to pay their premiums (61%) and for HIV prevention programs (61%), while about half of Republicans support cutting funding for research at universities and medical centers (56%) and for tracking infectious disease outbreaks (49%).
But majorities of Republicans oppose major cuts to funding for Social Security (73%), Medicare (64%), and Medicaid (55%). Additionally, a majority of Republicans (58%) oppose cuts to funding to states for mental health and addiction prevention services.
Many agencies have already undergone major staffing cuts under the Trump administration, including the Department of Veterans Affairs, or VA, which announced a plan to cut 83,000 jobs in March. Majorities of the public oppose major staffing cuts at government agencies with responsibilities in health. The largest opposition is to staffing cuts at the VA, which three-quarters of the public oppose.
At least six in ten of the public also oppose cuts to staff at the Centers for Medicare and Medicaid Services, or CMS (67%), the Social Security Administration, or SSA (66%), the Food and Drug Administration, or FDA (63%), the Centers for Disease Control and Prevention, or CDC (63%), HHS Office of Infectious Disease & HIV/AIDS Policy (62%), and the National Institute of Health, or NIH (62%).
At least nine in ten Democrats oppose major staffing cuts at each of the health agencies included in the survey, while majorities of Republicans (between 58% and 77%) approve of such cuts at most agencies. One exception is staffing cuts at the Department of Veterans Affairs, or VA, with Republicans divided on the issue, with half supporting the cuts (46%) and half (54%) opposing.
Republicans and Republican-leaning independents who support the MAGA movement largely support the cuts to federal funding and staff, with a few notable exceptions.
Majorities of MAGA Republicans support major cuts to federal funding for HIV programs (66%), to help pay ACA premiums (64%), and for research at universities and medical centers (62%). About half support major cuts for tracking infectious disease outbreaks (51%), for Medicaid (51%), and to states for mental health and addiction prevention services (46%). Yet, fewer than four in ten MAGA Republicans support cutting funding for Medicare (38%) and just three in ten support cutting funding for Social Security.
When it comes to cutting staff, three-quarters support major cuts to staff at the HHS Office of Infectious Disease & HIV/AIDS policy (78%), CDC (78%), NIH (77%), and the FDA (75%). Another two-thirds support major cuts to staff at SSA (65%) and CMS (65%). Notably, less than half of MAGA-supporting Republicans (47%) support cuts to the VA.
The Trump administration and DOGE have framed the cuts occurring throughout the federal government as eliminating “fraud, waste, and abuse”, implementing DOGE’s cost efficiency initiative. Large majorities of the public think fraud, waste, and abuse are a major problem facing our country’s health care programs, though most don’t view the problem as being limited to public health insurance programs. About six in ten (57%) think fraud, waste and abuse are a “major problem” in private health insurance plans, while about half say the same about Medicaid (52%), Social Security (51%), and Medicare (50%). Close to a third say fraud, waste, and abuse are a “minor problem” in each of these, while about one in ten say fraud, waste, and abuse are “not a problem”.
Republicans are about three times as likely as Democrats to say fraud, waste, and abuse are a major problem in Social Security (80% vs. 26%), Medicaid (75% vs. 25%) and Medicare (72% vs. 24%). There is a much smaller partisan difference in the share seeing fraud, waste, and abuse as a major problem in private health insurance, with two-thirds of Republicans (66%), six in ten independents (61%), and nearly half of Democrats (45%) sharing this view. MAGA-supporting Republicans are much more likely than non-MAGA Republicans to say fraud, waste, and abuse are major problem in private health insurance plans (69% vs. 58%), Medicaid (80% vs. 57%), Social Security (84% vs. 54%), and Medicare (77% vs. 53%).
Adults in the U.S. are divided when identifying culprits of fraud, waste, and abuse in government health programs. One in three (33%) say that private health insurance companies are most often responsible for fraud, waste, and abuse in government health programs, with a similar share (29%) saying government employees running the programs are most responsible. One in five (20%) think hospitals, doctors, and other health care providers are responsible for most fraud, waste, and abuse in government health programs, while one in six (17%) say the same about people enrolled in the programs.
Less than a quarter across partisans blame people enrolled in the programs or hospitals, doctors, and health care providers for fraud, waste, and abuse in government health programs. Instead, half (49%) of Democrats identify private health insurance companies as the group most responsible for fraud, waste, and abuse while four in ten (42%) Republicans place the blame on government employees running the programs.
Majorities of the public believe that cuts to staff and spending at federal health agencies will have negative impacts in a variety of areas. Six in ten say these cuts will have a “mostly negative” impact on health care for veterans (62%) and on research to find cures and treatments for cancer and other diseases (60%). More than half of adults say there will be “mostly negative” impacts on efforts to combat the spread of infectious diseases like measles and bird flu (55%) as well as food safety (53%). Half believe the cuts will have a negative impact on racial disparities in health care. Fewer than one in six expect the cuts to have positive impacts in any of these areas.
While President Trump and Elon Musk have framed many of the recent cuts as necessary to curb fraud and waste and reduce the federal budget deficit, the public is divided in their views of whether these goals are likely to be achieved. About four in ten (38%) say staff and spending cuts at federal health agencies will have a “mostly positive” impact on reducing fraud, waste, and abuse in health care, but a similar share (43%) say these cuts will have a “mostly negative” impact on reducing fraud, waste, and abuse. Similarly, while four in ten say cuts will have a positive impact on reducing the U.S. budget deficit, nearly as many (34%) say they will have a “mostly negative” impact.
Most Democrats say the cuts to staff and spending will negatively impact health care for veterans (91%), food safety (91%), research to find cures and treatments for cancer and other diseases (90%), efforts to combat the spread of infectious diseases like measles and bird flu (88%), and racial disparities in health care (87%).
Republicans are more positive about how the cuts will impact the budget and waste in health care, with at least seven in ten saying the cuts will have a “mostly positive” impact on reducing the U.S. budget deficit (73%) and reducing fraud, waste, and abuse in health care (71%). Most Democrats say the cuts to staff and spending will have a “mostly negative” impact in these areas while independents are divided in how they think the cuts will impact fraud and waste as well as reducing the U.S. budget deficit.
Republicans are also more likely than both independents and Democrats to think that the cuts to staff and spending will not have any impact on the areas that affect public health, like racial disparities in health care (65%), food safety (57%), efforts to combat infectious disease (56%), and research to find cures for treatments for cancer and other diseases (52%). Majorities of independents and Democrats think the cuts will have “mostly negative” impacts in each of these areas.
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Beginning in 2014, the Centers for Medicare & Medicaid Services (CMS) has permitted Medicare Advantage insurers to offer Rewards and Incentives Programs to their enrollees to encourage participation in activities that focus on improving health, preventing illness or injury, or promoting the efficient use of health resources. Two common ways these programs work include offering gift cards, as long as they are not redeemable for cash, or “points” or “tokens” that can then be used to acquire tangible items, such as gift cards or fitness accessories.
Completing a health risk assessment (HRA) is one of the activities for which insurers may provide a reward or incentive. HRAs are used to collect information about enrollees’ characteristics and health status. They may be conducted in the home, at a physician’s office, or via telehealth, and HRAs are also required as a component of an Annual Wellness Visit. As part of their role in ensuring coordination of care, Medicare Advantage plans must make a “best-effort” attempt to conduct an initial health risk assessment of all new enrollees within 90 days of enrollment, as well as annually.
While HRAs may be used to develop a personalized care plan and help with care management, they are also a source of diagnoses codes used to calculate a person’s risk score, and the Medicare Payment Advisory Commission (MedPAC) has estimated that Medicare Advantage plans received $15 billion in 2023 as a result of diagnoses captured during HRAs. Further, MedPAC and the Office of the Inspector General (OIG) have both found that some diagnoses are only supported by HRAs, meaning enrollees received no related care. These findings raise concerns that either these diagnoses are inaccurate, or enrollees are not receiving follow-up services for conditions documented in these assessments, while at the same time, boosting payments to plans.
Insurers are required to enter into a contract with CMS to offer Medicare Advantage plans, and each contract may offer multiple Medicare Advantage plans. Many Medicare Advantage requirements and data, such as those pertaining to network adequacy and star ratings measures, are evaluated and reported at the contract rather than the plan level. Using data submitted by Medicare Advantage insurers to CMS, this analysis examines the share of Medicare Advantage enrollees in contracts (which usually include multiple plans) that offered rewards or incentives for completing HRAs in 2023, as well as differences across Medicare Advantage insurers. (See methods for more details.) Because these data are at the contract level, we do not have data about whether individual plans offered rewards or incentives, though a review of the largest reward and incentive programs suggest these programs are broadly available.
More than six in ten (62%) or 18.2 million Medicare Advantage enrollees, were in contracts that offered a reward or incentive specifically for completing an HRA to at least some of its enrollees in 2023 (Figure 1). These contracts may also include a reward or incentive for an Annual Wellness Visit, which is mandated to include an HRA, or other activities, but specifically include a reward for completing an HRA.
One in five enrollees (20%), or nearly 6 million people, were in contracts that offered rewards and incentives for completing an Annual Wellness Visit, but do not specify rewards for HRAs more broadly. About one in ten (9% or 2.5 million) were in contracts that offered rewards and incentives for other activities with no mention of HRAs or Annual Wellness Visits. The remaining 9% of enrollees, or 2.7 million people, were in contracts that did not offer any Rewards and Incentives Programs.
Medicare Advantage insurers may offer a reward with a value intended to incentivize enrollee behavior but may not exceed the value of the health-related service. For example, a reward for completing a cancer screening cannot exceed the value of providing the screening itself. However, CMS has not identified explicit values for rewards, and it has not set a limit on how often rewards may be offered throughout the year. For 2023, rewards, typically in the form of gift cards, ranged from $10 to $100 for completing an HRA. Insurers are encouraged to offer enrollees a choice of gift cards to account for enrollees’ preferences and access to certain retailers, which may include, for example, IHOP, Chilis, Home Depot, Lowes, and CVS, among others.
The gift cards that Medicare Advantage enrollees receive for participating in certain health-related activities as described in this analysis are not the same as spending, debit, or “flex” cards that are offered by insurers to deliver extra benefits. These extra benefits include, but are not limited to, cards that help cover copays for dental, vision, and hearing benefits, and money toward over-the-counter products or food and produce.
Virtually all Medicare Advantage enrollees in Centene and CVS Health contracts (99%) and UnitedHealthcare contracts (98%) were offered a reward or incentive for completing an HRA. (Figure 2). Nearly two-thirds of enrollees in Blue Cross Blue Shield contracts (BCBS; 64%), and less than half of enrollees in Humana contracts (42%) were offered a reward or incentive for completing an HRA.
Due to data constraints, we are unable to determine which individual plans offered rewards within a contract and how many enrollees actually received a reward for completing an HRA. However, for those enrollees that do complete an HRA and receive a reward, there is the potential for insurers to receive a high return on investment for providing that reward. For example, in a recent report, OIG found that for each HRA completed in the home, Medicare Advantage insurers generated $1,869 on average in estimated risk-adjusted payments. For those HRAs conducted in a facility – typically as part of Annual Wellness Visit – insurers generated $365 on average in estimated risk-adjusted payments.
Rewards and Incentives Programs are often unique to each insurer and may also vary by contract. For example, UnitedHealthcare uses its HouseCalls program to perform HRAs in the home. It also offers rewards for completing other eligible-health related activities, such as receiving a flu shot or engaging in certain fitness activities such as biking, jogging, and swimming. Humana uses its Go365 program to encourage enrollees to participate in health and fitness activities, such as Annual Wellness Visits, preventive screenings, or being active 12 days a month. Once members have earned at least $10 in rewards, they can redeem them for gift cards in the Go365 Mall at retailers such as Barnes and Noble, Macy’s, PetSmart, and Chipotle, among others.
The current reporting requirements make it impossible to determine how many unique enrollees receive rewards, the amount insurers spend on these rewards, and the specific activities enrollees complete to earn a reward. Medicare Advantage insurers are required to submit data on rewards and incentives at the contract level rather than that at the plan level to CMS, and CMS does not specify any quality assurance procedures to identify outliers or potentially erroneous entries, as it does for some other data sets, such as prior authorization determinations. Most data fields are free text, which results in a lack of uniformity in reporting. Frequently, information on multiple rewards is entered on the same line (for example, Annual Wellness Exam, cancer screenings, and HRAs), making it difficult to determine how many individual rewards were distributed, as well as the dollar amount allocated to each reward.
Due to this complexity, it is not possible to calculate the total amount spent by insurers on the Rewards and Incentives Programs generally, nor for specific activities such as HRAs. This information would be useful to better understand how insurers use their budgets to increase the completion of HRAs and what the potential return on that investment is in the form of higher payments from CMS due to increased coding, as well as the potential to improve the quality of enrollees’ care and identify conditions early and prevent them from becoming more costly in the future.
This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.
Methods |
| This analysis uses Rewards and Incentives Programs Part C data from the Centers for Medicare and Medicaid Services (CMS) Parts C and D Limited Data Set (LDS) for contract year 2023. Medicare Advantage insurers submit the required data at the contract level to CMS, but not at the plan level. It may be possible there are plans within a contract did not offer a particular Rewards and Incentives Program. CMS also does not specify any quality assurance procedures.
This analysis reflects data on rewards and incentives for health risk assessments (HRAs) though we were unable to determine the exact number of enrollees who qualified for a reward for completing an HRA. Special Needs Plans (SNPs) are included in the analysis and are required to complete HRAs for their enrollees. Similar to non-SNPs, SNPs are able to provide a reward for the completion of this required HRA. The enrollment data are from the CMS Medicare Advantage enrollment file for March 2023 at the contract-plan-county level, which are aggregated to the contract level and merged with the rewards and incentives data. Contract-plan-county combinations are not included if there are fewer than 11 enrollees. |
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Medicaid for children plays a vital role in covering kids in the United States. As of late 2024, more than 37 million children – almost half the nation’s children – were enrolled in Medicaid or the Children’s Health Insurance Program (CHIP).
But many families may not be aware of the state and federal guidelines that make their children eligible for coverage. Here are six facts about eligibility that might help if you need Medicaid for your children.
When parents are looking for affordable children’s health insurance, they may be pleasantly surprised to learn that Medicaid income limits for children can be much higher than the limits that apply to adults.
Depending on the state, the coverage might be provided by Medicaid, a separate CHIP, or a combination of the two. But in all states except Idaho and North Dakota, Medicaid or CHIP is available to kids in households with income up to at least 200% of the federal poverty level (FPL), and in many states the income limits are much higher than that. In almost all cases, Medicaid eligibility for children is based on modified adjusted gross income alone, without considering their household’s asset levels.
The income eligibility limits for adults – especially those who are not pregnant – tend to be quite a bit lower than the limits to determine a child’s eligibility for Medicaid. So even if the adults in a household are not eligible for Medicaid, the children might be. In that scenario, the kids can be enrolled in Medicaid and the parents will need to enroll in other coverage – possibly through an employer’s plan or a policy obtained in the health insurance Marketplace.
In nine states, there’s a “coverage gap” for some low-income adults who aren’t eligible for Medicaid and whose income is too low to be eligible for Marketplace subsidies. (Income generally must be at least 100% of the federal poverty level to qualify for Marketplace subsidies). But there is no coverage gap for children, because Medicaid income limits for kids extend well above the federal poverty level in all states.
Are my children eligible for Medicaid? You can use our federal poverty level calculator to get an idea of whether your kids might be eligible for Medicaid or CHIP.
Unlike private health insurance through the Marketplace, off-exchange from an insurer, or from an employer, there is no annual enrollment window for Medicaid. An eligible person can enroll anytime. So if your kids are uninsured and you think they might be eligible for Medicaid or CHIP, you can apply for coverage on their behalf right away. You can select your state on this page to see details about eligibility and the enrollment process.
And Medicaid can be retroactive by up to three months in most states, meaning that medical expenses your kids incurred recently might be covered after they enroll.
If your employer offers family health benefits but you can’t afford the premiums, you might find that you can get help with the cost. The majority of the states have programs that use Medicaid or CHIP funds to help Medicaid-eligible and CHIP-eligible families pay for employer-sponsored health insurance (in addition to Medicaid or CHIP) if it’s available to them.
The specifics of these programs – including whether they’re voluntary or mandatory – vary from one state to another, so you’ll need to contact your state Medicaid office for details.
If your child has Medicaid in addition to other coverage, Medicaid is always the secondary payer. This means the other insurance will be primary, and Medicaid will only start to pay benefits after the claim has been processed by the primary insurance.
With limited exceptions, CHIP is not available to children who are eligible for coverage under a state health benefits plan. So if a parent works for the state and has access to family coverage under the state health benefits program, their children will generally not be eligible for CHIP.
And states can impose more restrictive limits on CHIP. For example, Utah does not allow a child to enroll in CHIP if the child could enroll in an employer-sponsored plan for less than 5% of the household’s income.
If your child is disabled or has certain special healthcare needs, they may qualify for Medicaid – even if your household’s income isn’t within the standard eligibility limits. And depending on the state and the child’s medical needs, they may qualify for Medicaid coverage for in-home care as an alternative to institutional care, without being disqualified due to their parents’ income and assets. (In other words, these kids can potentially be in households that would not otherwise qualify for income-based Medicaid, or for disability-based Medicaid — which uses both income and assets to determine eligibility.)
As is always the case with Medicaid and CHIP, the details vary by state. But if your child is disabled or has costly ongoing medical needs, you may find that they can qualify for Medicaid even if your household wouldn’t otherwise qualify based on income alone. You can reach out to the Medicaid office in your state to get more information.
If your kids are enrolled in Medicaid or CHIP, it’s important to pay attention to any paperwork you get from the state regarding their coverage. Most state Medicaid programs recheck enrollees’ eligibility each year.
Your state may be able to confirm your child’s ongoing eligibility automatically. But if not, they will send you a request for updated information, and your children can be disenrolled if you don’t respond.
Some states have changed their rules to ensure continuous Medicaid and CHIP coverage for kids up to a certain age. This means that a child’s coverage will continue regardless of changes to the family’s circumstances, and without the need for annual eligibility redeterminations. Continuous coverage extends through different ages, depending on the state:
California. and Ohio. are working to gain federal approval for continuous Medicaid coverage for children until they turn four.
There are several states with legislation pending in 2025 that would direct the state to seek federal approval for various terms of continuous Medicaid coverage for kids. They include Alaska, Montana, Rhode Island, and Texas.
Medicaid covers more than 40% of births in the U.S. Those infants are automatically covered by Medicaid or CHIP as soon as they’re born, and will remain eligible at least until their first birthday. As noted above, eligibility is redetermined annually in most states, so ongoing eligibility will depend on the household’s financial circumstances.
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
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Chronic, non-communicable diseases are the leading cause of death worldwide and make up 8 of the 10 top causes of death in the U.S. Across several chronic diseases, the U.S. has a higher burden of illness than peer nations. The reasons why are complex and include differences in how health care is managed, poverty, diet and exercise, and more.
This chart collection compares rates of chronic diseases such as obesity, diabetes, hypertension, chronic obstructive pulmonary disease (COPD), kidney disease, cancer, and depression in the U.S. to other countries of similar size and wealth, including Australia, Austria, Belgium, Canada, France, Germany, Japan, the Netherlands, Sweden, Switzerland, and the U.K.
The analysis is available through the Peterson-KFF Health System Tracker, an information hub dedicated to monitoring and assessing the performance of the U.S. health system.
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President Trump has just signed an executive order outlining several proposals related to prescription drug prices, including efforts to “improve upon” the Inflation Reduction Act, a law signed by President Biden in 2022 with several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government. In the new executive order, the Secretary of HHS is directed to work with Congress to implement a change in the Medicare Drug Price Negotiation Program to delay negotiation of so-called “small molecule” drugs beyond 7 years after FDA approval under current law. This change would mean that small molecule drugs would be on the market longer before they are eligible to be selected for Medicare drug price negotiation, which could lead to higher Medicare prescription drug spending, higher prices, and potentially higher Medicare Part D premiums.
Under current law, high-spending drugs can be selected for negotiation if they are brand-name drugs or biological products without generic or biosimilar equivalents, and at least 7 years (for small molecule drugs) or 11 years (for biologics) past their FDA approval or licensure date when the list of drugs selected for negotiation is published by the Centers for Medicare & Medicaid Services (CMS). This translates into 9 years for small molecule drugs or 13 years for biologics following FDA approval when Medicare’s negotiated prices take effect. Consistent with the new Trump administration executive order, some members of Congress have proposed legislation supported by the pharmaceutical industry to exempt small molecule drugs from selection for negotiation for an additional 4 years so that both types of drugs would be on the market for 11 years prior to being eligible for selection and for 13 years prior to Medicare’s negotiated prices taking effect.
Compared to biologics, small molecule drugs, which often take the form of pills or tablets, are typically cheaper and easier to manufacturer, easier for patients to take, and less expensive on average. Consequently, the shorter timeframe for selection of small molecule drugs has been characterized by its critics as a so-called “pill penalty,” with the pharmaceutical industry claiming that making small molecule drugs eligible for negotiation sooner than biologics will discourage investment in these drugs. However, changing the law to further delay the selection of small molecule drugs for Medicare price negotiation would come at a cost to Medicare and beneficiaries by giving drug companies 4 additional years of setting their own prices on these drugs prior to being eligible for negotiation by the federal government, unless combined with other changes to prevent higher spending.
If Medicare was not allowed to negotiate prices for small molecule drugs until 11 years after FDA approval, rather than 7 years, more than half of the Part D drugs that were selected for price negotiation in the first or second rounds – 13 out of 25 – would not have been eligible at the time drugs were selected. During the first round of negotiation (for negotiated prices taking effect in 2026), 5 of the 10 selected Part D drugs would not have been eligible for negotiations, based on the number of years since they were approved by the FDA. For the second round of negotiation (for negotiated prices taking effect in 2027), 8 of the 15 drugs would not have been selected (Figure 1, ‘Selected drugs’ tab and Table 1).
A 4-year delay in selecting small molecule drugs for price negotiation would have exempted several drugs with high total gross Medicare Part D spending in the first and second rounds of negotiation. For example, Eliquis and Jardiance, 2 of the top 3 drugs based on total gross Medicare Part D spending selected in the first round, would have been ineligible that year based on their FDA approval dates. Similarly, 2 of the top 3 drugs selected in the second round, Ozempic/Rybelsus/Wegovy (semaglutide) and Trelegy Ellipta, would have been ineligible for selection based on their approval dates. (Despite having an injectable form like many biologics, Ozempic has a molecular structure that enables it to be regulated and approved under the same pathway as small molecule drugs.)
To illustrate the implications of this potential change, under current law, small molecule drugs qualified for selection in round two of negotiation if they were approved by the FDA at least 7 years before the February 1, 2025 publication date of the list of selected drugs, or February 1, 2018, which translates to 9 years before the round two negotiated prices take effect in 2027. Ozempic was approved on December 15, 2017, which is more than 7 years before February 1, 2025, and was eligible for selection in round two under current law. However, if selection of small molecule drugs had been delayed an additional 4 years, as has been proposed, Ozempic would have been ineligible for selection. By extending the period from 7 years to 11 years after FDA approval before small molecule drugs can be selected for negotiation, Ozempic would not be eligible for negotiation until after December 5, 2028, and would have 13 years following FDA approval before Medicare’s negotiated price took effect.
The 13 drugs that would have been ineligible to be selected for negotiations during the first and second rounds under a 4-year delay for small molecule drugs accounted for two-thirds of total gross Medicare Part D spending on the 25 selected drugs, or $61 billion out of $91 billion. The 5 small molecule drugs that would have been ineligible for selection during the first round of negotiations account for $32.4 billion (64%) of the $50.5 billion total gross Part D spending on all 10 selected drugs. This is based on spending between June 2022 and May 2023, the period used to determine gross Part D spending to select drugs for the first round of price negotiation (Figure 1, ‘Spending’ tab).
The 8 drugs that would have been ineligible for selection in the second round account for $28.7 billion (71%) of the $40.7 billion in total gross Part D spending on all 15 selected drugs. This is based on spending between November 2023 and October 2024, the period used to determine gross Part D spending to select drugs for the second round of price negotiations.
If small molecule drugs had been subject to an additional 4-year delay from their FDA approval date prior to being eligible for selection in the first two rounds of Medicare drug price negotiation, Medicare would have had to select several other drugs with lower total gross Part D spending in order to round out the list of selected drugs in each year. This suggests that enacting this change in law could increase Medicare spending relative to current law due to lower savings associated with drug price negotiation, with potentially higher drug prices and premiums for Part D enrollees. While the Trump administration’s executive order suggests that other reforms could be implemented to prevent an increase in overall costs to Medicare and beneficiaries associated with this policy change, it did not specify the details of those changes.
This work was supported in part by Arnold Ventures. KFF maintains full editorial control over all of its policy analysis, polling, and journalism activities.