Even with both chambers in recess this week, congressional attention remains focused on funding the US Department of Homeland Security (DHS). The House is expected to take up the Senate-passed DHS funding measure, which excludes funding for Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP). However, the timeline for that action has slowed. Before moving forward with the vote, House leadership is waiting to see how reconciliation to fund ICE and DHS proceeds in the Senate. Uncertainty surrounding DHS funding and reconciliation could alter both the timing and the path forward.
While the congressional recess has been relatively quiet, the release of the president’s fiscal year (FY) 2027 budget on April 3, 2026, certainly created some noise. As expected, the budget focuses less on domestic priorities such as healthcare and more on increases in defense. With respect to the US Department of Health and Human Services (HHS), the budget requests $111.1 billion in discretionary funding for FY 2027, representing a $15.8 billion (12.5%) reduction from FY 2026 levels. This proposed cut is significantly smaller than the $94.7 billion requested for FY 2026 in discretionary funding for HHS. This year’s proposal includes reorganization of some HHS agencies to create the Administration for a Healthy America (AHA), which was also included in last year’s budget but not taken up by Congress. AHA would include agencies such as the Health Resources and Services Administration and the Substance Abuse and Mental Health Services Administration, and some functionalities of the Centers for Disease Control and Prevention.
The budget does not include major policy proposals related to Medicare or Medicaid, consistent with the administration’s recent broader approach of using the budget to outline high-level priorities rather than detailed policy changes. It does, however, emphasize program integrity efforts to combat fraud, waste, and abuse in healthcare programs. The proposal includes $976 million in discretionary funding for healthcare program integrity in FY 2027, an increase of $35 million over FY 2026, with $740 million going to the Centers for Medicare & Medicaid Services. The HHS budget in brief states that Medicare program integrity efforts yielded a rate of return of more than $14 for every $1 spent in FY 2024, generating savings of more than $10 billion annually.
Looking ahead, budget hearings are expected to begin next week. HHS Secretary Kennedy is anticipated to testify before multiple congressional committees in support of the president’s budget. On the regulatory front, the final Medicare Advantage (MA) final rate notice on MA payments for 2027 is expected tonight. We also remain on the lookout for the federal independent dispute resolution operations rule and the Notice of Benefit and Payment Parameters for 2027.
In this week’s Healthcare Preview, Debbie Curtis and Rodney Whitlock join Julia Grabo to discuss their first reactions to the healthcare proposals in President Trump’s FY 2027 budget request.
