Reconciliation Moves Forward. H.R. 1, the One Big Beautiful Bill Act, was officially sent to the Senate after the House had to make some last-minute, mostly technical changes to the legislation to comply with the Senate’s reconciliation procedure. The changes required the House to vote again on the bill – which it did as part of a procedural rule vote on the rescissions package. The bill is also going through the Byrd rule procedures in the Senate, which could result in some provisions being dropped or modified. Republican senators also are considering modifications that they deem necessary to secure enough votes to advance the party-line bill through this chamber, where the bill can only lose three Republican votes (visit our Reconciliation Roadmap resource center for additional background on the Byrd rule and a comprehensive summary of the health provisions in H.R. 1).
Senate committees are not expected to hold markups and are instead releasing bill language within each committee’s jurisdiction on a rolling basis. This week, the Senate Health, Education, Labor, and Pensions (HELP) Committee released its language. Provisions that impact healthcare include the elimination of grad PLUS loans in the future and implementation of aggregate loan limits for graduate students in the unsubsidized graduate loan program. The Senate differs from the House here, as its draft caps the loans at $200,000 while the House caps them at $150,000. The HELP language also includes a provision to reinstate funding for cost-sharing reductions for Affordable Care Act (ACA) Marketplace plans that is almost identical to the House-passed language. Notably, the committee print does not include the House-passed provision codifying the ACA program integrity rule, which the Congressional Budget Office (CBO) scored as saving $105 billion over 10 years. The Senate is not expected to actually leave those provisions out of the full bill; the text released by committees can change before a final bill is released. We still await the Senate Finance Committee provisions, which are expected as soon as today. In addition to tax policy, the Finance Committee has jurisdiction over the Medicaid and Medicare programs and much of the ACA.
This week, it briefly appeared that senators were considering adding changes in Medicare payment policies to the reconciliation package. In particular, there was discussion surrounding Sen. Cassidy’s (R-LA) No UPCODE Act, including at a meeting between the Finance Committee and President Trump at the White House. However, as the week progressed, senators indicated unwillingness to make changes to the House-passed bill in the Medicare arena.
CBO also released new publications analyzing the distributional effects of H.R. 1. At the request of House Budget Committee Ranking Member Boyle (D-PA) and House Minority Leader Jeffries (D-NY), CBO released a letter with an updated distributional analysis, finding that H.R. 1 would cause a 3.9% decrease in household resources for the lowest 10% of the income distribution and a 2.3% increase in household resources for the highest 10% of the income distribution. CBO also released an interactive tool that allows users to see the distributional impact of various types of provisions on households with different income levels.
President Trump continues to request that the bill reach his desk for signature by July 4, 2025. Majority Leader Thune (R-SD) is working toward Senate consideration the week of June 23, which would leave time for the Senate to complete action, and the House to vote again on the Senate’s version of the bill, in days leading up to the holiday. However, that is a self-imposed deadline. If it is missed, debate would continue into July.
NIH Director Testifies on FY 2026 Budget. During the Senate Appropriations Subcommittee on Labor, HHS, Education, and Related Agencies hearing, Republicans emphasized the importance of spending NIH money on research rather than indirect costs to universities, and advocated for more research on chronic diseases and greater geographic representation in grantees. Democrats expressed concerns about delays and terminations of FY 2025 NIH funding and the proposed FY 2026 cuts impacting research on cancer and Alzheimer’s disease. They asked for more information about agency restructuring and the number of employees who have left NIH. Bhattacharya emphasized his commitment to working with Congress to improve the budget proposal and attempted to reassure senators that vital research was still being conducted.
House Approves Rescissions Package. In a 214 – 212 vote, the House approved a $9.4 billion rescissions package, agreeing to rescind funding previously appropriated for foreign aid and the Corporation for Public Broadcasting. The package includes rescissions of funding from health programs within the US Department of State and US Agency for International Development (USAID), including $500 million in global health USAID funding and $400 million in President’s Emergency Plan for AIDS Relief (PEPFAR) funding. The Senate needs a simple majority to approve the package and has until July 12, 2025, to act.
House Energy and Commerce Health Subcommittee Holds Hearing on Healthcare Supply Chain. Republicans emphasized the importance of addressing the United States’ reliance on adversarial countries for essential medications and healthcare products, highlighting the risks to national security and patient safety. Democrats pointed to the vulnerabilities in the medical supply chain exposed by the COVID-19 pandemic, stressing the need for a system that fosters a resilient and reliable supply chain. Witnesses emphasized the critical need to strengthen and secure the US pharmaceutical and medical supply chains by reducing reliance on foreign manufacturers, addressing regulatory and financial challenges, and investing in domestic production.
HHS Secretary Reconstitutes ACIP. In an op-ed, Secretary Kennedy announced the removal of all 17 members of ACIP and their pending replacement with individuals he deems free from conflicts of interest. ACIP is an independent advisory committee responsible for vaccine recommendations, which the Centers for Disease Control and Prevention adopts as official policy. The HHS secretary normally chooses ACIP members following an application and nomination process, and members serve four-year terms. Shortly after the op-ed published, Kennedy announced eight new ACIP members in an X post:
HHS Releases FY 2026 Congressional Justification for Administration for a Healthy America. The justification includes more detail about the structure and funding levels for the proposed new HHS division called the Administration for a Healthy America (AHA). HHS requests $14.1 billion in discretionary funding for AHA and $6.5 billion from other sources, for a total of $20.6 billion. Highlights include:
All other HHS FY 2026 president’s budget documents are available here, and a McDermott+ summary of the entire HHS FY 2026 request is available here. These budget documents represent a request only, and Congress may revise the proposed funding levels and programmatic and structural changes during the FY 2026 appropriations process.
White House Issues Memo Limiting Medicaid State Directed Payments. The memo calls Medicaid state directed payments (SDPs) a “gimmick” and directs the HHS secretary to reduce waste, fraud, and abuse by ensuring that Medicaid SDPs are not higher than Medicare rates. Currently, the Biden-era managed care rule allows SDPs to reach the average commercial rate, which is substantially higher than the Medicare rate.
The future of SDPs is currently being debated by Congress in the reconciliation process. H.R. 1 would cap new SDPs in expansion states at the Medicare rate and would cap new SDPs in non-expansion states at 110% of the Medicare rate; approval for existing SDPs would be grandfathered. That policy differs from what is in the Administration’s memo. The forthcoming Senate Finance Committee reconciliation language could make changes to the House bill language as well.
Judge Partially Blocks Diversity, Equity, and Inclusion EOs. The US District Court for the Northern District of California issued a partial injunction to prevent the Trump administration from enforcing three provisions of EOs 14168, 14151, and 14173 against the parties who brought the suit:
The court did not grant an injunction against the certification provision, which requires entities to certify that they do “not operate any programs promoting diversity, equity, and inclusion, that violate any applicable Federal anti-discrimination laws.”
| Reps. Matsui (D-CA) and Balderson (R-OH) and Sens. Smith (D-MN) and Cassidy (R-LA) reintroduced the Telemental Health Care Access Act, which would permanently remove the statutory requirement that Medicare beneficiaries be seen in person within six months of being treated for mental and behavioral health services through telehealth. This requirement is currently delayed until September 30, 2025. Read the press release here. |
Next week is the Juneteenth federal holiday, and the House will be in recess. The Senate is scheduled to be in session Monday through Wednesday. Next week’s Check-Up will arrive in your inboxes on Wednesday instead of Friday. If the Senate Finance Committee’s reconciliation language is not released today, we anticipate it early next week.
