The 2024 election results are in: former President Donald Trump has been elected the 47th President of the United States and Republicans will also take control of a Senate majority in the next Congress. Party control of the US House is pending. Healthcare was not a primary focus for the Trump/Vance campaign, but there are several consequential healthcare decisions the new administration will face in 2025 related to ongoing implementation of the Inflation Reduction Act (IRA) and the expiration of the enhanced Affordable Care Act (ACA) premium subsidies at the end of next year. Additionally, the current Congress will need to close out its legislative session by addressing government funding and other policy provisions expiring at year’s end before the new Congress is seated in January.

Outlook for the Lame Duck Congress

Given the changed makeup of Congress heading into 2025, the 118th Congress is not likely to pursue significant legislation in the lame duck session between now and inauguration, instead punting many issues to the 119th Congress, such as reforms to pharmacy benefit managers (PBMs) and the 340B drug pricing program. However, the current Congress will need to address the government funding stopgap measure, which expires on December 20, by reaching agreement on the 12 proposed appropriations bills. They will either pass an omnibus spending bill or push the negotiations to the next Congress and administration with another continuing resolution, with the latter being the most likely outcome.

The federal debt ceiling is also set to expire on January 1, 2025, at which point the Department of Treasury would need to begin taking extraordinary measures to extend the limit later into 2025. Congress will need to raise the debt limit, most likely in the new Congress in January, and it could present an opportunity for Congressional Republicans to push for deficit reduction measures to be included in any resulting deal.

Legislative and Regulatory Healthcare Outlook for 2025

Looking ahead to 2025, a Republican-controlled Senate will help create a glidepath for President Trump’s preferred nominees in the early days of the administration. Looking further ahead, the expanded ACA premium subsidies and many of the tax cuts passed under the previous Trump administration will expire at the end of 2025 without Congressional action. Depending on control of the House, extensions of either of these two policies could set up a negotiation between Congressional Democrats and Republicans and create a potential legislative vehicle for other health-related policies, such as the PBM and 340B reforms considered in the current Congress, or incremental reforms to the IRA’s drug pricing provisions.

On the regulatory side, it is unlikely that the Trump administration will prioritize healthcare over the economy and immigration policies in the near-term. However, the early weeks and months of a new administration present opportunities to rescind policies of the outgoing administration, and the Congressional Review Act could be used to repeal recent CMS (Centers for Medicare and Medicaid Services) or HHS (Department of Health and Human Services) rules if Republicans also gain control of the House.

Examples of other early regulatory activities could include:

• Drug Pricing: Under the IRA, CMS is required to announce the next 15 drugs selected for the Medicare Drug Price Negotiation Program by February 1, 2025. CMS previously indicated that it will work with the incoming administration’s transition team to prepare for the next round of negotiation and the Trump administration will immediately be in a position to take the reins and make the process their own following inauguration on January 20. It is unclear whether a second Trump administration would seek to revive and incorporate previous proposals, such as Most Favored Nations, into the IRA negotiation process moving forward.
• Reproductive Rights: The new administration is expected to pursue efforts to restrict access and coverage to in vitro fertilization and abortion, reversing course on policies issued by the Biden administration.
• ACA Reform: While the ACA is unlikely to be repealed and replaced, a second Trump administration is likely to pursue continued expansion of Health Savings Account flexibilities and alternative health coverage offerings such as Individual Coverage Health Reimbursement Arrangements and Short-Term Limited Duration Insurance plans.
• Public Health and Vaccines: The incoming administration may also seek to restructure public health agencies, such as the National Institutes of Health and the Centers for Disease Control and Prevention, and the agendas for these agencies could be shaped by the “Make America Healthy Again” platform championed by Robert F. Kennedy Jr., who may take on a role in the new administration.
• Medicare Advantage: The new administration is likely to pursue policies that incentivize the expansion of MA, such as a return to historical rate growth. In addition, CMS could revisit Star Ratings policies finalized under the Biden Administration (e.g., the Health Equity Index). However, policymaker scrutiny on use of prior authorization and AI will likely continue, an MA could still be targeted for saving through changes to rate setting, quality measures, and risk adjustment in budget package.

Finally, while party control of state legislatures changed very little, the gain or loss of supermajorities in several states could impact key healthcare policies such as Medicaid expansion, drug price regulations, and health coverage. Similarly, changes to states’ party control trifectas (governor, state senate, state house of representatives/assembly) in a handful of states can impact the trajectory of policy implementation.

Figure 1: Post-Election Timeline

Conclusion
Across all healthcare sectors, stakeholders will need to anticipate a significantly changed policy landscape and reexamine their policy priorities and engagement strategies. To learn more about how Avalere can be your partner on post-election strategy and business planning, connect with us.