CMS Innovation Center Announces New Original Medicare Model Focused on Whole-Person Health

On December 11, the CMS Innovation Center released a new three-year voluntary Medicare payment model, the Make America Healthy Again: Enhancing Lifestyle and Evaluating Value-based Approaches Through Evidence (MAHA ELEVATE) Model. The model aims to address common chronic diseases through the use of evidence-based functional or lifestyle interventions that complement medical care. The CMS Innovation Center will evaluate up to 30 evidence-based proposals to be implemented in Original Medicare through cooperative agreements. The total budget is $100M, with quality and cost data being collected throughout the performance period. Cooperative agreements will be awarded in two rounds for two cohorts, one in 2026 and the other in 2027. The CMS Innovation Center will release a Notice of Funding Opportunity in early 2026. Proposals are to include services that are not already covered by Original Medicare but are evidence-backed and have a nutrition or physical activity component (CMS.gov, December 11).

ACA Marketplace Regulations Delayed While Enrollment Holds Steady

According to Peter Nelson, Director of the Center for Consumer Information and Insurance Oversight (CCIIO) at CMS, the annual ACA Marketplace Exchange rule will not be published before December 25. Typically released earlier in the fall, the proposed 2027 Notice of Benefit Payment and Parameters rule is still under review at the White House Office of Management and Budget. The rulemaking includes several routine updates like open enrollment dates and out-of-pocket maximums but could also include new guidance on implementing certain ACA Marketplace provisions from the budget reconciliation bill earlier this year. Despite this delay and the ongoing uncertainty of the enhanced subsidies, 5.76 million people have signed up for coverage in both state and federal Marketplaces as of November 29, according to new data from CMS. Of the 5.76 million total, 4.6 million signed up through the federal Marketplace. Notably, 4.8 million are returning enrollees, while less than 1 million are enrolling for the first time. The open enrollment period ended on December 15, with coverage starting on January 1. The 2025 data is comparable to 2024, where 4.5 million individuals enrolled in the first few weeks (Inside Health Policy, December 12; Fierce Healthcare, December 10).

ACA Subsidy Compromise Unlikely to Happen In 2025

Efforts to extend enhanced Affordable Care Act subsidies before their December 31 expiration have stalled following failed partisan votes in the Senate and signals from House Republican leadership that no extension will be brought to the floor this year. On Tuesday, December 16, the House Rules Committee did not advance Representative Fitzpatrick’s amendment to the Republican health bill that would have extended the tax credits nor the Democrats’ extension. Instead, the Committee advanced a clean version of the Lowering Health Care Premium for All Americans Act put forward by Republican House leadership. Following the committee meeting, Rep. Fitzpatrick joined the House Democrats’ discharge petition. Three other House Republicans shortly followed suit on December 17. Now, the House must vote on a clean three-year extension of the tax credits, though there must be a waiting period, moving the vote to January. However, Speaker Mike Johnson could move up the vote.  Without any extension, independent analysts estimate that exchange enrollees would face average premium increases of about $1,000 per year, with some consumers seeing significantly larger increases. The Congressional Budget Office has estimated that millions of people would lose coverage as higher premiums lead individuals to drop plans. Many lawmakers expect negotiations to slip into 2026, with the January 30 government funding deadline increasingly viewed as the next realistic opportunity for action (Politico, December 11; Inside Health Policy, December 17; Politico, December 17).

Senators Request Details on MFN Drug Pricing and Medicaid Model

In a letter sent Thursday, December 11, Senate Finance Committee Ranking Member Ron Wyden (D-OR) and seven other Democratic senators wrote to Pfizer, Eli Lilly, AstraZeneca, and Novo Nordisk seeking clarification on how the companies’ most favored nation drug-pricing agreements with the Trump administration would apply to Medicaid. The lawmakers questioned whether the agreements would generate savings beyond current Medicaid net prices and how they would align with CMS’s upcoming Medicaid pricing model. The letter raises concerns about unresolved elements of the CMS model, including potential manufacturer exemptions and uncertainty around which drugs and years would be covered. The senators requested additional pricing data to assess whether the agreements would deliver meaningful savings for state Medicaid programs as states face increasing budget pressure following recent Medicaid cuts (Inside Health Policy, December 12).

President Trump Signs Executive Order Limiting State AI Regulations

On December 11, President Trump signed an executive order preventing states from implementing artificial intelligence regulations that conflict with federal policy. The order directs the U.S. Attorney General to create an “AI Litigation Task Force” to challenge state laws deemed inconsistent with national objectives. Other executive departments are granted the authority to review and withhold certain federal funds from states that are in conflict with the federal government’s AI goals. The Trump administration argues that fragmented state-level regulations could stifle innovation and economic growth, prompting the need for uniform national standards. The Executive Order also states that the Trump administration must work with Congress to develop a “minimally burdensome national standard.” (Modern Healthcare, December 12).

MACPAC December 2025 Meeting

Considerations for Implementing Community Engagement Requirements

• States will soon be required to implement community engagement requirements for certain populations as required by HR 1. MACPAC staff conducted stakeholder interviews shortly after the passage of the budget reconciliation bill to elucidate key considerations for policy implementation. From the stakeholder interviews, MACPAC identified that states and other organizations sought additional clarification from CMS around definitions, the verification and exceptions process, and monitoring and evaluation of community engagement requirements. Interviewees also noted that there were many costs associated with implementing community engagement requirements, especially around IT and systems changes. During an expert panel discussion on the topic, a CMS official indicated that MCOs would be able to assist states in notifying beneficiaries of the upcoming changes. In January 2026, MACPAC staff will present more information about opportunities for monitoring the implementation of community engagement requirements.

State and Federal Tools for Ensuring Accountability of Medicaid Managed Care Organizations

• The majority of states and the District of Columbia contract with managed care organizations, with 73% of all Medicaid beneficiaries being enrolled in a managed care plan. MACPAC staff continued their research into the use of managed care accountability tools and described themes from stakeholder interviews about the use of accountability tools, procurement and contract requirements, and CMS oversight and guidance. Findings from the interviews suggest that procurement can be the first step in establishing plan expectations, with incentives being preferred over penalties to improve performance and create positive change. States noted that sanctions can be challenging to implement. Stakeholders also expressed that CMS could provide additional resources and guidance to assist states in procurement practices and sanction policies. Finally, MACPAC staff also provided an analysis of Managed Care Program Annual Reports which found that average sanction amount varies by the type of intervention and that the majority of reported sanctions were resolved within three months.

Children and Youth with Special Health Care Needs (CYSHCN) Transitions to Adult Coverage: T-MSIS & Interview Findings

• On December 11, MACPAC staff presented findings on transitions from child to adult Medicaid coverage for Children and Youth with Special Health Care Needs (CYSHCN), drawing on analysis of the Transformed Medicaid Statistical Information System (T-MSIS) and stakeholder interviews. The work examined how eligibility transitions intersect with other age-based changes, including the age-18 Supplemental Security Income (SSI) redetermination and the shift from child-only to adult Section 1915(c) home- and community-based services (HCBS) waivers. The analysis identified patterns of coverage transitions and gaps in enrollment during the move from child to adult Medicaid and highlighted factors affecting Medicaid redeterminations and HCBS waiver transitions. The presentation also outlined key challenges and policy considerations for state Medicaid agencies related to continuity of coverage during these overlapping transitions.