ACA Marketplace Enrollment Declines After Years of Growth
After several years of record growth, Affordable Care Act marketplace enrollment fell to 19.2 million as of February 2026, a 13% decrease from 2025 and the first year-over-year decline since the first Trump administration. The Department of Health and Human Services attributed the decline in part to program integrity efforts that blocked an estimated 2.9 million ineligible subsidy enrollments, while KFF pointed to the expiration of enhanced premium tax credits at the end of 2025 and resulting premium increases as another contributing factor. HHS estimates improper or fraudulent marketplace enrollment declined from 5.6 million in 2025 to 2.6 million, and KFF projects average enrollment could fall further to 17.5 million by the end of 2026 (Fierce Healthcare, June 29).
Bipartisan Doctors Caucuses Move Closer to MACRA Reform Bill
Efforts to overhaul Medicare physician payment are moving forward as the House GOP and Democratic Doctors Caucuses work to finalize a bipartisan MACRA reform package. The legislation is expected to revise the Merit-based Incentive Payment System, strengthen incentives for Advanced Alternative Payment Models, and improve payment stability while reducing administrative burden for physicians. The proposal comes after years of concerns that the current payment system has contributed to reimbursement instability and financial pressures on physician practices. Lawmakers are still working through potential pay-fors, and it remains unclear whether the legislation will advance as part of a year-end health package or be taken up by the next Congress (Inside Health Policy, June 26).
HHS Announces New Contractor to Oversee TEFCA
The Department of Health and Human Services has announced that a new contractor will provide enhanced oversight to the Trusted Exchange Framework and Common Agreement (TEFCA), the federal government’s national health data sharing highway. The contractor will ensure that providers conform to established policies, conduct reviews of Qualified Health Information Networks (QHINs), and assess connected healthcare organizations. These measures are intended to address concerns within the industry that companies are posing as providers to get access to patient health information through TEFCA. These changes also follow Epic’s lawsuit against Health Gorilla, a health data network, claiming that the network company allowed others to inappropriately access patient medical records for profit through TEFCA and Carequality, another national health data sharing highway.
According to HHS, over 1 billion health records have been exchanged through TEFCA since December 2023, when it launched, growing exponentially under the Trump administration. However, Carequality exceeds 1.5 billion clinical data exchanges per month. HHS hopes that with these new oversight changes, TEFCA will continue to grow. The Office of the National Coordinator for Health Information Technology (ONC) has not yet announced which organization has received the oversight and monitoring contract (Inside Health Policy, June 26).
26 Democratic Officials File Joint Suit Against the HHS over Medicaid Work Requirements
On June 29, a coalition of Democratic officials from 25 states and DC filed a joint lawsuit in Massachusetts, challenging the legality of the work requirements interim final rule, alleging that CMS did not follow regulatory procedures, provided an insufficient time period for implementation, and adopted too narrow a framework for “medical frailty” exemptions. Plaintiffs also argue that the agency failed to address how prior Medicaid work requirement initiatives caused significant coverage declines, as well as taking into consideration how the policy will affect state programs and the healthcare market holistically (Modern Healthcare, June 29).
Steve Walsh Named Next American Hospital Association CEO
Steve Walsh has been named the next president and CEO of the American Hospital Association, succeeding Rick Pollack, who announced his retirement last year. Walsh, who has led the Massachusetts Health and Hospital Association since 2017, will take over as hospitals face federal funding reductions, changing regulations, and reimbursement pressures. He served six terms in the Massachusetts House of Representatives, including as Chair of the House Committee on Health Care Financing. In 2011, he wrote and oversaw passage of Chapter 224, the Commonwealth’s landmark 2012 healthcare reform law, which incentivized alternative payment methodologies and investment in community health while encouraging patient empowerment and primary care. He will lead the nearly 5,000-member organization, one of the nation’s largest healthcare lobbying groups (Modern Healthcare, June 30).
Senator Cassidy Releases Draft Bill for 340B Changes, Seeking Middle Ground
Senator Bill Cassidy released his draft 340B bill on June 25, aiming to find compromise between providers and drug companies participating in the program. The 340B Drug Pricing Integrity and Affordability for Patients (340B for Patients) Act would allow drug companies and hospitals to choose when they receive price reductions on 340B medications, either a discount at the time of purchase or a post-purchase rebate. The upfront discounts would follow the submission of standardized claims to a repository operated by HHS. Retroactive rebates would need to be provided to covered entities within 10 days of the submission of standardized claims data. Senator Cassidy’s bill would also require that covered entities keep a separate drug inventory, establish policies to identify eligible patients, and submit annual attestations of compliance to HHS and drug companies to receive upfront discounts at the time of purchase.
The bill would create an official definition of a 340B patient and limit the number of contract pharmacies used to dispense 340B drugs, among other policies. The 340B program has experienced a turbulent year, with the Health Resources and Services Administration (HRSA) expected to relaunch its controversial pilot program that would shift all drug rebates to post-purchase and the American Hospital Association requesting that the federal government intervene after Eli Lilly terminated 340B pricing for certain participating hospitals that had not complied with the company’s new claims data submission policy. The draft bill could face an uphill battle to pass Congress as midterm elections approach, other pressing bills arise, and Senator Cassidy’s term draws to a close. Several stakeholder groups responded to draft legislation with reservations or outright opposition, citing concerns about financial challenges that hospitals or other covered entities face in providing their patients with access to affordable prescription drugs (Modern Healthcare, June 25; Inside Health Policy, June 25).
House Ways and Means Committee Considers Bill to Change Tax-Exempt Hospital Financial Reporting
On July 1, the House Ways and Means Committee considered the Tax-Exempt Hospital Transparency Act (H.R. 9504). The draft legislation would add additional reporting requirements for non-profit hospitals. For example, tax exempt hospitals would be required to report additional information on their Form 990s, including a description of how it is addressing the needs of the community as identified by the most recent community health assessment; audited financial statements; the organization’s CMS certification number; the value, at cost, of the financial assistance provided during the tax year; and the numbers of completed financial assistance applications received, granted, and denied in the tax year.
Large tax-exempt hospitals and high-revenue tax-exempt hospital organizations must provide information for each hospital facility operated by the organization, in addition to detailing their nonclinical programming and quality improvement programs and initiatives among other new requirements. The American Hospital Association released a statement noting that while the updated legislation is an improvement from the original draft, as it stands H.R. 9504 would result in substantive administrative and financial burdens for many hospitals (House Ways & Means Committee, July 1; American Hospital Association, July 1).
CMS Releases New Healthcare Expenditure Projections
Healthcare spending in the U.S. grew 7.3% in 2025, reaching a total of $5.7 trillion, largely due to spending on hospital services and prescription drugs, according to new data released by CMS. The driving force behind the growth appears to be increased healthcare consumption similar to 2024, according to CMS actuaries. However, spending growth in 2025 exceeded the actuaries’ projections. This was the third consecutive year that U.S. health spending growth exceeded 7%, far beyond overall economic growth. It appears unlikely for this trend to change, as national health spending is projected to grow from 18% of the country’s GDP in 2024 to 20.6% in 2034, reaching $9 trillion.
In the near future, prescription drug spending is expected to have the fastest growth, exceeding spending for physician and clinical services as well as hospital services, driven by the popularity of GLP-1 medications especially in private health insurance and Medicare. Provisions from H.R. 1 last year are expected to slow Medicaid spending growth in 2026. Likewise, spending in private health insurance is expected to moderate as ACA coverage decreases. However, insurers expect that per-enrollee spending will increase as the risk pool becomes smaller and more acute. In contrast, spending in Medicare is expected to have the fastest rate of growth as the population continues to age, with the last of the Baby Boomers aging into the program and the older portion of the generation needing increased support (Healthcare Dive, June 24).
Progressive Policy Groups Release AmericaRx Model, Calling for US-Manufactured Drugs
In a recent report the Groundwork Collaborative and the Vanderbilt Policy Accelerator policy groups, propose the “AmericaRx” model, a publicly owned manufacturing network to produce drugs within the US and reduce foreign dependency and anti-competitive practices due to consolidation. The manufacturing model calls for backing from the federal government and depends heavily on collaboration with states and localities, unlike its predecessors that solely relied on regulations. The report comes as the current administration, policymakers, and stakeholders continue to the debate on how to make generic manufacturing a viable option domestically, without raising costs for beneficiaries, providers, and programs.
The model would require manufacturing to begin at a state or local level and looks at California’s CalRx program as a prime example, as the state was able to partner with a nonprofit manufacturer to bring insulin and naloxone to market. The model also looks to the CHIPS and Science Act, which expanded domestic semiconductor manufacturing in 2022 to respond to technological shifts and supply chain disruptions, as a framework. The AmericaRx model proposes a congressionally funded program with federal oversight, but maintains sufficient operational independence to oversee procurement, contracting, and coordination of a domestic manufacturing facility network (Groundwork Collaborative, June 23; Inside Health Policy, June 26).
