Congress reached a bipartisan agreement this week on a healthcare funding and policy package included in a larger $1.2 trillion spending bill aimed at averting a government shutdown. The package includes a mix of funding proposals, policy reforms and program extensions designed to support healthcare providers and public health.
Below are seven things to know about the proposal.
— The bill provides roughly $116 billion in funding for HHS through fiscal year 2026. This is $210 million more than the agency’s funding from fiscal year 2025, including a $415 million funding increase for the NIH.
— The agreement does not extend enhanced Affordable Care Act premium tax credits. Those subsidies were introduced during the pandemic to boost healthcare affordability, but they expired at the end of last year. The expiration of these subsidies doesn’t just push coverage out of reach for millions of Americans — but it could also create significant cash flow challenges for healthcare providers already battling financial pressures. As premiums rise and enrollment falls, hospitals could see higher uncompensated care and bad debt. Last year, 93% of ACA marketplace enrollees received the tax credits.
— The proposal includes reforms for pharmacy benefit managers, requiring greater transparency and accountability in Medicare Part D. It mandates clearer reporting on PBMs’ pricing, rebates and fees, as well as directs CMS to define “reasonable and relevant” contract terms that better reflect pharmacy costs. The bill also delinks PBM compensation from drug list prices and bans certain opaque practices like spread pricing, aiming to reduce incentives for PBMs to push higher‑priced drugs and retain hidden margins. Additionally, the reforms seek to improve pharmacy network access and give pharmacies a process to dispute unfair contract terms.
— The legislation would extend telehealth flexibilities through 2027. CMS’ pandemic-era telehealth waivers, which have given providers the coverage they need to offer virtual care at scale, will be extended another two years if the bill is passed. The extension would give providers and patients more certainty as virtual care remains a key access point for many patients, particularly those in rural communities.
— Hospital-at-home received a five-year extension in the bill. The extension preserves CMS reimbursement for hospital-level care delivered in patients’ homes. Hospital leaders have argued the program helps reduce capacity strain, lower costs and improve the patient experience, particularly for patients with chronic conditions.
— The proposal would delay scheduled Medicaid Disproportionate Share Hospital (DSH) cuts until fiscal year 2028. DSH payments help offset uncompensated care costs, and hospital groups have long warned that cuts could destabilize providers that serve a high share of low-income and uninsured patients.
— The bill extends CMS’ rural hospital payment programs for another year. The proposal issues one-year extensions for two programs designed to support rural hospitals: the Medicare‑dependent hospital payment adjustment program and the low‑volume hospital payment adjustment. These payments are designed to offset higher operating costs and lower patient volumes in rural areas, where access to care is often limited.
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