Trump pushes Congress to codify Most Favored Nation (MFN) policies for prescription drugs, while comment period on CMS models ends February 23
The Trump Administration recently sent CMS Administrator Mehmet Oz to Capitol Hill to shore up support for the Administration’s MFN policies for drug pricing. Oz called on Senate Republicans to codify Trump’s “most favored nation” drug-pricing policies, which would tie U.S. drug prices to the prices charged in other developed countries. Oz’s push is seen by many insiders as an attempt to push back on lingering MFN opposition from many Republican congressional leaders. Trump allies also see passage of some sort of drug pricing legislation as an integral piece of the Administration’s “affordability agenda”, which they hope to spotlight in this fall’s midterm elections. As of now, only two Senate Republicans have floated MFN legislation: Josh Hawley (MO) and health committee Chair Bill Cassidy (LA). Cassidy’s bill has been shelved, but some sources say that Hawley’s Fair Prescription Drug Prices for Americans Act, co-sponsored with Sen. Peter Welch (D-VT), may gain some traction. The bipartisan Hawley-Welch legislation, introduced in May, aims to link prices to the average prices paid in six other developed countries: Canada, France, Germany, Japan, Italy and the United Kingdom. The bill prohibits pharmaceutical companies from charging U.S. consumers more than the average price of a drug in these countries. Hawley had conversations with the White House on that bill, and HHS Secretary Robert Kennedy signaled interest at a hearing to work with Hawley on this bill. On the House side, Indiana Republican Dan Meuser plans to introduce MFN drug pricing legislation. The congressional push comes as CMS is accepting public comments on its two mandatory payment models—GLOBE (Medicare Part B) and GUARD (Medicare Part D)—which seek to benchmark US Medicare prescription drug payments to prices paid in 19 other referenced countries. Comments on the two proposed rules will be accepted until February 23. A comprehensive analysis of GLOBE and GUARD can be be found here.
Health insurance executives receive bipartisan grilling on Capitol Hill
On January 22, the CEOs of America’s five largest health insurance companies faced intense bipartisan questioning during back-to-back congressional hearings focused on rising healthcare costs. The executives who appeared were Stephen Hemsley (CEO, UnitedHealth Group), David Joyner (Chairman and CEO, CVS Health), Gail Boudreaux (President and CEO, Elevance Health), David Cordani (President, CEO, and Chairman, The Cigna Group), and Paul Markovich (President and CEO, Ascendiun, the parent company of Blue Shield of California). The panel appeared before the two most powerful health care committees in the House, the House Committee on Energy and Commerce Subcommittee on Health in the morning, and the House Committee on Ways and Means in the afternoon. Members of Congress from both sides of the aisle were critical of health insurance industry. Rep. Jason Smith (R-MO), chair of the Ways and Means Committee, pointed out that the average family insurance plan now costs $27,000, claiming Obamacare premiums have climbed 80 percent in the last ten years, and one in five medical claims are denied by insurers. He noted that three of the largest health insurance companies generate nearly $1 trillion in annual revenue and pocket tens of billions in profit, with executives receiving tens of millions in bonuses. Health insurance CEOs shifted blame during the hearing, arguing that hospitals, doctors and pharmaceutical companies were the real cost drivers in increased insurance costs. Insurers were also grilled about their prior authorization practices and denial rates. A key moment came during the Energy and Commerce Committee hearing, in which Rep. Buddy Carter (R-GA), who is a pharmacist, asked Hemsley if he ever looked a patient in the eye and explained why UnitedHealthcare denied their medication. Hemsley responded that he has looked patients in the eyes many times, but doesn’t recall whether it’s regarding prior authorization. “I’m the one who had to look the patient in the eye,” Carter said. “I’m the one who had to tell them that, on your behalf, it’s not fun.” He went on to give a story about a single mother in Kentucky who was diagnosed with cancer and is being denied her medication by UnitedHealthcare. The hearing represents the first in a series of planned congressional hearings examining healthcare affordability and industry consolidation.
Health care and the midterms: Voters are concerned, but will the concern last until November?
Given the nature of the US political system, everything Congress does between now and November will ultimately center on one question: How will it impact the midterm elections? With Republicans barely hanging on to power in the House and not-so-close-for-comfort margins in the Senate, all eyes on are on November and what the political power dynamic will look like for the final two years of the Trump 2.0 Administration. According to a new public opinion poll of likely voters, health care costs are the public’s top economic concern, and many voters say the issue will have a major impact on their vote. On health care issues, including the cost of health care, voters currently trust Democrats more than Republicans, though neither party has an advantage on addressing the overall cost of living. Given a list of household expenses families worry about, about a third (32%) say that they are “very worried” about their ability to afford health care for them and their families, followed by affording food and groceries (24%), rent or mortgage (23%), monthly utility bills (22%), or gasoline and other transportation costs (17%). Democrats hope that health care and overall affordability issues will lead to victory in November, while Republicans are finding it difficult to coalesce around a health care agenda. Election prognosticators are emerging in full force as we dive deeper into 2026, with the latest analyses predicting Democrats will win the House, but Republicans likely to keep the Senate majority.
Health Policy Snippets
- Employer-covered health care costs and employee premiums increase. Several new surveys reveal total health benefit costs per employee will rise 6.5% on average in 2026 — the highest increase since 2010 — even after accounting for planned cost-reduction measures. These projections are based on over 1,700 US employers that responded to Mercer’s 2025 National Survey of Employer-Sponsored Health Plans. Based on the Mercer projections, 2026 will be the fourth consecutive year of elevated health benefit cost growth following a decade of moderate annual increases averaging only about 3%. Analysts attribute the increase to many factors, including new prescription drugs like GLP-1s for diabetes and weight loss. “There is a quiet alarm bell going off. With GLP-1s, increases in hospital prices, tariffs and other factors, we expect employer premiums to rise more sharply next year,” Kaiser Family Foundation President and CEO Drew Altman said. “Employers have nothing new in their arsenal that can address most of the drivers of their cost increases, and that could well result in an increase in deductibles and other forms of employee cost sharing again, a strategy that neither employers nor employees like but companies resort to in a pinch to hold down premium increases.”
- Rural hospitals continue to feel the pinch, with hundreds facing potential closure. Hundreds of rural hospitals across the country remain financially vulnerable, raising concerns about access to care in some of the country’s most underserved communities. Currently, 756 rural hospitals are at risk of closing, according to a recent report from the Center for Healthcare Quality and Payment Reform. Of those, 323 are deemed to be at immediate risk, meaning they could exhaust their financial reserves within the next few years. The problem is largely driven by reimbursement. Rural hospitals typically serve fewer patients than their urban counterparts, but they often face higher costs per patient because they must maintain essential services such as emergency care regardless of volume. The analysis finds that more than one-third of rural hospitals lost money overall in 2024. Many of these lack the cash reserves or alternative revenue streams needed to absorb ongoing losses, making them particularly vulnerable to sudden changes in payer mix, increased costs, or utilization. 2025’s “One Big Beautiful Bill Act” (OBBA) created a $50 billion Rural Health Transformation Program to assist rural health care providers. In December, CMS announced that all 50 states applied and will receive funding from the program. A state-by-state breakdown of allocations can be found here.
