Federal government shutdown reaches historic duration: What will it take to strike a deal?
With no clear end in sight, the U.S. is on track to set a record for the longest federal government shutdown in history. Day 35 on Tuesday, November 4 will make this the longest shutdown, surpassing the 2017-2018 shutdown. Democrats have voted 13 times against a Republican-supported budget resolution to re-open the government. Only a handful of Democratic Senators continue to vote with Republicans. Given the filibuster rule requiring 60 votes in the U.S. Senate, there doesn’t appear to be any additional Democrats who are willing to break ranks to get a bill passed. Democrats are hoping that the November 1 sticker shock of large monthly premium increases for 2026 health care plans offered through the federal government’s Affordable Care Act (ACA) marketplace and a strong showing on November 4 in statewide elections in Virginia and New Jersey, will be enough to get Republican leaders to negotiate on continuation of premium subsidies. Democrat candidates are favored in both Virginia and New Jersey, two relatively “blue” states. Right now, health care premium subsidies are offered for people earning less than 400% of the federal poverty level (which would be about $63,000 for an individual and $129,000 for a family of four). These subsidies are set to expire. Republicans claim they’re open to negotiating continuation of the subsidies in some form, but they won’t negotiate while the government is shut down. Meanwhile, consumers shopping for plans during open enrollment are stuck making some tough choices as health insurance companies increased the price of plans by an average of 26%. President Trump has, for the most part, stayed on the sidelines of the congressional clash to reopen the government. We expect that to change in the next week or so as public opinion polls are beginning to pin more of the blame on him and congressional Republicans and more relied-upon services (such as federal nutrition assistance and air traffic) face disruptions.
Influential cost-effectiveness organization finalizes report on weight loss medications; Medicare coverage restrictions remain in place
The Institute for Clinical and Economic Review (ICER) released its final report on GLP-1 drugs on October 29 that finds the medications are cost-effective and clinically effective, but also warned they pose affordability concerns, coming as lawmakers and regulators try to determine how to move forward with the drugs. Right now, GLP-1 medications like Ozempic® and Wegovy® are often covered by insurance when prescribed for FDA-approved uses, such as Type 2 diabetes management, but coverage for weight loss varies significantly. Within the Medicare program, the medications are not covered solely for weight loss. Final publication of the ICER report will likely spark new debate on legislation to add weight loss drugs to the list of covered drugs in Medicare Part D. In 2024, the Treat and Reduce Obesity Act passed a House committee, but it did not advance to the full House for a vote. In April, the Trump Administration seemed to at least temporarily close the door on active support of efforts to add GLP-1s to Medicare Part D. This summer, a bipartisan group of lawmakers reintroduced the Treat and Reduce Obesity legislation, with Rep. Mike Kelly (R-PA) stating…”The Treat and Reduce Obesity Act takes a critical step toward improving patient costs and patient outcomes. This bipartisan legislation would allow seniors struggling with obesity to take a responsible, proactive approach to improve their health and live longer, more active lives. I look forward to working with the Trump administration and the team at CMS, including my friend Dr. Mehmet Oz, to make America healthy again!” Additional lead co-sponsors include Reps. Raul Ruiz, MD (D-CA), Gwen Moore (D-WI) and Mariannette Miller-Meeks, MD (R-IA). Given the high price tag of Medicare coverage, it’s unlikely that legislation will advance in the near future. Advocates’ best hope for coverage changes resides with HHS Secretary Robert Kennedy and his “Make America Healthy Again” movement, yet the Secretary’s anti-pharmaceuticals perspective is also likely to play a role.
CMS prepares to launch new program utilizing AI in Medicare prior authorization process, prompting concern
Artificial intelligence (AI) is increasingly being integrated into the prior authorization process in healthcare, aiming to streamline approvals but also raising concerns about its potential impact on patients’ access to care. This January, the Centers for Medicare & Medicaid Services (CMS) will launch a pilot program utilizing AI prior authorizations in a handful of states (NJ, OH, AZ, WA, TX and OK) for 17 different health care services. CMS says the 17 selected services were chosen due to the high propensity for waste, fraud and abuse. The program will run until 2031. In its operational guide published in October, CMS states… “The Center for Medicare and Medicaid Innovation (CMMI) was established to test new payment and service delivery models that reduce Medicare and Medicaid costs while maintaining or improving the quality of care. The structure of Original Medicare often leads to unnecessary treatments and increases the risk of waste, fraud, and abuse. The Wasteful and Inappropriate Service Reduction (WISeR) model tests the use of enhanced technologies, such as artificial intelligence and machine learning tools, to ensure that items and services furnished to beneficiaries in Original Medicare are in line with existing Medicare coverage criteria by working with organizations skilled in these technologies to improve the efficiency and accuracy of medical reviews. By focusing on services vulnerable to fraud and waste, the model seeks to decrease clinically inappropriate care and protect beneficiaries while ensuring continued access to appropriate services.” Democratic lawmakers are criticizing the CMS model as contradictory to the agency’s simultaneous effort to scale back prior authorization used by Medicare Advantage and other private plans. “The use of prior authorization in Medicare Advantage shows us that, in practice, [this proposal] will likely limit beneficiaries’ access to care, increase burden on our already overburdened health care work force, and create perverse incentives to put profit over patients,” a group of 17 lawmakers wrote to CMS Administrator Mehmet Oz in August. If Democrats retake control of the House and/or Senate in 2026, expect the model to receive robust scrutiny.
Health Policy Snippets
- Employer-sponsored health care premiums on the rise. With all eyes on Medicare and the ACA marketplace, we sometimes forget that more than 53% of all Americans still receive health insurance via their employer. While the increases don’t appear to be as steep as what faces marketplace consumers, a newly-released report estimates that monthly health insurance premiums will increase 6% for a family of four in employer-sponsored health plans.
- Republican and Democrat senators push for 340B reform…again. In a recent Senate hearing, Republicans and Democrats expressed support for increased transparency in how hospitals participating in the federal 340B drug discount program are using the savings to benefit patients. The hearing is the latest attempt to find consensus on what to do regarding the federal program. The program was created more than 30 years ago to allow healthcare providers that serve large populations of low-income patients to buy outpatient drugs at a significantly discounted rate. However, it’s grown massively over the years. Over 60,000 participants now use 340B, a more than 600% increase since 2000. While Republicans generally expressed support for aggressive reform, some Democrats expressed concern that reform would negatively impact rural hospitals.
- One less state Prescription Drug Affordability Board (PDAB). As the Maryland PDAB adds upper payment limits (UPLs) (otherwise known as price caps) and the Colorado PDAB announced it has capped the price of Enbrel® at $600 per dose (the first time a state has set a price ceiling for a prescription drug), New Hampshire has repealed its state PDAB. It was dissolved effective July 1, 2025. The PDAB began meeting and making recommendations in 2022.
