A New Year, Congress and Trump Administration: 10 Health Issues to Watch in 2025

As the new year begins, change is afoot inside the Beltway as the 119th Congress gets underway and Washington prepares for President Trump’s second administration. While change is bringing uncertainty on some fronts, health care issues will continue to be an area of focus. As 2024 ended and the 118th Congress wrapped up, a number of health care legislative issues were left unresolved. The Republican majorities are a defining dynamic of the 119th Congress, particularly in the House where the Republicans’ majority is razor thin. The new year will usher in new members of Congress and changes in the chairs at key committees in the House and Senate for health care issues. Against this backdrop, President-elect Trump will be looking to advance his administration’s agenda, including confirmation of his nominees early in the year. This client alert highlights 10 health care issues to watch as 2025 unfolds and Washington gets to work in the new year.

1. Appropriations Déjà Vu

It remains to be seen how the Fiscal Year (FY) 2025 appropriations will be resolved. A continuing resolution (CR) through March 14, 2025, was enacted in December (P.L. 118-158). Typically, the FY 2026 appropriations process would begin with the release of the President’s budget request. However, with the current CR expiring in mid-March and FY 2026 deliberations on the horizon, Congress may once again face delays – experiencing a sense of déjà vu as it navigates the familiar cycle of last-minute negotiations to finalize funding for FY 2025 and kickstart a process for FY 2026. The CR extended federal funding, as well as some but not all expiring health care provisions, yet the new Congress will determine when and how to finalize government funding for the rest of the fiscal year. The lack of a final agreement on FY 2025 appropriations has also left report language and community projects/congressionally directed spending in limbo. The upcoming March 14 deadline presents an opportunity for lawmakers to revisit health care provisions excluded from the CR and consider longer-term reauthorizations for some programs. As seen with the resolution of FY 2024 appropriations in March 2024, the compressed timeline for FY 2025 appropriations is creating similar challenges this year.

2. Prepare for New Executive Orders and Policy Announcements

Following the inauguration ceremony, the Trump administration is expected to unveil a flurry of executive orders and other policy announcements, which are likely to impact health programs and policies. Stakeholders will be on the lookout for early announcements that halt certain regulations put forth in 2024 under the Biden administration (see below) and include more details on how the Trump administration will pursue its “Make America Healthy Again” (MAHA) agenda, a key area of focus for Robert F. Kennedy, Jr., President-elect Trump’s nominee to serve as Secretary of Health and Human Services. Initial announcements may also provide additional insight into the Department of Government Efficiency (DOGE), the proposed presidential advisory commission aimed at reducing federal spending and the size of government, and how this cost-cutting effort impacts health care programs.

3. New Chairs at Health Committees in Congress

Republicans will chair the Senate Finance and Health, Education, Labor and Pensions (HELP) Committees in the Senate for the first time since the 116th Congress. Sen. Bill Cassidy (R-LA) will be chair and Sen. Bernie Sanders (I-VT) will be ranking member of the Senate HELP Committee. Sen. Mike Crapo (R-ID) will serve as Chair and Sen. Ron Wyden (D-OR) will serve as Ranking Member of the Senate Finance Committee. The House Energy and Commerce Committee will have a new full committee chair with Rep. Brett Guthrie (R-KY) and Health Subcommittee chair, Rep. Buddy Carter (R-GA), respectively. Rep. Frank Pallone (D-NJ) is expected to serve as Ranking Member of the full Energy and Commerce Committee and Rep. Diana DeGette (D-CO) is expected to serve as ranking member on the Health Subcommittee.  Rep. Jason Smith (R-MO) will continue as chair of the House Ways and Means Committee and Rep. Richard Neal (D-MA) will continue as ranking member on the committee. Rep. Vern Buchanan (R-FL) and Rep. Lloyd Doggett (D-TX) are expected to serve as Chair and Ranker of the Health Subcommittee respectively. Health committees are likely to coordinate with budget reconciliation efforts (see below).

4. New Health Committee Agendas

With Republican members at the helm in both the House and Senate, health committees will pursue new agendas and likely coordinate efforts with the Trump administration to address issues consistent with the MAHA theme, such as how to tackle chronic diseases. Committee agendas could include reforms of federal public health programs, advancement of innovative technology in health care, modernizing Medicare payment to physicians and other providers, and supporting rural health care. Reforms related to health insurance coverage may also be a major focus for Congress, but some aspects of health insurance could also see legislative inaction. The expanded Affordable Care Act (ACA) marketplace subsidies could be allowed to expire and changes in eligibility and federal payment for Medicaid are likely on deck for budget reconciliation (see below). These changes could prompt a new slate of proposals (and regulatory action) to expand individual health coverage through health savings and health reimbursement accounts and other arrangements.

5. The Regulatory Winds Will Be Shifting

The Biden-Harris administration has been prolific in its rulemaking and in the final days of this Presidency—so-called “midnight rulemaking”—before the next administration steps in. President-elect Trump is likely to implement an immediate regulatory “freeze” to halt rulemakings that have not yet been implemented, are in the proposed stage or under development by agencies, or under review by the Office of Management and Budget (OMB) when he takes office on January 20. Stakeholders will watch closely to see how the new administration defines its deregulatory agenda in the early days. For example, the new Trump administration could halt or alter implementation of the Medicare Transitional Coverage of Emerging Technology (TCET) rule covering breakthrough technology and revert to a former technology coverage rule promulgated under the first Trump administration, among other significant rules. Similarly, close attention will be paid to how the Trump administration will navigate major issues raised in recent rulemakings, such as the Biden-Harris administration’s proposal to expand coverage of anti-obesity medications under Medicare and Medicaid, as well as pursue development of a new regulatory agenda. The Trump administration will be the first incoming administration to set its regulatory agenda post the Loper-Bright decision.

6. HHS Nominees Will Navigate Senate Confirmation

The Senate Finance Committee and HELP Committee are expected to hold hearings early in the new year as part of the process for considering President-elect Trump’s nominees to lead the Department of Health and Human Services (HHS) and various HHS agencies, including the Food and Drug Administration (FDA), Centers for Medicare & Medicaid Services (CMS), National Institutes of Health (NIH), and for the first time, the Centers for Disease Control and Prevention (CDC), among other positions. Member and staff-level meetings with the administration’s nominees provide Senators and their staff with early opportunities to engage on health care issues. Confirmation hearings are expected to yield insight as to how each of these nominees would prioritize policy issues, including MAHA themes, if confirmed by the Senate. The timing to move nominees through the confirmation process can vary but consideration of the nominations is expected to be an early area of focus and priority in the Senate as the 119th Congress gets underway.

7. Get Ready for Budget Reconciliation

Republicans in Congress have made clear they intend to work with the Trump Administration to quickly use budget reconciliation to address their priorities. Reconciliation is a legislative procedure that enables both the Senate and House to pass legislation that has specific features and a direct impact on the federal budget with a simple majority of votes, avoiding the 60-vote threshold generally required in the Senate. Whether or not health provisions will be included remains to be seen, but provisions that modify eligibility for Medicaid coverage – such as requirements for individuals to work a minimum number of hours per week - and that repeal or delay the Medicare nurse staffing rule would reduce federal spending and likely be deemed acceptable for reconciliation if Republicans want to pursue those changes. Proposals to expand health savings accounts and provisions left out of the year-end CR in December 2024, such as longer-term Medicare telehealth flexibilities and physician payment adjustments (dubbed the “doc fix”), are less certain to be included in reconciliation as they would increase rather than decrease the federal deficit. As previous attempts have demonstrated, reconciliation can be used to increase or decrease the federal deficit; yet, details matter and it can take time to reach agreement on the contours of a package in part because of the strict criteria for what provisions can and cannot be considered as having a budgetary impact and the need for near unanimous agreement between the House and Senate given slim majorities.

8. From IRA to PBMs, the Focus on Drug Pricing Isn’t Going Away

With the enactment of the Inflation Reduction Act’s (IRA) drug pricing provisions, President-elect Trump will take office with an evolving drug pricing landscape. Stakeholders will be closely watching to see how President Trump’s second administration handles and shapes the IRA authority and drug prices writ large. Under the IRA, the second set of up to 15 drugs subject to Medicare drug price negotiation, and for which Medicare will ultimately set prices, is expected to be announced by or even before February 1, 2025. Testing new models of paying for drugs under Medicare and Medicaid could be an area of focus by the Center for Medicare & Medicaid Innovation. For example, a new model for states to pursue outcomes-based purchasing of cell and gene therapies under Medicaid, slated to begin in 2025, could be of high interest. Tactics used by pharmacy benefit managers (PBMs) that can lead to higher drug spending could be a target for regulatory action by the Centers for Medicare & Medicaid Services. While PBM reforms were left out of the final version of the CR in December, all eyes will be on Congress to see if it is able to reprise legislative efforts to pass PBM reform in the March CR or in the new session this year.

9. Moving the First OTC Monograph Drug User Fee Act Reauthorization

The Over-the-Counter (OTC) Monograph Drug User Fee Program (“OMUFA”), which modernized FDA’s OTC drug regulation process, was authorized in 2020 (P.L. 116-136) and is set to expire on September 30, 2025. The first reauthorization of OMUFA will be an area of focus for Congress in 2025. OMUFA set forth specific steps for the reauthorization process, including FDA negotiations with regulated industry and consultations with Congress, stakeholders and the public on reauthorization recommendations and requiring the HHS Secretary to transmit recommendations for reauthorization to Congress no later than January 15, 2025. As reauthorization of other FDA human medical product user fee act (UFA) programs has demonstrated, there will be pressure on Congress to ensure continuity of the user fee program and address reauthorization of OMUFA before the September 30, 2025, deadline. Congress will have essentially nine months to consider and act on the reauthorization and UFA reauthorizations usually entail multiple Committee hearings, markups and the House and Senate reconciling an agreed upon bill that can move through both chambers of Congress. Stakeholders will not only be watching to see how timely Congress is in addressing reauthorization but whether it elects to move a “clean” bill or attach policy riders, including FDA riders outside the OTC scope.   

10. The Longer-Term Outlook for Technology and AI

The use of technology in health care will continue to advance. Telehealth and the use of artificial intelligence (AI) in health care are areas of unfinished health care business to watch in the new year and as the 119th Congress gets underway. Congress and the Executive Branch have been active on these evolving policy issues. Medicare telehealth flexibilities were only extended through March 31, 2025, as Congress wrapped up its legislative business last year. This relatively short-term extension has left the longer-term outlook for telehealth uncertain and Congress will face a decision point as it approaches this upcoming March deadline. The budgetary considerations related to various telehealth policies may also make it a ripe for reconciliation considerations if Congress decides to include health provisions that increase spending, i.e., increase the federal deficit, in the reconciliation process. The Trump administration will also have a say in the longer-term outlook for telehealth as the Biden-Harris administration extended the Drug Enforcement Agency pandemic-era prescribing waivers through 2025. The policy considerations related to AI in health care span multiple federal agencies and committees of jurisdiction, and considerations may be dependent on what specific aspect of AI in health care is being considered. Policymakers have not limited their focus to how AI is being used by federal health care programs but have also looked at how the Department of Health and Human Services is using AI in carrying out the Department’s work and the expected DOGE and deregulatory areas of focus by the Trump administration may bring new elements to the AI policy conversations. These dynamics have set the stage for stakeholders to be closely watching to see how the incoming administration approaches telehealth and AI as it charts its regulatory agenda in President Trump’s second term.

Outlook for 2025: Uncertainties Abound but It Is Shaping Up to Be Another Active Year in Health Policy

Health care is always an active and evolving area of focus for Congress and the Executive Branch. With a new Congress, a new administration, new agendas, new uncertainties, and a range of unresolved health care issues, 2025 looks to be shaping up to be yet another active year on the health care front. Stakeholders will be closely watching to see how the new year unfolds on a range of health care issues both on and off the Hill.