Policy Intelligence: Decoded. Filtered. Precise.

CONGRESS

Senate

• Senate Republicans are expected to vote on a unified budget resolution as early as this week, with a bifurcated approach to reconciliation between the House and Senate.

• The Senate budget proposal seeks to reduce Medicaid cut requirements compared to the House GOP plan, potentially setting minimum savings targets as low as $1 billion per committee rather than the House’s $880 billion Medicaid cut target.

• Senate Republicans aim to use a “current policy” baseline for their budget resolution, which would consider Trump tax cut extensions as cost-neutral-a ruling from the parliamentarian is expected this week.

• Senate Republicans are considering a $5 trillion debt limit increase (compared to the House’s $4 trillion) to ensure coverage through the 2026 midterms, with CBO projecting the U.S. will reach its debt limit by August or September 2025.

• The Senate confirmed Martin Makary as FDA Commissioner and Jayanta Bhattacharya as NIH Director, while the Senate Finance Committee advanced Mehmet Oz’s nomination for CMS Administrator to the full Senate.

House

• House Republicans passed their budget resolution in February with a narrow 217-215 vote, requiring $880 billion in cuts from the Energy and Commerce Committee (which has jurisdiction over Medicaid).

• Conservative House Republicans, particularly Freedom Caucus members, have signaled resistance to the Senate’s proposed lower spending cut thresholds.

• The House Oversight Committee advanced three healthcare-related bills: the Reorganizing Government Act (extending presidential reorganization authority), the FEHB Protection Act (verifying family member eligibility), and the Federal Accountability Committee for Transparency Act (extending pandemic response oversight).

• Both chambers are in session and expected to recess in mid-April for Easter break.

House-Senate Budget Negotiations

• Instead of aligning committee savings targets between chambers, Republican leaders plan to use different numbers for each chamber, with the House targeting at least $2 trillion in savings while the Senate may propose minimum targets as low as $3 billion.

• The novel bifurcated approach works because committee targets are considered floors (not ceilings) and the House can waive its committee instructions with a simple majority, while the Senate would need 60 votes (requiring Democratic support) to deviate from its targets.

• Senate Republicans expect to hold a vote on their budget resolution by this weekend, aiming to reconcile differences with the House version before the Easter recess begins April 11.

• The proposed Senate approach would set minimum thresholds for spending cuts while maintaining an “aspirational” goal of $2 trillion in deficit reduction, postponing harder decisions on specific programs until later in the reconciliation process.

ADMINISTRATION

HHS Reorganization

• HHS announced a major restructuring that will eliminate 10,000 additional employees (beyond 10,000 who had already departed), reducing the workforce by 25% to 62,000 employees.

• The reorganization includes consolidating 28 divisions into 15, eliminating half of regional offices, and centralizing administrative functions, with projected savings of $1.8 billion annually.

• Specific agency reductions include 3,500 FDA employees, 2,400 CDC employees, 1,200 NIH employees, and 300 CMS employees, with layoffs targeting administrative positions rather than frontline services.

• The Administration for Strategic Preparedness and Response will merge into CDC, and multiple agencies will combine into a new “Administration for a Healthy America” focusing on primary care, maternal health, mental health, and other priorities.

CMS

• CMS workforce reductions will primarily affect the Office of Minority Health (30 employees) and the Office of Program Operations and Local Engagement (200 employees).

• These offices manage Medicare Advantage and ACA marketplace compliance, casework for patients, and initiatives to address health disparities.

• The final rate notice for Medicare Advantage and Part D plans is expected in early April 2025.

• The Inpatient Prospective Payment System (IPPS) proposed rule for FY 2026, which updates hospital payment rates, is also expected in early April.

Recent Nominations

• President Trump nominated Susan Monarez to be CDC Director after withdrawing Dave Weldon’s nomination.

• Additional HHS nominations include Thomas March Bell for Inspector General, Brian Christine for Assistant Secretary for Health, and Alex Adams for Assistant Secretary for the Administration for Children and Families.

ISSUES TO WATCH

Medicaid

• Senate Republicans are working to reduce Medicaid cut requirements in the House GOP tax plan to address concerns from senators representing states with high Medicaid usage.

• The approach would provide more “flexibility” to committees on specific cuts, potentially postponing hard decisions on Medicaid and other safety net programs.

• Senators representing states with high Medicaid enrollment have expressed resistance to direct cuts to recipient benefits, including Senators from Missouri, Alabama, and West Virginia.

ACA Subsidies

• Some Senate Republicans, including Sen. Thom Tillis, have expressed support for extending enhanced ACA marketplace subsidies set to expire at the end of the year.

• This issue could potentially be addressed through bipartisan legislation after the reconciliation process concludes, possibly combined with other priorities like child tax credits.

• ACA marketplace enrollment has surged in many states, with 96% of enrollees receiving advanced premium tax credits.

340B Program

• The Bipartisan Senate 340B Working Group added Senators Kaine, Mullin, and Hickenlooper, replacing former members who retired or stepped away.

• The working group is completing its review of stakeholder feedback with plans to release formal legislative proposals for the drug discount program.

FACT DESK

• The proposed Medicaid cuts in the House budget ($880 billion) exceed the GDP of Switzerland ($818 billion)-the 20th largest economy in the world.

• The latest HHS restructuring cuts 20,000 positions-more people than the entire population of Key West, Florida.