CBO Warns Medicaid Rollbacks Could Strip Coverage from Millions
The Congressional Budget Office projects that up to 8.6 million Americans could lose Medicaid coverage under GOP cost-cutting proposals tied to President Trump’s legislative agenda. Options include reducing federal matching rates, capping spending in expansion states, tightening eligibility rules, and repealing recent enrollment protections. While Speaker Mike Johnson said some of the steepest cuts are off the table, proposals still under consideration could significantly shrink Medicaid rolls.
The report has intensified divisions within the GOP, with hardliners demanding deep cuts and moderates warning of political and health care fallout. Democrats have pointed to the data as being harmful to children, seniors, and people with disabilities, while Republicans say reforms are aimed at preserving Medicaid for the most vulnerable.
Key takeaways: Hospitals in Medicaid expansion states should prepare for potential reductions in covered patients and increased uncompensated care. Eligibility checks and work requirement proposals could create administrative complexity for providers and disrupt patient access. Health systems should proactively engage with state policymakers and Medicaid payers as legislative details evolve.
States Sue to Stop HHS Overhaul and Mass Layoffs
A coalition of 19 states and D.C. is suing the Trump administration over what they call the “illegal dismantling” of the Department of Health and Human Services, citing mass layoffs, grant terminations, and sweeping agency consolidation under Secretary RFK Jr.
The lawsuit claims the reorganization violates congressional authority and endangers public programs like Medicaid, Head Start, and mental health services. Plaintiffs seek to block the March 27 policy memo and halt ongoing staff reductions.
Key takeaways: Legal challenge could delay or unwind Kennedy’s HHS overhaul, affecting agency operations and public health programs. Health systems and grantees relying on HHS support should prepare for continued legal uncertainty and funding disruptions. Court ruling may clarify limits of executive power over public health infrastructure.
NIH Launches Autism Data Initiative Using Medicare and Medicaid Records
The Trump administration has announced a new NIH-CMS partnership to build a “real-world data platform” using Medicare and Medicaid claims, electronic health records, and wearable device data to investigate the causes of autism. HHS Secretary Robert F. Kennedy Jr. says the platform will initially focus on autism diagnoses before expanding to other chronic conditions. Officials emphasize the effort is not a national registry, though privacy experts and autism advocates remain concerned about potential misuse of sensitive health data and the credibility of the project.
Key takeaways: Health systems should prepare for new data-sharing protocols involving Medicaid and Medicare claims, with potential implications for research partnerships and patient privacy. Expect continued scrutiny and resistance from the autism research and advocacy community, particularly if findings are politicized or misused. Providers should proactively reassure patients about data protections and clarify that this initiative does not impact clinical care or eligibility.
FDA Taps Vinay Prasad to Lead Biologics Division
Vinay Prasad, a prominent critic of the FDA and mainstream medicine, has been appointed to lead the agency’s Center for Biologics Evaluation and Research, which regulates vaccines and gene therapies. The move signals a major ideological shift under Health Secretary RFK Jr., following the ouster of long-serving director Peter Marks.
Key takeaways: Biotech markets are reacting to regulatory uncertainty, with a 6% drop in sector ETFs following Prasad’s appointment. Hospitals and manufacturers may face tighter scrutiny of vaccine safety and slower approvals amid shifts in FDA philosophy. Providers should prepare for potential shifts in pediatric immunization guidance and greater public skepticism around FDA decisions.
On the Horizon
Senate Hearing Set on FY26 HHS Budget Proposal – On May 14, the Senate Health, Education, Labor, and Pensions (HELP) Committee will hold a full committee hearing to review President Donald Trump’s fiscal year 2026 budget request for the Department of Health and Human Services. This will mark HHS Secretary Robert F. Kennedy Jr.’s first appearance before the panel since his confirmation in February 2025.
Kennedy is expected to face bipartisan scrutiny over proposed funding cuts to the National Institutes of Health (NIH), Centers for Disease Control and Prevention (CDC), and Medicaid, as well as his controversial agency restructuring and workforce reductions. Lawmakers are also likely to question the administration’s “Make America Healthy Again” framework and its implications for vaccine policy, research funding, and the nation’s public health infrastructure
