Congress unveiled a bipartisan health package on January 20, 2026, as part of a broader $1.2 trillion spending measure to fund the Department of Health and Human Services, Department of Labor, and other federal agencies through fiscal year 2026. The 771-page proposal includes major wins for providers, including a multiyear delay of Medicaid DSH cuts, key Medicare payment extensions for rural hospitals and permanent hospital-at-home authority. Lawmakers are working to pass the bill before the January 30 deadline to avoid another partial government shutdown.
The package was negotiated by key congressional leaders including Senate Appropriations Committee Chair Susan Collins (R-Maine) and ranking member Patty Murray (D-Wash.) The current proposal focuses on bipartisan healthcare priorities rather than incorporating elements from President Trump’s recently released healthcare framework, which included proposals such as most-favored-nation drug pricing and direct payments to Americans. Notably, the package does not extend the enhanced ACA subsidies that expired at the end of 2025, a point of concern for hospitals as insurance premiums rise for millions of people.
Impact to health systems and hospitals
The proposal delivers significant support to healthcare providers, particularly those serving vulnerable populations. The bill would delay Medicaid DSH payment cuts until fiscal 2028, allowing safety-net hospitals to maintain a critical source of funding for uncompensated care. Medicare’s pandemic-era telehealth waivers would be extended another two years through 2027, helping preserve remote access to care, especially for rural and underserved populations.
CMS’ Acute Hospital Care at Home waiver program would receive a five-year extension through the end of fiscal year 2030, providing hospitals with stability to invest in infrastructure, technology and staffing models for at-home acute care delivery.
The package also includes pharmacy benefit manager reforms to increase oversight, though the absence of ACA subsidy extensions means hospitals may face increased uncompensated care as patients lose coverage or face higher premiums. Federation of American Hospitals CEO Charlene MacDonald praised the agreement, stating it “protects rural Americans’ access to hospital care, mitigates harmful Medicaid cuts, and extends telehealth services many seniors have come to rely on”