What to Expect: The Evolving Healthcare Landscape
As we begin week two of the Trump Administration, it’s clear the healthcare landscape is poised for some significant shifts. Today and Thursday, Robert F. Kennedy Jr., President Trump’s nominee to lead the Health and Human Services Department (HHS), will participate in confirmation hearings before the Senate Finance Committee and Senate Health, Education Labor, and Pensions Committee (HELP). We can expect some heated exchanges on vaccines, abortion, and even animal cruelty. Despite the theatrics, however, there are some very real trends emerging due to government policy, market forces and political and cultural changes.
We’re monitoring those trends and are ready to assist companies in and around the healthcare industry in navigating this environment. Here’s what you can expect.
Expanding AI and Technological Innovation
What’s at stake: The COVID-19 pandemic accelerated the adoption of digital health services across the country. With the continued integration of AI in health care, this trend will accelerate even faster.
What we’re watching:
- Telehealth Expansion: The population continues to age and more Americans are living longer. To address the health needs of the nation’s aging population, expect bipartisan support in Congress to make some of the telehealth policies that were in place during the pandemic permanent, such as the Medicare telehealth flexibilities that were extended through March 31, 2025 in the recent government funding package.
- AI in Healthcare: The integration of AI into healthcare systems will intensify after the President announced a $500 billion investment in the nation’s AI infrastructure through a joint venture between OpenAI, Softbank and Oracle known as “Stargate.” During the announcement, the three CEOs called out the potential for AI to transform the healthcare landscape, with Sam Altman claiming that “as this technology progresses, we will see diseases get cured at an unprecedented rate. From streamlining patient data management to predicting treatment outcomes and finding new cures, these innovations will disrupt both the clinical and administrative sides of healthcare delivery.
Halting Health Communications
What’s at stake:During a review process across federal agencies, President Trump made sweeping, immediate actions to pause health agencies from sharing critical information on ongoing health crises and advancing public health research projects.
What we’re watching:
- Pausing External Communications from Health Agencies: In just 24 hours after President Trump’s swearing in, Trump officials directed health agencies to pause all external communications, such as health advisories, regulations, guidance, and weekly scientific reports. Here’s why this matters: This undermines the nation’s ability to swiftly track and respond to the looming threats of emerging infectious disease outbreaks such as bird flu, public health or other environmental health threats. This could also slow the development of scientific research.
- Shutting Down Research Pipelines: The Trump administration issued a sweeping directive that pauses all federal grants and loans. This directive impacts trillions of dollars in federal spending and could have a devastating effect on federally funded health care research and development projects that are underway.
- Withdrawal from the World Health Organization (WHO): President Trump once again issued an executive order for the U.S. to withdraw from the WHO. He first attempted to pull out in 2020 but the move was reversed during the pandemic by the Biden administration. A U.S. withdrawal from the WHO could significantly weaken the country’s ability to prepare for, identify and effectively address public health threats and severely complicate efforts to coordinate a global response that best protects the health of the American people.
Affordability And Accessibility
What’s at stake: While a complete repeal of the Affordable Care Act is highly unlikely, we can expect efforts to cut funding and rollback key provisions of the Affordable Care Act in order to limit its reach and to reallocate savings to the president’s other priorities.
What we’re watching:
- Expiring Tax Credits: Look for a debate among policymakers about sunsetting the enhanced premium tax credits – which CBO estimates costs $33 billion per year to make permanent – to help pay for other tax cut priorities. Without enhanced subsidies, an average of 3.8 million Americans would lose their health insurance each year. We expect this to be a political dividing line, with members of both parties in competitive districts wary of increasing the cost of their constituents’ healthcare to pay for tax cuts.
- In the States: Since the ACA passed, some states have resisted Medicaid expansion through reductions in ACA marketplace subsidies, a refusal to set up marketplace exchanges, and efforts to undermine ballot initiatives. Ten states have not adopted Medicaid expansion and will likely continue to resist calls to do so in the new year, while nine expansion states are at risk of ending expansion if the federal match rate is cut.
Medicaid and Medicare funding
What’s at stake: Both Medicare and Medicaid face funding challenges as America’s aging population rise. The new Department of Government Efficiency (DOGE) has set an ambitious goal of cutting up to $2 trillion in federal expenditures. Elon Musk recently acknowledged, however, that the administration may not meet that figure. President Trump promised on the campaign trail that Medicare and Social Security – were off the table, alongside Defense funding. However, Medicaid remains one of the remaining programs that could face changes in its structure and funding.
What we’re watching:
- Medicaid Work Requirements & Limiting Eligibility: When it comes to Medicaid, efforts to impose work requirements or restrict eligibility will intensify – as they did during Trump’s first administration – in some states, while other states may focus on expanding Medicaid access to uninsured populations. We’ll also be watching legal efforts to repeal waivers that allow for continuous year-to-year eligibility – which would require enrollees to reapply for coverage each year, likely reducing renewals.
- Medicare Advantage Changes: More than half of Medicare beneficiaries are already enrolled in Medicare Advantage, which is run by commercial insurers. President Trump worked to expand Medicare Advantage in his first term, and we are likely to see expansion efforts again, particularly with Project 2025 calling for making these insurer-run plans the default enrollment option for Medicare.
RFK Jr. takes center stage | but the real action will continue behind the scenes
What’s at stake: In the first few days of his presidency, President Trump signed a flurry of executive orders, with the promise of more. There are still numerous political and policy areas from his campaign that this administration intends to address, many of which could have significant implications for healthcare and public health systems. During the confirmation hearings this week, we expect to learn more about his plans for the department, as well as the agencies and programs the agency oversees.
What we’re watching:
- RFK Jr’s, Vaccine Position: Kennedy has openly expressed long-standing vaccine skepticism, but has since been downplaying his opposition, a shift in his stance as he seeks confirmation.
- RFK Jr’s Abortion Stance: During his presidential campaign, Kennedy took multiple contradictory stances on abortion, including at one point opposing any restrictions on the procedure. Even as he has pledged to implement Trump’s pro-life policies, some conservative organizations oppose his nomination and his answers on the issue will be key to watch during the hearings.
- RFK Jr’s Promise to Overhaul the FDA: Kennedy has claimed that the agency is in the pockets of the industries it regulates, allowing chemical additives to enter the food supply and greenlighting drugs while suppressing “cheap, generic and natural alternatives.”
Organizations in the healthcare sector must chart a course and identify proactive steps to plan for future challenges and opportunities working within the current policy, political, regulatory and market landscape to meet the needs of both patients and providers.