Health Policy After the Midterms: What A Divided Government Could Mean for Health Care in 2027

The Big Picture

• Divided government will constrain legislative progress. Democratic majorities in Congress will not eliminate the presidential veto or Senate vote thresholds.
• Oversight will accelerate. Congressional committees are likely to scrutinize Medicaid, Marketplace, prescription drug, reproductive health and vaccine policies advanced by the Trump Administration.
• Implementation of policy changes will not wait. States must continue preparing for major Medicaid and Marketplace changes come January amid ongoing federal debate.

Following an election that many are calling a “blue tsunami,” Democrats are set to take the majority in both the House of Representatives and Senate after making historic gains across many districts that President Trump won handily just two years ago. Come January, Washington will be divided between a Democratic Congress and a Trump White House. For Democrats, who will be newly tasked with setting the agenda in both congressional chambers, there will be many competing priorities. Looking ahead to the Presidential election in just two years, Democrats will need to balance oversight of the Trump administration and setting out a proactive agenda in areas like health care reform while also grappling with massive health care cuts enacted in the 2025 reconciliation bill, all while governing in a split control environment. While there may be a few areas of bipartisan consensus for health policymaking—such as price transparency and prescription drug pricing—making progress on these competing priorities will be a challenge.

Despite the remarkable shift in power on Capitol Hill, the Trump Administration will continue to hold considerable sway over health policy through executive action and regulatory authority. Additionally, beyond Washington, D.C., states—and at least 21 new governors across them—will oversee implementation of the considerable shifts in health care policy enacted in H.R. 1, the partisan 2025 budget reconciliation law, many of which take effect in January.

What to Expect From a Democratic Congress Come January

• Even with Democrats taking control of both chambers of Congress, enacting significant changes may be unlikely given that President Trump still holds the power to veto legislation and, despite strong margins in both chambers, Democrats don’t have the votes to override his veto.
• The new Democratic majorities will likely introduce legislation to address affordability in health care—a cross-cutting theme that 47% of registered voters “extremely important.”
• With Democrats at the helm, early legislative efforts are likely to include:
  • Repeal or delay parts of the 2025 budget reconciliation law—particularly the Medicaid cuts—since Medicaid expansion states are anticipating widespread coverage losses, and accompanying increases in uncompensated care and medical debt, along with other cuts to federal funding as a result of the law;
  • Reauthorize or extend the enhanced premium tax credits (PTCs) through the Affordable Care Act Marketplaces, where premium subsidies have reverted to pre-2021 levels and consumers face an average premium increase of about 15% at open enrollment this year;
  • Address the cost of prescription drugs, which may include consideration of a broad swath of proposals ranging from copay caps for EpiPens and inhalers to expansion of Medicare drug price negotiation; and
  • Codify Roe v. Wade protections into federal statute and re-establish a federal right to and access for abortion and reproductive health services;
  • Expand the federal health care coverage landscape, including considering proposals like: lowering the Medicare eligibility age; Medicaid buy-in; public option; options for non-Medicaid expansion states to fill the coverage gap; and expanding coverage options for kids.
• Although standalone legislation on these issues could move through the House within the first 100 days, getting the 60 votes needed for passage in the Senate is unlikely. That makes the likelihood of a 2027 budget reconciliation bill—which would only need 50 votes to pass in the Senate—seem increasingly likely. Any final legislation would still require the President’s signature.
• All of these legislative actions will be coupled with stringent oversight of Administration actions.

Divided Government Favors Oversight Over Legislation

• With Democrats taking control on Capitol Hill, the incoming Democratic chairmen of committees will have subpoena power to require testimony from members of the Administration on an array of topics.
  • In the House, the top Democrats on many of these committees are expected to remain: Rep. Pallone (D-NJ) will chair the House Energy and Commerce Committee; Rep. Neal (D-MA) will chair the House Ways and Means Committee; Rep. Raskin (D-MD) is the presumptive chair of the House Judiciary Committee; and Rep. Garcia (D-CA) is expected to lead the House Committee on Oversight. The Education and Workforce Committee Chairmanship is contested.
  • In the Senate committees that focus on health policy, the current top Democrats on the Finance (Sen. Wyden (D-OR)), Health, Education, Labor, and Pensions (HELP) (Sen. Sanders (I-VT)), and Appropriations (Sen. Murray (D-WA)) Committees are expected to take the gavels.
• Once committee leadership and membership is in place—which could take several weeks after members are sworn in—the work begins on the substance of investigations. In health care, topics that Democrats may investigate include:
  • Implementation of Medicaid and Marketplace policies enacted under the 2025 budget reconciliation bill;
  • White House-driven efforts to withhold federal Medicaid funding from states in the name of program integrity;
  • The most-favored nation drug pricing agreements with pharmaceutical manufacturers;
  • Effects of the Dobbs decision, and Administration policy, on access to reproductive health care; and
  • Vaccine policy modifications stemming from the Administration’s overhaul of the membership of the Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices (ACIP); recommended changes to the childhood vaccination schedule; changes to the United States Preventive Services Task Force (USPSTF)—the entity that evaluates scientific research to create guidelines for clinical preventive services; and the response to declining immunization rates amid increased and ongoing outbreaks of vaccine-preventable diseases like measles.
• In addition to topic-specific investigations leveraging the new subpoena power of the Democratic majorities in both chambers, there may also be momentum toward impeaching Trump Administration health officials. And Senate confirmation of Administration nominees will slow to a standstill; confirmation hearings will simply be a high-profile oversight opportunity for Democrats.

Implementation of the 2025 Reconciliation Law in 2027

• Medicaid: The election—and the legislative timeline described above—does not change the near-term operational priority in states that have expanded Medicaid to get ready to launch work reporting requirements and six-month redeterminations on January 1, 2027. While leadership changes at the state level may influence state policies in the coming months or years, states remain focused on continuing to prepare their systems, notify enrollees, and conduct training to ensure compliance with current policy even as they await updates on ongoing litigation and additional guidance from the Centers for Medicare & Medicaid Services (CMS). States will also enter their 2027 legislative seasons and make budget decisions as they await both final CMS policy and potential congressional action on other cuts in the 2025 reconciliation law that take effect in 2027 (e.g., new section 1115 budget neutrality rules and provider tax reductions in expansion states) and in 2028 (e.g., state-directed payments reductions). These misaligned state and federal timelines mean states could make plans to cut provider rates, benefits, or eligibility before knowing how the federal debates resolve. (For more, see The 80 Million's blog .)
• Marketplaces: While the major Marketplace provisions included in the 2025 budget reconciliation bill to end auto re-enrollment and eligibility for advanced PTCs pending verification go into effect January 1, 2028, the implementing regulations—released at the end of October—necessitate significant modifications to Marketplace functions across states, including eligibility and enrollment systems, notices, document processing, and consumer assistance. All of these functions must be in place in advance of the pre-open enrollment period on August 1.
• Many of the nation’s new governors pledged to address health care affordability and many promised coverage expansions. Particularly in states with Democratic trifectas, there may be newfound opportunities to innovate on health care coverage, cost containment, and affordability, both in an attempt to combat the effects of federal policy and to deliver on their platforms of enhancing affordability for residents. Here too, state leaders could be stymied by not only budget challenges but also by an unwilling federal negotiating partner, to the extent that state innovations require federal approval.

Looking Ahead

This midterm election—and the widespread rebuke of Republican power across all levels of government—will fundamentally reshape the narrative around health care policy, though the Democrats’ ability to enact policies during the 120 Congress may be limited. To keep the trust of the voters who swept them into the majority, Democratic leaders will be focused on how they can deliver on promises to address health care affordability through both large-scale reforms and smaller, potentially bipartisan efforts. And even if Democrats cannot enact sweeping policies in the 120 Congress given the president’s veto power, the debates that play out over the next two years will inform the policy positions of both parties ahead of the next presidential election cycle.