Two ways health care could complicate reconciliation

There's been some hubbub about whether health care cuts might be used to offset the cost of immigration enforcement and the Iran war if Republicans try to use a party-line budget process, called reconciliation, to avoid a Senate filibuster by Democrats.

That approach appears to be gaining favor. Republicans announced yesterday that they've agreed to fund the Department of Homeland Security, except for the parts carrying out the immigration crackdown. Those agencies would be funded separately with a reconciliation bill, as President Trump demanded.

One of the primary ways of using health care as an offset would be to fund Affordable Care Act cost-sharing reduction subsidies. It sounds counterintuitive, but funding those subsidies would save the government an estimated $37 billion over a decade by ending silver loading, a tactic that insurers use to compensate for the loss of the subsidies after President Trump put the kibosh on them during his first term. Here's a KFF explainer.

There are two obstacles to funding CSRs. For starters, the Senate parliamentarian rejected the policy as against reconciliation rules when Republicans proposed it last summer in their tax bill. That means Republicans would need to restructure the policy if they attempt it again.

The other, less discussed obstacle is abortion policy.

Disagreement over abortion policy was one of the main reasons that Congress failed to renew enhanced ACA premium tax credits. CSRs are a different policy, but the fundamentals are the same. Susan B. Anthony List President Marjorie Dannenfelser said it would demand that Republicans include abortion restrictions for both tax credits and cost-sharing reduction programs.

"Taxpayer money is still flowing to subsidize plans that cover abortion in the form of premium tax credits and cost sharing reductions," she said.

Democrats oppose these restrictions because they say the law already bans the use of tax credits for health plans that pay for abortions, except when a woman's life is endangered or for pregnancies that are a result of rape or incest. Although the point of reconciliation is to avoid compromising with Democrats, some moderate Republicans also might be uneasy with adding restrictions on the procedure, especially in an election year, and Republican margins are tighter than last year.

government funding

Budget some free time

The president is expected to release his 2027 budget proposal this week.

Budget proposals are typically agenda-setting documents filled with policies that often don't get enacted, Chelsea Cirruzzo reports. This year's could hint at the administration focus in a midterm election year. The administration already has signalled it wants to deemphasize health secretary Robery F. Kennedy Jr.'s vaccine policies and focus on efforts to cut drug prices and improve diets.

Last year, the White House proposed dramatic changes to the federal health care infrastructure, including massive cuts to the National Institutes of Health and the Centers for Disease Control and Prevention, a reorganization of the NIH, and a new agency called the Administration for a Healthy America to focus on chronic disease prevention.

Instead, Congress passed an HHS funding bill that excluded the Administration for a Healthy America, boosted biomedical research funding at the NIH, and maintained flat funding for the CDC. Overall, Congress gave $116.8 billion to HHS in fiscal 2026, a $210 million increase from fiscal 2025 and $33 billion more than the Trump administration asked for last year.

With that in mind, it'll be interesting to see whether the administration abandons any of its previous proposals, and if it does, what that might foretell for the MAHA movement.

nih

Name dropping bombs

In a recent speech, NIH Director Jay Bhattacharya invoked the name of the man credited with building America's supremacy in biomedical research. Boy, did that not go over well with the scientific community, Anil Oza reports.

Bhattacharya started his speech at the Conservative Political Action Committee in Dallas by talking about Vannevar Bush. He said the Trump administration's efforts to diminish the research dominance of elite universities and spread federal funding across the country are rooted in the ideas Bush proposed at the end of World War II.

But Bush's desire was to fund the best researchers at the best universities, said Gregg Pascal Zachary, who has written two books about Bush. "Jay is hijacking Bush's legacy for his own purposes," Pascal said.

An HHS spokesperson said Bhattacharya was referring to a section of Bush's report that calls for the government to "establish or provide new or additional scientific and technical research facilities in geographical areas or specialized fields of study or endeavor where none exist or where existing facilities are deemed by the Foundation to be inadequate."

fda

Happy anniversary

Yesterday was the one-year anniversary of 3,500 DOGE layoffs at the FDA. It also was Marty Makary's anniversary as FDA commissioner, and he marked the day with a speech to staff, according to Lizzy Lawrence, who listened to a recording of it.

Makary acknowledged the "challenging start." "We had some difficulty here due to some actions just before I came into office," Makary said.

He didn't mention the rough patches that agency staff has encountered since then, as political appointees became increasingly involved in scientific decisions and long-time experts were pushed out. But he praised workers for certain initiatives and credited some by name.

obesity drugs

The makings of a GLP-1 price war

The approval of Eli Lilly's obesity pill is expected to spark fierce competition against Novo Nordisk's new Wegovy pill, Elaine Chen reports.

People taking GLP-1s now have a few options and considerations. The pills are much easier to store and take than injections, but the injections work better. Lilly's new pill, Foundayo, is easier to take than Wegovy. But Novo has a head start, and the Wegovy pill has had a rapid uptake since it was approved in December.

gene editing

Baby KJ scientists say strict FDA rules an obstacle for academics

At six months old, Baby KJ received a gene-editing treatment that many have hoped would revive the ailing sector.

Since then, it's been unclear whether the success of Baby KJ's treatment is a one-off or the beginning of a new genetic age.

Jason Mast writes that scientists behind treating Baby KJ say they've hit a stumbling block at the FDA in their efforts to create more custom gene editing treatments for children with rare diseases.

Read more for why and what it means for the FDA's "plausible mechanism pathway."

More around STAT

Check out more exclusive coverage with a STAT+ subscription

Read premium in-depth biotech, pharma, policy, and life science coverage and analysis with all of our STAT+ articles.

What we're reading

HHS changes the U.S. health IT office's name, and its purview, STAT
CDC pauses testing for rabies and mpox, The New York Times
Supreme Court rules against Colorado ban on 'conversion therapy' for LGBTQ kids, Associated Press
America's Raw-Cheddar Chaos, The Atlantic