Executive Orders Suggest Swift Pivot in Managed Care and Health Policy

Trump's executive orders target significant changes across federal agencies, regulatory frameworks, and global alignments.

Image Credit: fotofabrika - stock.adobe.com.jpeg

In his first hours as the 47th president of the United States, Donald Trump initiated an effort to rescind Biden administration policies, ranging from scaling back Affordable Care Act (ACA) provisions to withdrawing from the World Health Organization (WHO) and rescinding drug pricing initiatives. These executive orders reflect a sharp pivot in federal health policy, with the president's swift policy reversals raising concerns among public health experts and advocates about the future of pandemic preparedness, health care equity, and cost-saving reforms.

Affordable Care Act

Trump revoked then-President Joe Biden’s executive order that extended ACA enrollment periods and increased funding for organizations assisting individuals in signing up for ACA plans.1 These measures helped the Biden administration nearly double ACA enrollment to 24 million people,2 driven largely by enhanced subsidies that lowered premiums.3 Trump’s rollback could significantly impact enrollment numbers.

Research published this month demonstrated that adults with low socioeconomic status transitioning to Medicare under the ACA experienced reductions in out-of-pocket medical costs and improved health outcomes, especially in Medicaid expansion states.4 Individuals in these states had fewer limitations in daily living activities and lower medical expenses compared with those in nonexpansion states. The researchers emphasized the importance of maintaining ACA reforms and extending enhanced Marketplace subsidies to sustain health and financial benefits for vulnerable populations, particularly those approaching Medicare eligibility.

CMMI Drug Pricing Models

Trump’s revocation of a 2023 Biden executive order eliminated 3 drug pricing models under the Center for Medicare and Medicaid Innovation (CMMI).5 The models—aimed at capping out-of-pocket costs for generic drugs, expediting FDA approvals, and reducing costs of cell and gene therapies—had not yet been implemented.

• State Medicaid Programs for Costly Therapies: A model allowing states to pool resources and avoid paying for ineffective gene and cell therapies1
• Medicare Payments for Accelerated Approvals: Reduced payments for drugs granted FDA accelerated approval to incentivize confirmatory trials
• Flat $2 Co-pay for Generics: Encouraging Medicare drug plans to standardize and reduce co-pays for common generic medications

Abe Sutton, principal of Rubicon Founders and former White House aide, is expected to lead the agency under Trump, while Chris Klomp, CEO of Collective Medical, is anticipated to be the president of the Center for Medicare; both would serve under Mehmet Oz, MD, as the CMS administrator, if confirmed.5

World Health Organization

The administration’s decision to withdraw from the WHO has drawn backlash from public health experts.5 Trump’s executive order halts US funding and participation, citing mismanagement and inefficiencies within the organization. Critics warn the move undermines the nation's ability to access critical global health surveillance data, potentially hindering pandemic prevention efforts.

Pandemic Preparedness and COVID-19 Response

Several policies addressing COVID-19 testing, treatment research, and international pandemic cooperation were also reversed by Trump.6 These policies, enacted by Biden during the height of the pandemic, aimed to enhance preparedness for future public health crises.

While a number of aspects within the orders, such as workforce vaccination requirements, may no longer be critical, others outlined instructions for federal agencies to enact policies that would provide lasting support for provider organizations caring for those affected by the disease.5 Public health experts have expressed the importance of ongoing efforts working toward the development of new COVID-19 therapeutics or supporting other clinical research studying the long-term impact of COVID-19 on patients' health, which was included in policies Trump moved to reverse.

Diversity, Equity, and Inclusion

The order to dismantle diversity, equity, and inclusion (DEI) initiatives criticizes DEI policies as divisive and commits to ending their implementation across federal agencies.6 While the American public opinion of DEI in the workplace declined in the last year,7 in the same timespan, it's been a key topic among health care professionals and med students, even making its way to the Senate floor.8

Prominent points made in the Senate committee hearing emphasized the need for racial, ethnic, and gender diversity among providers for the best patient outcomes and trusted provider-patient relationships. Additionally, DEI grants and Historically Black Universities (HBUs) are critical mediators of diversity in medical school and therefore the provider workforce.

Trump’s second-term health care agenda signals a rollback of several Biden-era policies, though experts suggest these changes may have minimal immediate impact on out-of-pocket health care costs for most Americans.9 Notably, key initiatives like the $35 insulin cap, the $2000 annual cap on prescription drug costs, and Medicare’s drug price negotiation authority under the Inflation Reduction Act remain intact. However, Trump’s actions raise questions about the incoming administration's willingness to advance or support these foundational policies.

References

1. Owermohle S, Wilkerson J, Cohrs Zhang R, Lawrence L. Trump’s initial orders reverse Biden on health care costs, protections from discrimination. STAT. January 20, 2025. Accessed January 21, 2025. https://www.statnews.com/2025/01/20/trump-executive-orders-health-care-drug-pricing-aca-covid-gender-discrimination/

2. Grossi G. Despite record ACA enrollment, report reveals underinsured Americans are in crisis. AJMC®. November 21, 2024. Accessed January 21, 2025. https://www.ajmc.com/view/despite-record-aca-enrollment-report-reveals-underinsured-americans-are-in-crisis

3. Steinzor P. 24 million consumers choose ACA coverage, enrollment still open. AJMC. January 8, 2025. Accessed January 21, 2025. https://www.ajmc.com/view/24-million-consumers-choose-aca-coverage-enrollment-still-open

4. Santoro C. ACA impact on Medicare beneficiaries linked to reduced costs, improved health. AJMC. January 17, 2025. Accessed Janauary 21, 2025. https://www.ajmc.com/view/aca-impact-on-medicare-beneficiaries-linked-to-reduced-costs-improved-health

5. Muoio D, Tong N, Beavins E, Gliadkovskaya A, Fierce Healthcare Staff. What Trump's first day orders mean for healthcare: ditched drug models, pauses on rules and hiring. Fierce Healthcare. January 21, 2025. Accessed January 21, 2025. https://www.fiercehealthcare.com/regulatory/what-trumps-first-day-orders-mean-healthcare-ditched-drug-models-pauses-rules-and-hiring

6. Initial recissions of harmful executive orders and actions. Executive order. The White House. January 20, 2025. Accessed January 21, 2025. https://www.whitehouse.gov/presidential-actions/2025/01/initial-rescissions-of-harmful-executive-orders-and-actions/

7. Padilla M. Trump revokes federal diversity, equity and inclusion guidelines. The 19th. January 20, 2025. Accessed January 21, 2025. https://19thnews.org/2025/01/trump-revokes-diversity-equity-inclusion-guidelines/

8. Grossi G. Panel addresses minority physician shortage, maternal health at senate committee hearing. AJMC. May 15, 2024. Accessed January 21, 2025. https://www.ajmc.com/view/panel-addresses-minority-physician-shortage-maternal-health-at-senate-committee-hearing

9. Steinzor P. Trump reverses some Biden drug pricing initiatives, potentially impacting Medicare costs. AJMC. January 22, 2025. Accessed January 22, 2025. https://www.ajmc.com/view/trump-reverses-some-biden-drug-pricing-initiatives-potentially-impacting-medicare-costs