One week after Democrats took both chambers of Congress, the headline is bigger than the near-term policy change. The One Big Beautiful Bill Act, the 2025 law behind the Medicaid cuts, stays on the books, and in 2027 the action moves to oversight, implementation, the courts and the states.
Heading into election night, investors had bid up hospital stocks, betting in part that a Democratic Congress would delay the Medicaid cuts. We thought that bet went too far, and we still do, but the odds have shifted. Democrats won both the House and Senate, including seats in historically red states, and flipped at least five governorships, including Georgia, Iowa, Ohio, Texas and Nevada.
Control of Congress: what changes and what doesn't
Affordability decided this election. In KFF's midterm analysis, majorities said the administration's health policies had worsened their own costs (55%) and Americans' access to care (56%).
But Democrats can't undo the One Big Beautiful Bill Act alone; any repeal faces a near-certain veto. Instead, expect them to use must-pass budget negotiations as leverage to push for funding changes or delays, alongside legal challenges and pressure on implementation.
The open question is where they spend that leverage:
Clawing back Medicaid cuts. This is the bigger prize: Democrats want to reverse nearly $1 trillion in Medicaid cuts and coverage restrictions, and now is the time, before work requirements start January 1, 2027. Nebraska started eight months early, and every other state must be ready by January. Once states have built new eligibility systems and begun removing people from coverage, the cuts get much harder to undo. And because a full reversal still needs the president's signature, the more realistic goal is delaying the cuts or softening how states carry them out.
Restoring enhanced ACA subsidies. Even insurers aren't counting on quick relief: on Oscar Health's Nov. 5 earnings call, management said subsidy changes would require broader negotiations and that it doesn't expect major near-term action (and remember, 2027 premiums are already set, with open enrollment underway). Meanwhile, about a dozen states (nearly all Democratic-leaning and running their own marketplaces) are adding state-funded help on top of the remaining federal credits, including new programs in Virginia and Rhode Island and a $300 million program in California. Together, these programs are a small fraction of the roughly $35 billion a year a federal extension would cost, and in 2028 they'll compete for the same state dollars squeezed by the provider tax and directed payment cuts. Could Congress point to the states and step back? We doubt it: Florida and Texas, home to more than 8 million subsidized enrollees, have no state program, so the gap is widest where federal help matters most.
Our position: Medicaid cuts are still the most likely outcome, so plan as if they will happen. For hospitals, the bigger financial hit isn't the work requirements; it's the cut to provider taxes, which starts October 1, 2027, and the cut to state-directed payments, which starts January 1, 2028. States use both tools to pay hospitals more through Medicaid, so smaller provider taxes and directed payments mean less Medicaid money for hospitals. These cuts also land just as the 2028 campaign heats up, which gives lawmakers in both parties a reason to delay them. In plain terms, the chance that Congress delays or reverses the provider tax and state-directed payment cuts has gone from almost zero to meaningful, if still unlikely.
More doctors in Congress, and new health committee leaders
The 120th Congress will seat at least 20 physicians, matching the current Congress, and a record 21 if Rep. Greg Murphy (R-NC) wins a race that flipped to his Democratic challenger after provisional ballots were counted (ACG). For the first time in decades, Democratic physicians (11) will outnumber Republicans (9 or 10). The six-member freshman class is the largest in over a decade:
Member-elect | Chamber, state | Background |
|---|---|---|
Annie Andrews (D) | Senate, SC | Pediatrics |
Abdul El-Sayed (D) | Senate, MI | MD, epidemiologist |
Adam Hamawy (D) | House, NJ | Plastic surgery |
Richard Pan (D) | House, CA | Pediatrics |
Amish Shah (D) | House, AZ | Emergency medicine |
John Cowan (R) | House, GA | Neurosurgery |
Andrews and El-Sayed will be the first Democratic doctors in the Senate in nearly 60 years. At least four physicians lost, including Sen. Roger Marshall (R-KS). The HELP Committee also loses two key Republicans: Chair Bill Cassidy (R-LA), a physician, lost his primary, and Sen. Susan Collins (R-ME), a champion of biomedical research funding, lost her seat.
Chairs aren't final until the caucus votes in January, but reporting points to Bernie Sanders (I-VT) at HELP and Ron Wyden (D-OR) at Finance, which oversees Medicare and Medicaid. A Sanders-led HELP Committee would mark a remarkable shift in tone: more hearings on drug prices, vertical integration and corporate profits, and tougher scrutiny of HHS nominees.
Agency leadership: the FDA's lame-duck test
The FDA hasn't had a confirmed commissioner since Marty Makary resigned in May. Nominee Dr. Heidi Overton had her HELP hearing in September, but the committee hasn't voted. If Republicans don't confirm her in the lame duck, her nomination could expire and pass to a Democratic Senate.
Several Republicans have raised concerns about her views on vaccines and mifepristone. Senate Democratic Leader Chuck Schumer has warned that if the president's nominees are like his current ones, "very few of them are going to get through." The CDC, by contrast, now has a confirmed director, Dr. Erica Schwartz.
Beyond nominations, Democrats gain leverage through the 2027 FDA user fee reauthorization and through oversight. Rep. Frank Pallone (D-NJ), the likely incoming chair of the House Energy and Commerce Committee, has promised investigations, and HHS leadership, vaccine policy and the most-favored-nation drug deals are likely early targets.
What's next: Congress's first 100 days and the states
In Congress, Democrats are saying that in their first 100 hours they want to reverse the Medicaid cuts and restore the enhanced ACA subsidies. We'd temper expectations for three reasons: The party is split between Medicare for All and smaller steps. Democrats don't have a veto-proof majority, so the president can block any rollback of his law. And they still have to figure out how to pay for it.
California's Prop 40 was an experiment in how to pay for it. The one-time tax on billionaires' wealth would have funded mostly state health programs, but voters rejected it 53% to 47%. It was an early test of a pay-for heading into 2028, and it failed.
New Democratic governors put Medicaid expansion back in play. Ten states still haven't adopted the ACA expansion. In at least four, the results tilted the politics toward it:
Wisconsin: The new Democratic trifecta makes expansion easiest here, though Gov.-elect David Crowley has deferred to legislators.
Georgia: Gov.-elect Keisha Lance Bottoms calls expansion a day-one priority, but Republicans still hold the state Senate.
Texas: Gov.-elect Gina Hinojosa will push expansion with a Democratic House, but it still needs the Republican Senate.
Kansas: Democrat Cindy Holscher appears to have won the governor's race (Gov. Laura Kelly has called her governor-elect), but Republicans keep a Senate supermajority.
The other six (Alabama, Florida, Mississippi, South Carolina, Tennessee and Wyoming) show no signs of moving. Our read: Wisconsin is the likeliest to expand in 2027, while Georgia and Texas need Republican votes they don't yet have. The One Big Beautiful Bill Act also made expansion harder and costlier, since work requirements now come with it. If Congress reverses those changes, expansion gets more attractive.
Reminder: Governors can shape how the One Big Beautiful Bill Act is implemented, but they can't reverse it. Coverage losses will likely be smaller and slower in Democratic-led states. Pennsylvania's budget, for example, funds about 400 vacant caseworker positions to help manage the new six-month redetermination cycle that begins in 2027.
What doesn't change, no matter who holds the gavel
Much of 2027 runs through agencies the administration still controls. Plan for:
Medicaid cuts and work requirements are still coming, starting January 1, 2027. In Nebraska's early rollout, 92% of 533 people denied at renewal in July and August missed paperwork rather than failing the work requirement.
Drug pricing: most-favored-nation pricing, TrumpRx and possible PBM reform.
Medicare Advantage: continued star ratings litigation.
Value-based care: more mandatory models, more downside risk and new players.
340B pressure and the site-of-care shift away from hospitals.
Bottom line
Act on what you know and what you're willing to reasonably bet on. The Medicaid cuts and work requirements are coming on schedule; a rollback is possible, but it isn't a plan. Help your communities keep the coverage they've earned.
And get ready for a 2028 fight on healthcare, because it has already started. Five days after the election, Bernie Sanders, the likely next HELP chair, went on Meet the Press to put Medicare for All at the top of his list, starting with lowering the Medicare eligibility age to 55. Hakeem Jeffries, the likely next speaker, has not endorsed it. That split, more than anything Congress passes in 2027, will set the terms of the 2028 healthcare debate.
