Despite hospitals and health systems facing large revenue losses from the recently enacted reconciliation law, advocates and observers agree there will be ample opportunities to mitigate them.
Extended implementation timeframes and early indications from members of Congress raise the possibility that Medicaid cuts in the One Big Beautiful Bill Act (OBBBA) will not go into effect.
Multiple bills have been introduced to roll back healthcare provisions of the OBBBA, including one to double its $50 billion provider relief fund.
Some of the cuts will not go into effect until there is a new administration, which may be the key to their reversal, said Matthew Fiedler, a senior fellow at The Brookings Institution.
Many Medicaid eligibility restrictions will require states to implement them. And the Democrat-led states — where the biggest enrollment cuts were projected — have large incentives to help enrollees retain coverage, policy watchers say.
Job-based insurance costs expected to soar in 2026
A projected 8.5% increase in healthcare costs next year among employers covering 125 million workers and their families was found by an annual PwC survey of health plan actuaries.
Rising claims from increasing hospital and health system operating costs
Increasing innovations among providers to collect additional revenue
Climbing behavioral health spending
Spending on drugs, such as GLP-1s and newly launched drugs
Meanwhile, more than half of the large companies planned to increase deductibles and other out-of-pocket costs to control their healthcare costs next year, according to a survey by Mercer.
Employer healthcare costs
PwC recently found high-cost increases for employer-sponsored insurance, which included upward revisions for 2024 and 2025.
Source: PwC, Medical Cost Trend: Behind the Numbers 2026, July 16, 2025. PwC, Medical Cost Trend report, 2024.
Both Republican and Democratic members of Congress recently urged Medicare Advantage (MA) reforms, setting up the potential for compromise in areas such as prior authorization, data transparency and payment consistency.
While it remains to be seen whether any MA-related legislation gains traction in the current Congress, various bills have been proposed.
Newly introduced bipartisan legislation would ensure MA plans reimburse for all covered healthcare items and services at the same or higher rate as traditional Medicare. The bill also establishes prompt payment rules for clean in-network claims, similar to requirements in Medicare Part D.
Another bill, the Improving Seniors’ Timely Access to Care Act, would establish an electronic prior authorization process for MA plans, including standardization of transactions and clinical attachments.
A rule still in effect from the Biden administration requires electronic prior authorization for MA and Medicaid managed care plans starting in 2027. The regulations also set deadlines for resolution of prior authorization requests beginning in 2026.
MA prior authorizations
Medicare Advantage plans’ use of prior authorization has drawn increasing objections from providers and scrutiny from policymakers.
Source: KFF, Medicare Advantage Insurers Made Nearly 50 Million Prior Authorization Determinations in 2023, Jan. 28, 2025.
