Health Policy in the First Year of Trump’s Second Administration

Trump Administration and Health Policy Shifts

Following President Donald Trump’s second inauguration on Jan. 20, 2025, policy shifts occurred immediately with considerable speed and volume across the days, weeks, and months of the administration’s first year. In this brief, the Center for Health Policy examines many of the administration’s policy changes across the past year and assesses their implications for healthcare access and costs.

As a full review of the numerous reforms exceeds this brief’s scope, this analysis is composed of fellows’ reflections on federal policy revisions under their respective expertise, ones that would likely affect and, in some cases, reshape the policy landscape and their fields.

Healthcare access and costs have been leading concerns of voters since 1992. To address these issues, the second Trump administration has primarily focused on reducing federal spending, which carries implications for insurance access, state resources, and other health programming.

Like presidents before him, Trump has relied heavily on executive orders to implement rapid change at the federal level. At the same time, many of the policy shifts directed toward healthcare occurred through his appointees to high-level agency positions and subsequent modifications to agency-level directives. Altogether, Trump’s budgetary cuts and programmatic revisions, many enacted through the One Big Beautiful Bill Act (OBBBA), have shifted certain programmatic funding responsibilities from the federal government to the states and have played a role in advancing the administration’s policy strategy.

While some aspects of these changes may result in improvements in the healthcare system, the center’s overall expectation is a decrease in access to medical services and an increase in costs of medical care.

Health Insurance Coverage

Most people rely on health insurance plans to access and pay for healthcare. The federal government provides health insurance through Medicare, Medicaid, and the Health Insurance Marketplace (ACA Marketplace), an outcome of the Affordable Care Act. In 2025, over 24 million Americans received health insurance through ACA Marketplace plans; approximately 75 million people were covered by Medicaid; and 69 million people obtained coverage through Medicare.

During its first year, the second Trump administration made significant changes to Medicaid and ACA Marketplace access, which are expected to reduce the number of people covered by these health insurance programs by 7.5 million and 2.1 million, respectively, over the next decade. The rise in uninsured Americans will not only lead to worsening health outcomes for this population by limiting their access to healthcare, but also have ripple effects on healthcare access and costs for people enrolled in both government and nongovernment insurance plans due to strains on the financial resources that underpin the entire U.S. healthcare delivery system.

Medicaid

The OBBBA, signed by Trump on July 4, 2025, implemented significant fiscal changes to the Medicaid program. According to the Congressional Budget Office (CBO), the law will cut approximately $900 billion in funding over the next decade, resulting in 7.5 million more uninsured Americans. The reductions in spending occur through the following measures: 

1. Mandatory work reporting requirements for Medicaid-expansion adult enrollees ($326 billion).
2. Limits on state provider taxes used to finance Medicaid expenditures ($191 billion).
3. Revisions to state direct payment programs ($149 billion).
4. Increased frequency of Medicaid-expansion eligibility redeterminations ($63 billion).

Most of the savings — with a projected total of $526 billion — will stem from changes affecting the 40 states that have expanded Medicaid, as a substantial share of fiscal reductions is directed specifically at the expansion population.

However, research on Medicaid work reporting requirements in Georgia and Arkansas demonstrates that workforce participation did not increase, implementation was expensive, and many potential enrollees became or remained uninsured. States are expected to respond to the loss of federal dollars by eliminating nonmandatory populations, such as postpartum women’s now full year of coverage, as well as reducing nonmandatory services, many of which help disabled enrollees remain in their communities.

States are also likely to reduce fees to providers in response to funding cuts. As Medicaid is already a below-cost payer, further reductions are expected to prompt providers to exit the program, reducing access to care for enrollees.

ACA Marketplace

The substantial changes to the ACA Marketplace stem from the OBBBA and Congress’ lapse in extending the enhanced ACA subsidies enacted in 2021, which expired in 2025. According to the CBO, the OBBBA will increase the number of uninsured people by 2.1 million in 2034, resulting in a $218 billion reduction in federal spending. These projections are based on the OBBBA’s provisions to limit the premium tax credits for some lawfully present noncitizens, implement more stringent eligibility verification procedures, and revise special enrollment periods.

The elimination of enhanced premium tax credits for citizens — or ACA subsidies — was featured prominently in the news cycle and was a primary issue in the 2025 government shutdown. As access to and the amount of ACA subsidies expanded for the American public following its enactment in 2021, more individuals purchased ACA Marketplace plans, and, thus, the insured population increased.

However, now without the subsidy extension, the CBO estimated that the number of uninsured people will rise by 2.2 million in 2026, 3.7 million in 2027, and 3.8 million each year thereafter in the next decade. As of early February 2026, enrollments for 2026 ACA Marketplace plans have declined by one million over the same time last year. As these figures are preliminary and may fluctuate as purchasers effectuate their coverage based on their new premium payment, the Center for Health Policy will continue to follow this important issue in 2026.

Healthcare Costs

Health insurance rates, whether paid by the government, employers, or individuals, is largely determined by the underlying cost of healthcare services. The Trump administration has expressed interest in reducing the cost of care, and policy options under consideration are outlined below.

Price Transparency

Costs of healthcare are particularly difficult to determine because facilities providing care and insurance programs have typically treated prices as confidential. While the 2010 ACA included efforts to increase price transparency, they were largely partial or ineffective. During the first Trump administration, more concrete policies establishing price transparency protocols were implemented through the Hospital Price Transparency final rule, the Transparency in Coverage final rule, and the No Surprises Act. Shortly after taking office in 2025, Trump renewed his interest in this direction through the executive order, “Making America Healthy Again by Empowering Patients with Clear, Accurate, and Actionable Healthcare Pricing Information.” At the same time, as part of his administration’s effort to decrease federal spending, staff and resources allocated to enforcing the No Surprises Act’s directives were minimized in 2025.

These policies’ impacts on an individual patient’s provider and service choice remain uncertain largely because facilities and insurance plans complied with these transparency requirements by creating substantial datasets that require skilled economists and informaticists to interpret them. In terms of policy and academic analyses, use of these datasets is leading to a new understanding of how widely prices and payments vary. For example, a 2025 Baker Institute study examined price transparency data and found price discrepancies for similar healthcare services across hospitals in Houston’s Texas Medical Center. However, significant data gaps highlight the need for tighter regulations around prices and reimbursement transparency if these policies are to be effective for managing medical care costs.

Hospital Payments

Many medical services, such as X-rays, MRIs, CT scans, and other diagnostic exams, can be delivered safely in outpatient settings. Under current regulations, if one of these services is delivered in a hospital, it will be more expensive than the same service delivered in a nonhospital setting. The reasons for price difference are complex and highly contested by facilities, insurance plans, and patients.

Two significant attempts to decrease payments to hospitals occurred during the second Trump administration’s first year. First, the Centers for Medicare and Medicaid Services (CMS) released the Hospital Outpatient Prospective Payment System (OPPS) final rule under the traditional Medicare program to be implemented in 2026. This rule sets the amount that Medicare will reimburse a hospital for some services to a “site-neutral” amount, reflecting the reimbursement for similar care outside of a hospital. According to CMS, this change will save Medicare $220 million in 2026. In the process, reimbursement to sites of service may be decreased by as much as 60%, which likely poses a particular financial challenge for hospitals with limited financial reserves.

The second attempt to decrease payments to hospitals was through drug price management. On April 15, 2025, Trump issued the executive order, “Lowering Drug Prices by Once Again Putting Americans First,” which contains multiple mechanisms for drug price management. One provision of the order focuses on the long-standing 340B Drug Pricing Program by limiting hospitals’ options for prices of insulin or epinephrine for low-income individuals. First established in 1992, the program permits “covered entities” — e.g., hospitals that provide uncompensated care — to purchase certain drugs at lower-than-market prices and then be reimbursed at regular rates. Theoretically, this approach allows facilities to use savings from lower drug costs for uncompensated care, but, like many well-intentioned programs, there is concern that this program has benefited the already wealthy organizations as well. Currently, the Center for Health Policy is examining this program and its association with hospital revenue and care.

Non-Medical Drivers of Health

The National Academy of Medicine has long recognized that non-medical factors, such as nutrition and environmental conditions, are more influential on health outcomes than medical care. Over the last decade, the federal government has increased investment in the provision of non-medical services, such as medically prescribed food to patients through Medicaid and Medicare.

In 2025, the second Trump administration indicated a continued interest in this approach by emphasizing the need to address the various root causes shaping one’s health. For example, the “Make Children Healthy Again” report prepared by the Make America Health Again (MAHA) Commission prioritized dietary, behavioral, and environmental factors as driving factors of health outcomes.

Altogether, federal actions across 2025 have at times supported or compromised the ability of Medicaid and Medicare to address non-medical factors, as described below.

Medicaid

Medicaid has increasingly become an important payer of non-medical drivers of health (NMDOH) services, including during the first Trump administration. However, during 2025, as part of the administration’s efforts to rescind Biden-era policies, guidance for states’ implementation of Medicaid NMDOH programs issued in 2023 and 2024 was repealed, while similar guidance issued by Trump in 2021 remains in effect. As of March 2025, NMDOH Medicaid coverage sought by states will be evaluated on a case-by-case basis going forward. Currently, six states have pending applications.

While the range of Medicaid authorities covering NMDOH services remains broad — including Section 1115 waivers, managed care in lieu of services and settings, Section 1915 waivers, state plan options, and Children’s Health Insurance Program Health Services (CHIP) initiatives — whether the current Trump administration will support this approach is uncertain.

Another potential headwind for addressing NMDOH through Medicaid is the OBBBA, which includes cuts Medicaid funding by approximately over $900 billion over the next decade. Although NMDOH services were not explicitly mentioned in the bill, these funding reductions will limit providers’ capacity to deliver optional NMDOH services.

Medicare

Medicare Advantage plans offer several non-medical services for their enrollees, including food delivery, home modification, gym memberships, and transportation. As of April 2026, these services are still offered. The second Trump administration has begun two new programs that will incorporate non-medical services into the traditional Medicare program: MAHA Enhancing Lifestyle and Evaluating Value-based Approaches Through Evidence (ELEVATE) and MAHA Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) models.

The MAHA ELEVATE Model will provide $100 million to fund three-year cooperative agreements for Medicare hospital and outpatient coverage for nutrition and physical activity. While the final funding announcement details have not been released as of this writing, it is intended to augment the effectiveness of conventional medicine, as is the case with NMDOH services.

The MAHA ACCESS Model incentivizes Medicare Part B-enrolled organizations to use digital tools to help patients meet their health goals over the program’s 10-year span. These tools may include support for lifestyle factors and connections to social services to address needs for food, housing stability, and transportation.

However, the 2026 Medicare Physician Fee Schedule narrowed physicians’ assessment of patients’ health-related social needs to focus only on physical activity and nutrition, excluding other needs such as transportation and housing. Similarly, the Medicare Hospital Inpatient Quality Reporting program discontinued NMDOH-related quality measures, which are reporting-based incentives for hospital screenings of NMDOH.

Rural Health

In the OBBBA, the Rural Health Transformation Program (2026–30) is a $50 billion investment in rural healthcare infrastructure and workforce. This wide-ranging program permits states to include NMDOH services in their plans, including funding for nutritional needs and non-medical transportation. However, early reporting on the Rural Health Transformation Program illustrates potential shortcomings related to its implementation and funding allocations.

Drug Policy

Trump has stated that reducing overdose deaths is a national priority. The Office of National Drug Control Policy released the administration’s “Statement of Drug Policy Priorities” in April 2025. Objectives include decreasing overdose deaths and prioritizing prevention, treatment, and supply reduction. Simultaneously, the administration has taken actions that may impede efforts to achieve these stated goals.

Funding and Treatment

Funding cuts and large staff reductions are hindering the federal government’s ability to address substance addiction. In March 2025, the Department of Health and Human Services (HHS) canceled or revoked approximately $11.4 billion in federal grants for substance use and mental healthcare. That same month, the HHS announced a major restructuring plan to combine the Substance Abuse and Mental Health Services Administration (SAMHSA) with several other agencies under the new Administration for a Healthy America.

While exact numbers vary, a lawsuit filed by 19 states along with Washington, D.C. alleges that SAMHSA terminated half of its employees due to the restructuring. Additionally, in January 2026, SAMHSA terminated nearly $2 billion in mental health and substance use-related grants; the funding was quickly reinstated amid widespread bipartisan criticism.

In July 2025, Trump signed the executive order, “Ending Crime and Disorder on America’s Streets,” which linked substance use to homelessness and urban crime. It called for restoration of civil commitment policies and an end to Housing First programs and harm reduction measures. In response to this order, SAMHSA announced that certain harm reduction activities — specifically supplies for safer drug use, such as syringes, sterile water, and pipes — would not be funded. Also, as a result of this order, the Opioid Response Network announced that it would no longer fund technical assistance for harm reduction activities as of August 2025.

At the end of 2025, Congress passed and Trump signed the SUPPORT for Patients and Communities Reauthorization Act of 2025, extending several substance-use prevention, treatment, and recovery programs largely through 2030.

Enforcement and Foreign Policy Actions

Following Congress’ passage of the bill, Trump signed the HALT Fentanyl Act, permanently placing fentanyl-related substances in Schedule I of the Controlled Substances Act (CSA). Trump issued a December 2025 executive order titled, “Designating Fentanyl as a Weapon of Mass Destruction,” which classified illicit fentanyl and precursor chemicals as such.

Since September 2025, the U.S. military has conducted over 50 lethal strikes on vessels in the Caribbean and eastern Pacific alleged to be carrying illegal narcotics, and many of these vessels are from Venezuela. The Trump administration cited Venezuelan fentanyl trafficking as justification for the strikes, despite little public evidence supporting these claims. Yet, in December 2025, Trump pardoned former Honduran President Juan Orlando Hernández, who was convicted in 2024 of conspiring to distribute more than 400 tons of cocaine and firearms in the U.S.

Cannabis Policy

Toward the end of 2025, Trump issued the executive order, “Increasing Medical Marijuana and Cannabidiol Research,” which directed the attorney general to expedite the process to reschedule marijuana to Schedule III of the CSA and emphasized support for medical marijuana and CBD research. However, the order does not include complete rescheduling.

When Congress passed and Trump signed appropriations legislation (HR 5371) ending the country’s longest government shutdown in history, they also revised the federal definition of hemp in a manner that would effectively prohibit most intoxicating hemp products. Federal policy’s narrowing definition of hemp is set to take effect in November 2026.

Child Health

Previously identified impacts on health insurance coverage, access to healthcare, food and safe environments apply to children as well as adults. In addition, the second Trump administration has enacted several significant policy changes with potential direct impacts on child health.

Preventative Vaccinations

The Centers for Disease Control and Prevention (CDC) reported 2,287 confirmed cases of measles, including three deaths, in the U.S. in 2025 — the highest number of measles cases in a year since the U.S. achieved elimination status in 2000. As of early May 2026, the number of confirmed measles cases stands at 1,842.

Simultaneously, the administration has implemented measures that weaken the recommendations for childhood preventative vaccinations. Trump appointed Robert F. Kennedy Jr. as the secretary of HHS in February 2025. Kennedy, well known for his vaccine skepticism, dismissed all 17 sitting members of the CDC’s Advisory Committee on Immunization Practices (ACIP) and replaced them with eight new members of his choice. The newly structured committee met in September and again in December and recommended changes to MMR-V, COVID-19, and Hepatitis B vaccines requirements and schedules.

Additionally, on Dec. 5, 2025, Trump issued a memorandum, “Aligning United States Core Childhood Vaccine Recommendations with Best Practices from Peer, Developed Countries”, during the December ACIP meeting. On Jan. 5, 2026, the CDC presented a revised childhood vaccination schedule with fewer vaccines than previously recommended.

The CDC, HHS, and presidential endorsement of this revised vaccination schedule did not follow established public review or commentary and has, consequently, been met with opposition by professional organizations and state governments. The full implications of the new, less prescriptive schedule on insurance reimbursement, vaccine supply, and preventable disease resurgence are still developing.

Nutrition

Trump’s executive order, “Establishing the President’s Make America Healthy Again Commission,” created the MAHA Commission, which was given 100 days to identify policy solutions to address childhood chronic diseases and another 80 days to propose policy solutions to childhood chronic diseases. In May 2025, the commission published their conclusions of the major factors underlying chronic illness in children: 1) Poor diet, 2) aggregation of environmental chemicals, 3) lack of physical activity and chronic stress, and 4) overmedicalization. This initial report was quickly followed in September 2025 by a providing over 120 recommendations “for executive actions to address the childhood chronic disease crisis through advancing research, realigning incentives, increasing public awareness, and fostering private sector collaborations.”

These MAHA reports drew connections between “ultra-processed foods” in children’s diets and obesity, diabetes, mental health disorders, and other chronic conditions. These documents charged the rise in ultra-processed foods to the food manufacturing industry and the Dietary Guidelines for Americans (DGA), created by the U.S. Department of Agriculture (USDA) and HHS in 1980.

The DGA is significant because it not only provides policymakers and health professionals with nutritional advice but also shapes multiple other programs funded by the federal and state governments including which foods can be provided in free lunch programs in public schools and what foods can be purchased using Supplemental Nutrition Assistant Program (SNAP) benefits. Additionally, reshaping the food manufacturing industry to disincentivize ultra-processed foods will be a monumental undertaking. In line with the previously published MAHA reports, the HHS and USDA’s revisions to the federal dietary guidelines were revealed on Jan. 12, 2026.

Changes to DGA have the potential to impact the nutrition of children across the country. School programs provide nutrition to 29.9 million children each day, which includes 21.2 million free school lunches and 0.8 million lunches at a reduced price. The new DGA revises individual school nutrition programs, affecting food purchasing and preparation and potentially straining already underfunded public school systems. For example, in January 2026, Trump signed a congressional bill titled, “Whole Milk for Healthy Kids Act of 2025,” overturning Obama-era regulations that required schools to provide fat-free and low-fat milk and once again allowing schools to offer whole and 2% milk.

DGA revisions also affect the SNAP program, which supplies eligible low-income individuals and families with funds to purchase groceries, and 2023 USDA data shows that children comprised 39% of SNAP participants. SNAP is overseen at a federal level by the USDA but implemented by each state. Several states have introduced restrictions on SNAP benefits that reflect MAHA priorities; for example, the USDA approved a Texas-specific limitation on purchasing sugary beverages or candy using SNAP funds.

Additionally, in the first year of Trump’s second administration, two other significant events related to child health occurred with considerable implications. During the federal government shutdown in October and November 2025, people relying on SNAP to purchase groceries did not receive their funds, leaving children without nutritional support. Also, the OBBBA increases states’ portion of administrative costs for SNAP from 50/50 to 25/75 beginning in fiscal year 2027 and also includes a state-level quality-control disincentive of up to 15% of total funds based on the state’s payment error rate, which effectively raises SNAP expenses for states.

Conclusion

The first year of Trump’s second administration saw significant changes to federal policies that affect individual and public health across the U.S. However, the full impact of these policy shifts will likely take years to fully identify.

Overall, the Center for Health Policy anticipates the following results: 

• Federal funding reductions are expected to affect medical coverage and public health support across populations.
• Price transparency policies may create pathways to lower healthcare costs.
• Changes to child health priorities and guidelines may have implications across medical and non-medical spaces.
• Restructuring efforts within federal health organizations may, at time, create tension with stated policy priorities, including efforts to reduce overdose deaths.

Taken together, these developments underscore the extent to which federal policy changes can shape healthcare access, public health infrastructure, and administrative priorities across the U.S. health system.

This publication was produced by Rice University’s Baker Institute for Public Policy. Wherever feasible, the material was reviewed by outside experts prior to release. Any errors or omissions are solely the responsibility of the author(s).

This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the author(s) and Rice University’s Baker Institute for Public Policy. The views expressed herein are those of the individual author(s) and do not necessarily represent the views of Rice University’s Baker Institute for Public Policy.