03 February 2025

This Week in Health Policy for February 3

This Week (February 3 - 7)

This week, the House and Senate are in session and a Senate Finance Committee vote on Mr. Kennedy's nomination for HHS Secretary could come as early as this week, though no vote has been scheduled yet. The Trump administration this week announced new tariffs on Canada and Mexico, which may have implications for health care and life science supply chains and manufacturing.

House Energy & Commerce Health Subcommittee will hold a hearing on "Combatting Existing and Emerging Illicit Drug Threats."

  • Date: Thursday, February 6, at 10am ET
  • More information available here.

Last Week (January 27 - 31)

Health Care Highlights

White House issues, rescinds memo freezing federal financial assistance. On Monday (January 27), the White House Office of Management and Budget issued a memorandum directing federal departments and agencies to "temporarily pause all activities related to obligation or disbursement of all Federal financial assistance" to ensure funding is consistent with President Trump's executive orders, including those related to DEI programs, gender, and bans on federal abortion funding. While the memo stated that Medicare and Social Security were excluded, it prompted widespread confusion over the scope of the freeze, with Sen. Ron Wyden (D-OR), ranking member of the Senate Finance Committee, reporting that state Medicaid portals were down following the memo's release.

In response to the outcry, OMB on Tuesday (January 28) issued a Q&A, which states that the freeze does not apply to "direct benefits to individuals," such as student loans and mandatory programs like Social Security, Medicare, Medicaid and SNAP. The Q&A also states, "Funds for small businesses, farmers, Pell grants, Head Start, rental assistance, and other similar programs will not be paused." Instead, it directs federal agencies who believe these programs may be operating in conflict with the executive orders to consult with OMB on how best to wind down the programs "without a pause in the payments." Later that day, a federal district judge temporarily blocked enforcement before the memo took effect at 5:00pm ET and the White House on Wednesday (January 29) rescinded the memo. However, the implications for organizations receiving federal grants and funding remain unclear. White House Press Secretary Karoline Leavitt in a post on X said, "This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court's injunction. The President's EO's on federal funding remain in full force and effect and will be rigorously implemented." It is possible additional legal action could occur. Organizations that receive federal funding, including federal health research grants, may wish to conduct their own internal reviews of federal funding and identify grants or other funds that may fall within the targeted areas, including foreign aid, abortion care, DEI, gender ideology, and energy.

President Trump issues additional EOs, executive actions impacting health. This week, President Trump signed a new wave of executive orders and memorandums providing additional insight into the administration's policy priorities on:

  • The Hyde Amendment. Late Friday (January 24), President Trump directed OMB to issue guidance ensuring that agencies comply with the Hyde Amendment, which prohibits federal funding for abortion.
  • Mexico City Policy. Late Friday (January 24), President Trump signed a memorandum that reinstates the so-called Mexico City policy that bars foreign organizations that receive US federal funding from providing or promoting abortion care. The policy has historically been revoked by Democratic presidents and reinstated by Republican presidents.
  • Gender-affirming care for children. On Tuesday (January 28), President Trump signed an EO that states federal agencies shall not "fund, sponsor, promote, assist, or support the so-called 'transition' of a child from one sex to another." The EO defines a child as an individual under 19 years of age, and it defines "chemical and surgical mutilation" to include a range of services and treatments, including certain uses of puberty blockers, sex hormones, and surgical procedures. The EO directs all agencies to rescind guidance based on the World Professional Association for Transgender Health (WPATH). The EO also directs HHS to publish a list of existing literature on best practices for promoting the health of children who "assert" some form of gender or identity-based confusion within 90 days, ensure medical and research institutions receiving federal funds end medication and surgical treatments for children, and take steps, such as updating Medicare or Medicaid conditions of participation or conditions for coverage, to end medication and surgical treatments for children related to gender or identity-based confusion.
  • Reinstates service members discharged under the DOD's COVID-19 mandate. On Monday (January 27), President Trump signed an EO that directs the Department of Defense and Department of Homeland Security to create pathways to reinstatement for service members who were discharged solely for refusing to get the COVID-19 vaccine.

Deferred resignation offers for federal workers. On Tuesday (January 28), the Office of Personnel Management sent an email to federal employees offering a deferred resignation for any who wish to resign following President Trump's EOs ending telework and making other changes to federal staff. The offer states that employees who accept will receive pay and benefits through September 30. The government also issued an FAQ with additional details.

CMS statement on drug price negotiation. On Wednesday (January 29), the Centers for Medicare and Medicaid Services (CMS) issued a statement on lowering the cost of prescription drugs and the Inflation Reduction Act's drug price negotiation program. The statement says, "As the second cycle begins under the Trump Administration, CMS is committed to incorporating lessons learned to date from the program and to considering opportunities to bring greater transparency in the Negotiation Program. CMS intends to provide opportunities for stakeholders to provide specific ideas to improve the Negotiation Program."

CMS issues notice of intent to collect information on state Medicaid demonstrations. On Thursday (January 30), the Centers for Medicare and Medicaid Services (CMS) published a notice of its intent to extend existing authority to collect information on states' compliance with the regulatory and statutory requirements of their Medicaid 1115 demonstration waivers. Comments on the proposed information collection are due within 30 days of the notice being published in the Federal Register.

State Department freezes global health aid. On Sunday (January 26),the State Department announced it has paused "all U.S. foreign assistance funded by or through the State Department and U.S. Agency for International Development (USAID) for review" in compliance with President Trump's EO on foreign aid.

Hearings, Markups, and Other Committee Activity

Senate Finance Committee and Senate Health, Education, Labor and Pensions Committees held confirmation hearings to consider the nomination of Robert F. Kennedy Jr. to be Health and Human Services Secretary. This week, the Committees heard testimony from Robert F. Kennedy, Jr., President Trump's nominee to serve as Health and Human Services Secretary. During the hearings, most Republicans voiced confidence in Mr. Kennedy and his Senate confirmation, while many Democrats questioned whether Mr. Kennedy was the right candidate to lead HHS. Senate HELP Committee Chairman Bill Cassidy (R-LA) said he was "struggling" with the nomination over Mr. Kennedy's statements on vaccines. The dominant themes throughout the hearings were addressing chronic conditions through improved diet and Mr. Kennedy's position on vaccines. Click here for a comprehensive overview of the Senate Finance Committee hearing. See attached WCEY alert for a comprehensive overview of the Senate HELP Committee hearing.

  • More information available here.
  • More information available here.

Senate Aging Committee held a hearing on "Making Washington Work for Seniors: Fighting to End Inflation and Achieve Fiscal Sanity." On Wednesday (January 29), the Committee heard from a panel of economic and Social Security experts and advocates on ways inflation has negatively impacted seniors. The wide ranging discussion included Medicaid, high prescription drug costs, and the Inflation Reduction Act (IRA).

  • More information available here.

Senate Veterans' Affairs Committee held a hearing on "Protecting Veteran Choice: Examining VA's Community Care Program." On Tuesday (January 28), the Committee heard testimony from veterans, family members, and experts about how veterans face barriers to accessing timely mental health and health care services through the Community Care program.

  • More information available here.

Senate Judiciary Committee leaders inquire into inspector general dismissals. On Tuesday (January 28), Senate Judiciary Committee Chairman Chuck Grassley (R-IA) and Ranking Member Dick Durbin (D-IL) asked the White House to provide a rationale behind the recent decision to dismiss Inspectors General (IGs) from 18 offices, including the Department of Health and Human Services, who is serving as acting IG in the meantime, and plans to fill the vacant positions.

  • More information available here.
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Attachment

HELP Committee HHS hearing

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Contact Information

For additional information concerning this Alert, please contact:

Washington Council Ernst & Young

Document ID: 2025-0385