Policy Failures, Not Fate: Inside 2025’s Health-Care Unraveling

As 2025 draws to a close, the American healthcare safety net finds itself fraying at multiple seams simultaneously. The enhanced Affordable Care Act (ACA) premium tax credits are set to expire on December 31, threatening to more than double out-of-pocket premiums for 24 million Americans. HIV care infrastructure has been deteriorating for months through administrative obstruction, and new data shows progress on ending the epidemic has stalled. State-level drug pricing experiments continue advancing on unsound foundations while federal policy casts an uncertain shadow over pharmaceutical access.

These crises share a common thread: they result from policy choices, not external forces. The Kaiser Family Foundation (KFF) estimates that average ACA out-of-pocket premium payments will increase by 114% if enhanced subsidies expire. New York City's latest surveillance data shows HIV diagnoses rising for the fourth consecutive year. The interconnected nature of these programs means each failure amplifies the others, and the decisions Congress makes in the coming days, and how states respond in the coming months, will determine whether 2026 brings stabilization or acceleration of these access crises.

The ACA Subsidy Showdown

As of this writing, the Senate is scheduled to vote on Thursday, December 11th, on the future of enhanced premium tax credits, and according to Politico, “all proposals appear doomed.” Senate Minority Leader, Chuck Schumer, announced Democrats will push a “clean” three-year extension: "This is the bill, a clean three-year extension of ACA tax credits, that Democrats will bring to the floor of the Senate for a vote next Thursday, and every single Democrat will support it. Republicans have one week to decide where they stand."

The measure requires 60 votes to overcome a filibuster, meaning 13 Republicans would need to cross the aisle. That support is not expected to materialize, as Republicans remain fractured between those who prefer inaction, those insisting on conservative overhaul, and those worried about the political consequences of rising premiums amid the quickly coming midterm fights.

President Trump was poised to release a framework last month extending the subsidies temporarily with income caps at 700% of the federal poverty level and minimum premium requirements. He backed down after some Republican lawmakers insisted any extension restrict ACA plans from covering abortions and include more conservative changes. Majority Leader John Thune acknowledged the abortion issue is "a difficult and challenging one on both sides." The Hydr amendment already forbids federal funds being used to subsidize abortions.

Several competing Republican proposals have emerged, though each carries significant implications for cost and access. Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Bill Cassidy (R-La.) wants to redirect enhanced subsidies to health savings accounts tied to bronze-level plans with higher deductibles. The approach would shift costs from premiums to out-of-pocket expenses rather than reduce them, and HSA rules, as they currently stand, prohibit using funds to pay premiums. For people with chronic or complex health conditions requiring consistent care, high-deductible plans create significant barriers: annual HIV medication costs alone range from $36,000 to $48,000, and KFF research shows each $1,000 increase in out-of-pocket costs correlates with decreased medication adherence.

Sen. Rick Scott (R-Fla.) has proposed "Trump Health Freedom Accounts" that could be used to pay premiums, though funding levels and eligibility thresholds remain unclear. Sen. Josh Hawley (R-Mo.) has floated allowing people to deduct up to $25,000 in medical expenses from their taxes, but as a deduction rather than a credit, this approach disproportionately benefits higher earners and does nothing at the point of purchase for people who cannot afford premiums upfront.

Neither of these proposals address the systemic issues driving up the costs of premiums, like pharmacy benefit managers (PBMs) vertically integrated with their own solely owned pharmacies or the plan that are supposedly contracting with them. Directly, PBMs are setting their own prices to justify higher costs across the board with limited to no transparency or accountability. Changing which hands money comes from would not change this dynamic but it could potentially make it harder to track the source of these cost pressures.

A bipartisan group of 35 House members released a two-year extension proposal retaining enhanced subsidies for people earning up to 600% of the poverty level, with reduced amounts up to ten times the poverty level. But only about 15 Republicans have signed on, far short of the majority-of-the-majority threshold typically required for leadership to allow a floor vote. "I have 40,000 people in my district who rely on this health care and doing nothing to prevent a spike in their premiums is wrong," said Rep. Jen Kiggans (R-Va.), who won reelection last year by less than four percentage points.

The real-world consequences are already materializing. Blue Cross Blue Shield of Michigan reports a 20% spike in call center volume from members facing premium increases. KFF polling found that 58% of ACA enrollees said they couldn't afford a $300 annual increase without significant disruption to their household finances. Yet 72% of Republican ACA enrollees favor extending the enhanced subsidies, as do the same share of MAGA supporters with marketplace coverage.

HIV Programs: Rising Cases Meet Proposed Cuts

As we documented in November, the HIV care system experienced systematic disruption throughout 2025 through administrative obstruction and funding delays, independent of any congressional budget action. The question now is what 2026 holds, and early signals are troubling.

New York City's annual HIV surveillance report, released last week, showed 1,791 new HIV diagnoses in 2024, representing a 5.4% increase from 2023. This follows a 6.9% increase from 2022 to 2023, meaning new diagnoses have increased or remained stable for four consecutive years. Acting Health Commissioner Dr. Michelle Morse noted that "this progress has stalled as new diagnoses have increased or remained stable for the fourth year in a row while lifesaving federal funding for ending the epidemic is in jeopardy."

The federal threat is concrete: New York City would lose more than $41 million for HIV research, treatment, education and services if the proposed closure of the Centers for Disease Control and Prevention's (CDC) Division of HIV Prevention is approved. Nationally, the House Appropriations Committee's FY2026 bill would eliminate approximately $1 billion in CDC HIV prevention funding and cut the Ryan White HIV/AIDS Program by $525 million.

Members of the Presidential Advisory Council on HIV and AIDS (PACHA) released a letter last week urging the White House and Congress to protect funding, warning that "without continued investment, progress toward ending the HIV epidemic will stall, cases will increase again, and the health of Americans will suffer." Multiple PACHA members told ABC News the council has not met this year, raising questions about its ability to carry out its advisory role. The White House dismissed the council as "a largely symbolic body" engaged in "another useless PR exercise."

The NYC data underscores who bears the consequences of policy failures: 86% of people newly diagnosed with HIV in 2024 were Black or Latino, with 42% living in high-poverty neighborhoods. Among those interviewed by the health department, 48% lacked health insurance.

340B and PBM Reform: Rare Bipartisan Ground

Amid partisan gridlock on coverage questions, 340B Drug Pricing Program and pharmacy benefit manager (PBM) reform showed rare bipartisan momentum in 2025. The October HELP Committee hearing on 340B produced unusual agreement across party lines, with Chairman Cassidy noting that "340B should be about making drugs more affordable, not a line item on an investor call."

CBO's September 2025 analysis confirmed what patient advocates have argued for years: the program expanded 565% from $6.6 billion in 2010 to $43.9 billion in 2021, with two-thirds of this growth stemming from covered entity and third-party behaviors rather than pharmaceutical price inflation. The recently reintroduced 340B ACCESS Act represents the first comprehensive federal response to these documented abuses.

CANN's Director of 340B Policy Kalvin Pugh anticipates reform momentum will continue: "Next year begins several HRSA changes to 340B. I anticipate continued movement in Congress to try to realign the now second largest drug discount program to its original intent. I also anticipate continued efforts on the state level as large hospital systems and other margin motivated players will look for other ways to extract value from 340B."

On PBMs, the Federal Trade Commission's January 2025 interim staff report documented that PBM-affiliated pharmacies extracted over $7.3 billion in revenue above estimated acquisition costs on 51 specialty generic drugs between 2017-2022. The report's unanimous approval by FTC commissioners reflected the undeniable nature of these practices, yet the failure to enact meaningful federal PBM reform demonstrated that industry lobbying power remains formidable.

Support for these reforms has existed for some years and has been growing but has thus far stalled. How much these reforms will remain prioritized in a midterm election year, again, remains a question.

State Experiments and Federal Shadows

State Prescription Drug Affordability Boards (PDABs) continued their problematic trajectory in 2025. Colorado and Maryland, the two states furthest along in setting Upper Payment Limits (UPLs), are basing their limits on federal Maximum Fair Price (MFP) without conducting thorough cost-benefit analyses or assessing potential adverse system outcomes.

CANN's Drug Pricing Policy Director Ranier Simons offered a pointed assessment: "As 2025 comes to a close, PDABs remain expensive experiments built upon unsound foundations with nebulous projections of incalculable benefits. As state PDABs and other entities lean into equally untenable federal actions the outlook for positive change in 2026 is not promising."

Simons additionally warned that while the appetite for PDABs may be fading, it is likely to be replaced by legislative bully behavior or legislatures attempting to pass direct MFP bills, foregoing the facade of the Boards themselves.

The federal Most Favored Nation (MFN) executive order signed in May 2025 has since evolved into TrumpRx, a direct-to-consumer website set to launch in 2026. The administration has announced deals with five manufacturers, including Pfizer, AstraZeneca, and Novo Nordisk, touting discounts averaging 50% and reaching as high as 85%. The framing as "MFN pricing" is generous. TrumpRx functions as a cash-pay portal where consumers bypass insurance to purchase directly from manufacturers. The 92% of Americans with health insurance likely won't benefit, since purchases don't count toward deductibles or out-of-pocket maximums, and insured consumers often pay less through their pharmacy benefit. I-MAK CEO Tahir Amin called it "political theater" that won't deliver "substantial savings for the government or patients," noting that pharmaceutical stocks rose after the announcements. The specific terms of manufacturer deals remain confidential, making it impossible to verify whether "MFN prices" for Medicaid will actually be lower than the rebated prices Medicaid already receives under existing federal law. Medicaid is already guaranteed the lowest market cost on medications under the “best price” rule.

As we analyzed in August, true MFN pricing tied to international benchmarks risks importing discriminatory QALY-based frameworks. TrumpRx sidesteps that concern by avoiding genuine price regulation altogether.

Utilization Management: The Quiet Expansion

While coverage debates dominate headlines, a less visible threat to medication access is accelerating: the expansion of utilization management (UM) tools by both public and private payers. The U.S. drug utilization management market reached $39.82 billion in 2024 and is projected to more than double to $82.07 billion by 2034.

The Inflation Reduction Act's Part D benefit redesign creates new incentives for expanded UM. With Part D plans now responsible for 60% of costs in the catastrophic phase (up from 15% in 2023), plans face financial pressure to restrict access through step therapy, fill limits, and prior authorization requirements. The Medicare Payment Advisory Commission found that Part D and Medicare Advantage plans now apply some form of utilization management to more than half of drugs on their formularies. In June, a coalition of 60 patient advocacy organizations wrote to CMS Administrator Dr. Mehmet Oz warning that "restrictive cost-control measures can delay or prevent beneficiaries from accessing necessary treatments."

CMS is currently engaged in investigations on Medicare Advantage Plans abusing UM practices to deny care. Because these abuses are so well-know, the agency's proposal to adopt these practices for traditional Medicare might seem hypocritical, if not foretelling.

Payers are increasingly deploying AI to automate these decisions. A Bain & Company survey found that approximately 80% of payers now have an AI strategy in place or in development, with prior authorization automation among the top use cases. Industry analysts frame this as reducing "administrative gridlock," but the concern for patients is that automation makes it easier to deny care at scale. A 2024 American Medical Association survey found that 93% of physicians reported prior authorization led to delays in necessary care, and 82% said the process can lead patients to abandon their recommended treatment. For people managing HIV, cancer, and other chronic conditions, automated denials represent a new front in the fight for treatment access that demands sustained advocacy attention in 2026.

The Crossroads of 2026

The policy decisions of the coming days will shape healthcare access for years. Lawmakers increasingly view January 30, the next government funding deadline, as the real cutoff for a healthcare deal if Thursday's vote fails. If ACA subsidies expire, KFF projects marketplace enrollment dropping from 22.8 million to 18.9 million in 2026 alone.

Looking further ahead, Medicaid work requirements under H.R. 1 take effect January 2027, requiring adults ages 19-64 to complete 80 hours monthly of approved activities to maintain coverage. Planning for that implementation begins now.

GOP strategist Jason Cabel Roe captured the political bind: "This is an issue we've been railing on for how many years? And now, all of a sudden, we have to deal with it, and there are no good proposals right now to get us out of this. If we don't fix it now, we risk letting Democrats fix it later, and we're not going to like that fix."

Whether Congress finds pragmatic solutions or continues partisan paralysis will determine whether 2026 brings relief or deepening crisis for the millions of Americans whose healthcare access hangs in the balance.