2026 Midterm Elections: Healthcare Policy Outlook for 2027 and Beyond

The 2026 midterm elections will determine the congressional environment in which healthcare policy develops during the final two years of the Trump Administration. The most consequential variable may not be whether the underlying direction of healthcare policy changes but rather who controls the congressional agenda, oversight gavel and legislative vehicles available to shape it.

The elections are unfolding against a challenging national political environment for Republicans, with President Donald Trump's approval ratings in the mid-30s and the president's party historically facing losses in midterm elections. At the same time, control of the U.S. Congress remains highly contested. Republicans hold narrow majorities in both chambers: 218-214 in the U.S. House of Representatives and 53-47 in the U.S. Senate. Races for currently vacant seats, as well as open seats created by retirements and other departures, are contributing to a competitive electoral landscape nationwide. The result is an electoral environment in which relatively small shifts could materially change congressional control – and with it, the healthcare policymaking environment in 2027.

A Democratic House – or Democratic control of Congress – would substantially increase oversight of the administration and healthcare industry, elevate healthcare affordability and coverage as political priorities, and make appropriations and other must-pass legislation the principal vehicles for shaping policy. Continued Republican control would give the administration considerably more room to implement the One Big Beautiful Bill Act (H.R. 1), pursue its deregulatory and consumer-directed healthcare agenda, and advance policies around program integrity, transparency and competition.

Yet, important policy pressures will persist under either outcome. Healthcare affordability, drug pricing, fraud and program integrity, transparency, vertical consolidation, and the growing use of executive and administrative action are becoming structural features of the healthcare policy environment rather than purely partisan issues.

The outcome of the midterm elections will also shape the year-end legislative session, when Congress reconvenes to fund the federal government beyond the current funding expiration on December 11, 2026, and address multiple healthcare "extender" policies that expire before the new year, among other things.

Election Scenarios

Potential Outcome: Democratic House, Republican Senate

The most significant immediate change after the midterms would come from Democratic control of the House, even if Republicans retain a Senate majority.

A Democratic House would immediately change the congressional oversight environment. Committee chairs would gain subpoena, investigative and hearing authority, giving Democrats far greater ability and legal levers to scrutinize Trump Administration healthcare policies and the industries affected by them and pursue investigations into administration activities from the first two years of the president's term.

Several areas are particularly likely to receive attention:

• Most-Favored-Nation (MFN) and Pharmaceutical Agreements. Democratic health committee leaders have already sought information regarding the administration's MFN agreements with pharmaceutical manufacturers, sending letters to chief executives of various manufacturers whose agreements have been formally announced by the company or administration. Democratic committee control would give those inquiries considerably more force. Hearings could examine the terms of individual agreements, their legal authorities, manufacturer commitments and exemptions, and the relationship between negotiated agreements and subsequent Centers for Medicare & Medicaid Services (CMS) and – to a certain extent – U.S. Food and Drug Administration (FDA) policy, particularly for manufacturers who entered into drug pricing agreements and subsequently received a Commissioner's National Priority Voucher (CNPV) to speed FDA product review.
• Vaccines and Public Health. Expect sustained scrutiny of U.S. Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr., as well as changes to the Advisory Committee on Immunization Practices (ACIP), childhood vaccine schedule, and federal responses to measles and other outbreaks, along with potential changes involving the U.S. Preventive Services Task Force (USPSTF). These issues would provide Democrats a high-profile opportunity to contrast their public health priorities with the administration's Make America Healthy Again (MAHA) agenda. House Committee on Oversight and Government Reform Ranking Member Robert Garcia's (D-Calif.) professional staff previously issued a report outlining potential oversight focus areas, including vaccine policy.
• Affordable Care Act (ACA) Coverage and Affordability. The expiration of enhanced premium tax credits is likely to remain a major Democratic policy and messaging priority. Restoring or redesigning the subsidies could become both an immediate affordability proposal and an important component of the party's healthcare agenda heading into 2028. Broader proposals addressing premiums, deductibles, enrollment and insurer practices are also likely to receive attention. However, if the Senate remains in Republican control, policies restoring the enhanced premium tax credits will become more difficult.
• H.R. 1 Implementation. Medicaid community engagement requirements, provider taxes, state-directed payments and eligibility changes are likely to receive particular scrutiny as implementation of H.R. 1 proceeds in 2027 and beyond. Outright repeal of any provisions from H.R. 1 would be difficult, but implementation challenges could generate pressure for targeted delays, appropriations restrictions or additional regulatory flexibility.
• Medicare and Medicare Advantage (MA). MA plans are likely to face continued scrutiny around payment, prior authorization, supplemental benefits, encounter data and Star Ratings. Democratic committee control would increase oversight of plan practices and payment, while bipartisan interest in prior authorization and transparency could continue to generate legislation. Traditional Medicare affordability could also become more prominent, including proposals to limit beneficiary out-of-pocket exposure.
• Healthcare Consolidation and Industry Practices. A Democratic House would likely increase scrutiny of private equity investment, vertical integration, hospital and physician consolidation, insurer practices and other healthcare transactions. With major structural legislation facing obstacles in a Republican Senate, much of that activity would likely occur through hearings, investigations and requests for information.

The result would be a healthcare environment characterized less by sweeping new legislation than by investigations, implementation fights and battles over the administration's use of executive authority.

Potential Outcome: Democratic House and Senate – A More Active Legislative Agenda

If Democrats capture both chambers, the dynamic would become more consequential. Democrats would control the committee and floor agendas in both chambers, as well as the Senate confirmation process, giving them greater flexibility to stall progress on administration priorities or halt nomination processes. President Trump's veto authority, however, would still constrain the advancement of major partisan legislation, making a wholesale reversal of the administration's healthcare agenda unlikely. But Democrats would have substantially greater leverage over appropriations, FDA user-fee reauthorization and other must-pass legislation.

Affordability would likely anchor that agenda. Enhanced ACA premium tax credits, Medicare beneficiary costs and broader coverage policy would receive renewed attention. Senate Democrats are already developing proposals to address prescription drug pricing, premiums and deductibles, coverage options, insurer practices and healthcare consolidation.

• Drug Pricing Would Be Particularly Active. Democrats would likely pursue expansion of the Medicare Drug Price Negotiation Program, extending out-of-pocket caps to private insurance, lowering patient out-of-pocket spending and furthering additional pharmacy benefit manager (PBM) reforms. At the same time, Democratic committee leaders are already scrutinizing the administration's MFN agreements, creating a potentially unusual dynamic in which Democrats could investigate the agreements while Congress considers whether to modify or codify elements of the broader MFN framework.
• Healthcare Industry Oversight Would Also Intensify. MA, hospital and health system consolidation, private equity, insurer and PBM practices, prior authorization and healthcare transactions could all become targets of committee scrutiny. Unlike under divided government, control of both chambers would give Democrats greater opportunity to translate that oversight into legislation addressing affordability, transparency and competition.
• H.R. 1 Would Become an Implementation Fight Rather Than a Straightforward Repeal Effort. Medicaid work requirements, provider taxes, state-directed payments and eligibility provisions could become targets for oversight, implementation delays, regulatory flexibility and appropriations restrictions. With a Republican President, however, significant statutory rollback would remain difficult.

A Democratic Congress, therefore, would not necessarily mean a wholesale change in federal healthcare policy. Instead, it would give Congress significantly more leverage over how existing policies are implemented while creating more opportunities to advance targeted Democratic priorities through bipartisan or must-pass legislation.

Potential Outcome: Republicans Maintain Majorities in House and Senate

Continued Republican control of Congress would produce a substantially different institutional environment.

Rather than congressional oversight serving as the principal check on administration policy, Republican control would give the White House and federal agencies additional runway to implement H.R. 1 and continue the broader healthcare agenda already underway.

Congressional attention would likely center on implementation, program integrity, transparency, deregulation and consumer-directed healthcare. Republicans are likely to continue exploring health savings accounts (HSAs), Individual Coverage Health Reimbursement Arrangements (ICHRAs), direct primary care and other alternative coverage structures while supporting administration efforts to reduce regulatory burden and reshape federal healthcare programs.

At the same time, Republican control would not eliminate significant political pressure around healthcare affordability. Medicaid changes and the expiration of enhanced ACA subsidies could increase coverage disruption and uncompensated care, placing pressure on lawmakers – particularly those representing competitive districts or rural communities – to respond to emerging access and affordability concerns.

• Drug Pricing Would Remain Highly Active. President Trump has substantial political ownership of MFN, and the administration's direct agreements with pharmaceutical manufacturers suggest that international reference pricing is evolving from a discrete pricing initiative into a broader policy framework encompassing Medicaid pricing, future launches, domestic manufacturing and other administration priorities. Republican control would provide greater latitude to implement that approach and potentially seek congressional codification of elements the administration wants to endure beyond 2028.
• PBM and 340B Reform Are Also Likely to Remain Active Regardless of Congressional Control. PBM transparency and business practices have attracted bipartisan scrutiny, while the 340B Drug Pricing Program continues to draw attention over program integrity, data, reimbursement and the evolving rebate model. These issues could move through bipartisan legislation or administrative action even in an otherwise divided healthcare environment.
• Fraud, Waste and Abuse Would Remain a Central Priority. The administration's deregulatory agenda should not be interpreted as a retreat from enforcement. Home health, hospice, durable medical equipment (DME), molecular diagnostics and Medicaid program integrity are likely to remain areas of particular focus, supported by increased use of data analytics and interagency enforcement.
• MA, Transparency and Competition Would Remain Prominent. Payment accuracy, risk adjustment, prior authorization, encounter data, supplemental benefits and plan transparency are likely to remain active MA issues, with a Republican Congress placing comparatively greater emphasis on program integrity, competition and regulatory burden. More broadly, hospital prices, site-neutral payment, PBMs, insurer practices, vertical integration and healthcare consolidation increasingly fit within a Republican consumer-affordability framework.

In short, Republican control would mean greater continuity with the administration's current policy direction – but not necessarily policy stability. The combination of deregulation, aggressive enforcement, executive action and direct negotiation with industry could continue to produce a fast-moving and sometimes unpredictable healthcare policy environment.

Bipartisan Legislative Vehicles and Policy Areas

Not every major healthcare issue in 2027 will divide neatly along partisan lines:

• FDA and Healthcare Innovation Will Be Particularly Important. FDA user-fee reauthorization will be one of the most significant must-pass healthcare vehicles in 2027. Four human medical product user fee programs – medical device, prescription drug, generic drug and biosimilar – expire on September 30, 2027, requiring Congress to enact legislation to allow the FDA to continue collecting user fees from regulated industries. Though the larger user fee process is underway as the FDA prepares to submit final commitment letters to Congress in January 2027, the broader user-fee package could provide a vehicle for policy reforms involving drug and device innovation, artificial intelligence (AI), review timelines, clinical trials, regulatory modernization, manufacturing and FDA oversight. Congress is also likely to continue examining the use of AI more broadly across healthcare delivery, including clinical decision support, documentation, data governance and federal oversight.
• PBM Reform, Transparency and Site-Neutral Payment Could Similarly Attract Support Across Party Lines. Though the scope and details of reforms would differ, concerns about healthcare costs, consolidation and opaque payment practices increasingly cross traditional partisan boundaries.
• No Surprises Act Reforms May Also Remain an Area of Bipartisan Activity. Congressional interest in the law's implementation has increased, with the Senate Committee on Health, Education, Labor, and Pensions, along with the House Committee on Energy and Commerce and Committee on Ways and Means, examining concerns involving the Independent Dispute Resolution (IDR) process, including potentially ineligible disputes, outlier payment determinations, IDR entity transparency and accountability, and delays in insurer payments following finalized awards. Though the ultimate scope of any package remains uncertain, the No Surprises Act Enforcement Act or another healthcare legislative vehicle could provide an opportunity for targeted reforms.
• Prior Authorization and Healthcare Interoperability Are Also Likely to Remain Bipartisan Priorities. Congress has demonstrated sustained interest in reducing administrative burden and improving electronic health information exchange, while CMS continues implementing interoperability and prior authorization requirements. Legislative activity could build on those efforts where lawmakers identify implementation gaps or opportunities to further reduce provider burden.
• Post-Acute Care Will Continue to Evolve Largely Through CMS. Potential changes to payment systems for skilled nursing facilities, inpatient rehabilitation facilities and other post-acute providers, along with continued home health and hospice payment and program-integrity activity, may proceed through annual rulemaking regardless of congressional control.

What Does Not Change: 6 Structural Healthcare Trends

The election will determine who controls the policy levers, but several larger forces are likely to shape healthcare regardless of the outcome:

1. Coverage and Affordability Pressures Will Intensify. Premiums, out-of-pocket costs, Medicaid implementation and coverage disruption will keep healthcare affordability politically salient regardless of which party controls Congress.
2. Drug Pricing Is Becoming an Ecosystem of Overlapping Federal Interventions. MFN, Medicare negotiation, PBM reform, 340B reform, manufacturer agreements and other pricing initiatives are increasingly operating simultaneously rather than as isolated policies.
3. Deregulation Will Coexist with Aggressive Program-Integrity Enforcement. Reduced regulatory burden does not necessarily mean reduced oversight, particularly for home health, hospice, DME, molecular diagnostics and Medicaid.
4. Transparency, Site-Neutral Payment and Vertical Integration Will Remain Bipartisan Pressure Points. The political framing may differ, but hospital pricing, insurer and PBM practices, consolidation and differences in payment across sites of care will continue to attract congressional and administrative attention.
5. FDA and Healthcare Innovation Will Have a Major Legislative Vehicle in 2027. Medical Device User Fee Amendments, Prescription Drug User Fee Act, Generic Drug User Fee Amendments and Biosimilar User Fee Amendments expire in September 2027, creating a must-pass vehicle that could attract broader drug, device, innovation and FDA policy reforms.
6. Federal Healthcare Policymaking Will Increasingly Occur Outside Traditional Legislation. Executive actions, manufacturer agreements, waivers, demonstrations and annual rulemaking are playing a larger role alongside traditional legislation, making healthcare policy more fluid – and less dependent on Congress alone.

Post-Election "Lame-Duck" Legislative Outlook

After the midterm elections and before the 120th Congress convenes on January 3, 2027, Congress will return to Washington, D.C., for a year-end legislative session with a to-do list that includes funding the federal government for fiscal year 2027 and addressing multiple expiring healthcare "extenders." By way of background, on September 2, 2026, President Trump signed a continuing resolution (CR) to extend government funding through December 11, 2026. Notably, the CR also prevents the Office of Management and Budget (OMB) from finalizing or implementing the Federal Financial Assistance proposed rule through December 11, 2026.

Congress may take one of several possible paths to fund the federal government after the December 11 deadline, including:

• passing another short-term CR to push the funding deadline into January or beyond
• negotiating a large omnibus or set of "minibus" packages that bundle some or all of the 12 annual appropriations bills into full-year legislation
• allowing a partial government shutdown if negotiations break down

These deliberations will be shaped by the outcome of the midterm elections. If Democrats retake either chamber, they may be less inclined to negotiate a large omnibus package and prefer instead to pass another short-term CR and negotiate from a stronger position in the new Congress. If Republicans retain control, they may prefer to pass a longer-term appropriations package.

Regarding the temporary pause on implementation of the OMB Federal Financial Assistance proposed rule, any extension will be tied to the year-end funding negotiations. Congress may decide to 1) extend the restriction through another CR, 2) include a longer prohibition in final appropriations language or 3) impose substantive limitations on particular provisions of the proposed rule.

Healthcare extenders are temporary Medicare, Medicaid, public health and other healthcare authorities that Congress periodically renews, often through larger must-pass appropriations measures or CRs. Although expiration of an authorization does not always immediately interrupt program funding or operations, Congress must periodically determine whether to extend, modify or allow these policies to lapse.

The healthcare extenders expiring on or before December 31, 2026, affect many providers, including hospitals, physicians and labs and include:

• temporary 2.5 percent payment increase under the Medicare Physician Fee Schedule
• advanced alternative payment model bonus
• Community Health Center funding
• National Health Service Corps funding
• Special Diabetes Programs for Type I and Indians
• Low Volume Hospital Payment Adjustment
• Medicare-Dependent Hospital Program
• Geographic Practice Cost Indices floor
• Pandemic and All-Hazards Preparedness and Response Act reauthorization
• Clinical Laboratory Fee Schedule payment cut delay

Congress will most likely address the expiring healthcare extenders as part of the legislative vehicle it uses to fund the government after December 11. Historically, health extenders have been bundled into must-pass year-end spending packages and renewed repeatedly on a short-term basis rather than receiving multiyear reauthorizations. Congress is likely to follow that pattern again as it faces pressure to address the looming physician pay cuts and potential disruptions to safety net providers. However, whether Congress passes a short-term extension or includes lengthier appropriations and reforms will be shaped by the midterm election outcome and broader negotiations around a CR or an omnibus or a minibus package.

Holland & Knight Can Help

Holland & Knight's Healthcare Policy Team will continue to monitor developments and share additional analysis leading up to the midterm elections. If you have any questions about the potential impact to your business, contact the authors or another member of the team.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.