A new Congress, a new healthcare policy landscape
The 2026 midterm elections will reshape the healthcare policy debate. Beginning in January 2027, Democrats will control both the House and Senate, while President Trump remains in office. That combination will shift the debate on how to address healthcare affordability and access, prescription drug costs, and other priorities. While there was much discussion of healthcare reform in the lead-up to the elections, making major changes will be challenging as the newly Democratic-controlled Congress faces the President’s veto power.
For employers, the key question is whether lawmakers can advance reforms that reduce costs without adding new benefit mandates, administrative requirements or other obligations that increase the cost and complexity of sponsoring a health plan or limit employers’ flexibility to support the health of workers and their family members. Now is the time for employers to engage in the debate. Although Democrats may be able to enact only incremental changes, the next two years are expected to set the stage for the 2028 presidential election and what some expect to be a pivotal year for health policy in 2029.
What to expect from the 120th Congress
While it may be possible for Democrats to advance many of their priorities in a party-line vote requiring only 51 votes under the budget reconciliation process — such as reviving the now-expired expanded ACA subsidies and rolling back some of the Medicaid cuts — President Trump’s veto pen could be a major barrier. Moreover, the rules governing the reconciliation process would prohibit most commercial market and employer-focused policies from being included in a budget reconciliation bill, thus necessitating 60 votes to overcome a filibuster.
From an employer perspective, the ACA and Medicare changes, if enacted, could reduce some of the enrollment that might otherwise move to employer-sponsored health plans, as well as cost-shifting from providers, although those costs are difficult to quantify. Further, the Medicaid cuts are fueling some states’ interest in requiring large employers whose employees are enrolled in Medicaid to contribute toward their state's Medicaid costs.
Beyond those two priorities, Democrats have spent part of this year gathering ideas for a healthcare policy agenda, but they do not yet have a unified platform. In addition, they will need to assimilate with newly-elected members of Congress. Moderates and progressives are advancing a broad range of proposals, some of which overlap with Republican interest in addressing healthcare affordability.
For employers, the central policy tension will be between structural reforms that could lower costs, such as new rules on price negotiation and PBM structure, and new benefit mandates, administrative requirements, and the continuation of the flawed No Surprises Act independent dispute resolution process, all of which are significantly increasing costs. The extent to which Democrats prioritize cost-reducing structural reforms — and whether those proposals continue to attract bipartisan support — will be especially important for employers during the 120th Congress.
The great debate about Medicare for all
Major reform is hard. It’s telling that policymakers have been talking about a single-payer healthcare system since the 1970s. Passing the ACA — a far cry from a single-payer system — was a major milestone in health policy history, following countless proposals over the years leading up to it and immediately subjected to many attempts to repeal or replace it. Consensus-building on major health reform will continue to be challenging across the spectrum of views on healthcare in Congress. While 123 incumbent House Democrats previously co-sponsored Medicare for All legislation, even with support from some of the newly elected members, they are still a long way from converting members of their caucus who are not supportive of a single-payer system.
In addition, many other stakeholders will have a voice in the debate. Millions of dollars are spent on healthcare lobbying each year by a range of influential organizations. While many voters may feel the current healthcare system needs reform, they will also be concerned about the impact of such a big change, both on their access to care, quality of care and on their taxes. Finally, employers know how important health benefits are to their employees, and they have their own advocacy groups working in Washington, D.C. to ensure their shared interests are considered.
The policy debate extends beyond Washington
Federal policy will not be the only source of change for employers. State election results may also influence the benefits landscape in 2027 and beyond. These developments could lead to more states adopting paid-leave laws, more coverage mandates and a new round of PBM restrictions, among other things. On the paid-leave front, we will be paying particular attention to Arizona, Michigan, Pennsylvania, Texas and Wisconsin.
Employers have a role
For employer health plan sponsors, the 2026 election is best understood as a shift in the direction and intensity of the health policy debate. Employers should prepare for greater policy attention to affordability, prescription drug costs, behavioral health and coverage access. Indeed, the ongoing role of private insurance in the US healthcare system and how it interacts with the public system will be part of the debate.
Now is the time for employers to share the value they bring to millions of American workers as it relates to health care affordability, access to care and making benefits easy to navigate. We look forward to advocating for employers' interests and showcasing the value they bring to American workers — whatever comes next.
For a closer look at the 2027 congressional benefits agenda, join Geoff Manville, Government Relations Leader, and other Law & Policy Group experts for the November 12 Washington Update Briefing. The 90-minute webinar will cover legislative priorities, lame-duck proposals and the latest developments affecting employer-sponsored health and retirement plans.
