Here’s what conservatives want next after the ‘Big Beautiful Bill’

Modern Healthcare – Friday, August 22, 2025
By Michael McAuliff

The passage last month of President Donald Trump’s “Big Beautiful Bill” represents the biggest overhaul of the nation’s health system since the passage of the Affordable Care Act and probably the greatest rollback of federal healthcare spending in history.

But that doesn’t mean conservative groups who led the charge are done.

Indeed, there are major items that fell out of the tax-and-spending law many would very much like to continue pursuing, either through further legislation or executive actions.

Before the last presidential election, key groups on the right — including the Paragon Institute, the House Republican Study Committee, the House Budget Committee and the Heritage Foundation-led Project 2025 — put out sweeping proposals to remake healthcare. The initial menu of items House Republicans circulated at the start of the reconciliation process they used to pass the tax law included many of those suggestions, which would have wrought even bigger changes than what ultimately passed in the law Trump signed July 4.

Right-leaning think tankers see little chance the bigger proposals can advance, given the current political climate and ongoing backlash to the tax law. But that doesn’t mean they’ve been abandoned. More limited versions could still be on the table, especially if House Speaker Mike Johnson (R-La.) makes good on the suggestion to use the partisan reconciliation process again in the fall.

For now, the proposals that seem most likely to get traction are ones with some buy-in from Democrats: taking steps to curb costs in Medicare Advantage and imposing “site-neutral” payment rules on hospitals.

Targeting Medicare Advantage

Medicare Advantage is coming under increased scrutiny from the program’s longtime conservative champions because of high-profile reports about “upcoding,” when private Medicare plans submit more expensive diagnoses for patients to drive higher reimbursements from the federal government. Medicare Advantage companies have disputed these reports.

“That issue, I think is going to surface as a topic for legislative action,” said Robert Moffit, a senior research fellow at Heritage. “Medicare Advantage has become something in the spotlight. I think its payment system is on a knife-edge.”

Conservatives expect Democrats to be on board for changes, Paragon Institute President Brian Blase noted in a recent webinar with reporters, health policy experts and congressional staffers.

Blase and Moffit both have extensive ideas for how the Centers for Medicare and Medicaid Services can rework its approach to Medicare Advantage payments.

A leading contender for action, however, is a bill sponsored by Senate Health, Education, Labor and Pensions Committee Chair Dr. Bill Cassidy (R-La.) and ranking Budget Committee member Jeff Merkley (D-Ore.). The No UPCODE Act of 2025 would tighten how MA plans categorize illness and require risk adjustments to use two years of data instead of one when predicting how sick someone might be and what an insurer should get paid.

Still, Dr. Brian Miller, a fellow at the American Enterprise Institute, thought tackling the somewhat simpler issue of speeding prior authorization in Medicare Advantage was the most likely legislation to move. One such bipartisan bill, the Improving Seniors’ Timely Access to Care Act of 2025, has been introduced in both chambers of Congress.

Miller said bigger changes to the program, such as the ones in Cassidy and Merkley’s bill, would be “challenging.” Congress might find it difficult to target problems without harming poorer Medicare Advantage beneficiaries, for whom the program functions as a much cheaper version of regular or traditional Medicare combined with Medigap insurance, he said.

“There are things you can do to improve Medicare Advantage and reduce cost, but you have to be careful that you don’t take away the lower middle class and middle class retirees’ Medigap coverage,” Miller said.

Rolling out site-neutral Medicare pay

Implementing some version of site-neutral payment rules for hospitals is the other big bipartisan idea conservatives are watching.

The same service can cost Medicare more in reimbursements if it is done in a hospital-owned office, versus an independent doctor’s office. Hospitals justify the extra costs as necessary to support the greater infrastructure they bring to the table. But many conservatives increasingly see the price differential as unjustified and a driver of medical consolidation, because hospital systems can boost revenue by acquiring physicians’ offices.

“We shouldn’t pay one site more than another for the exact same service,” said Blase. “If you [require site neutrality], we can reduce both program cost and beneficiary cost sharing. We can also inject greater competition into healthcare.”

Some modest site-neutrality proposals have surfaced in Congress, including one — that nearly became law — that would have evened out the price for certain drug injections. More sweeping proposals were floated in the Senate for the tax bill, but ultimately were dropped. Hospital associations are adamantly opposed to such proposals.

The longer shots

One area that conservatives often raise but doesn’t have clear prospects in Congress is addressing the 340B drug discount program that hospitals serving poorer and rural populations use to get cheaper drugs and offset costs. Its use has expanded dramatically in recent years, growing from $6.6 billion in sales in 2010 to $66 billion in 2023, according to federal data.

HELP Chair Cassidy has been investigating the issue and other lawmakers have held hearings about it, but serious legislative ideas have yet to emerge.

Additionally, two aggressive changes to the Affordable Care Act’s marketplaces are still very much on the minds of many conservatives.

One that nearly made it into the tax law was funding what are known as cost-sharing reductions for insurers. The federal payments help insurers cover shortfalls if they face higher costs for benchmark silver plans. Funding the reductions would reduce silver plan premiums, but it would also lower the tax subsidies tied to them for beneficiaries.

Blase also pointed to rolling back the 90% match the federal government pays for the Medicaid population in 40 states that expanded eligibility under the law. The federal government pays 50% to 77% percent of Medicaid costs for Medicaid enrollees who are not in the expansion population.

It would be a hard sell in a Congress that has already agreed to cut some $960 billion from Medicaid, and a devastating blow to the ACA, but some conservatives would like to try.

“It doesn’t make any sense for the federal government to pay states much more in federal money than they spend on the able-bodied, working-age adults than on traditional enrollees in the program,” Blase said. “That disparity is immoral in our view, and it’s bad economic health policy.”

Other conservative goals for health insurance could be carried out by the White House, though passing a law would be more enduring.

Among those are reviving short-term health insurance plans and association health plans. Democrats deride such options as “junk insurance,” but many conservatives see them as less expensive solutions for small businesses that introduce more competition in the market.

Miller said such plans were lower down the priority list, and the White House could probably handle them.

“There are things that can be done to improve the regulation and oversight of that product market to make it operate better, more clearly, more transparently, and be more available and accessible,” Miller said. “I think most of those are administrative tools.”

Similarly, many conservatives would like to see more done with Individual Coverage Health Reimbursement Arrangements, which allow smaller employers to reimburse workers for health insurance premiums. Proposals to expand the arrangements were included in the House tax bill but fell out in the Senate.

“We think there’s a way that the administration or Congress could build off of ICHRAs to make that a more robust option for employers and employees,” Blase said.

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