What the 2026 midterm election results mean for healthcare policy

Blue “tsunami” as Dems sweep both chambers of Congress in the 2026 midterms and set the stage for healthcare policy over the next few years

While the full results of the 2026 midterms are still pending, Democrats have, as of this writing, secured control of both the House and the Senate, giving us a better idea of where healthcare policy is headed over the next couple of years.

In today’s post, we’ll look at what a Democratic Congress means for healthcare policy and cover where the parties still overlap.

A Democratic Congress likely won’t generate significant new legislation (or reversals), but could make incremental adjustments—and set the stage for 2028

The 2026 midterm election was an especially interesting one because healthcare policy actually wasn’t a central focus on the 2024 campaign trail but ultimately ended up being a huge part of this administration’s agenda: the One Big Beautiful Bill Act (OBBBA), Make America Healthy Again (MAHA), and Most Favored Nation pricing. And healthcare—especially affordability (or lack thereof)—became a focal point of the midterms.

The midterms functioned as a referendum on the past two years of Republican control in Washington, with voters frustrated on several fronts: the war in Iran, rising gas prices, immigration, and, of course, healthcare costs. More specifically, the expiration of the enhanced ACA tax credits at the end of 2025, rising premium payments for millions of marketplace enrollees, and OBBBA’s looming Medicaid cuts and work requirements gave Democrats a ready-made message on coverage losses and healthcare affordability. However, a Democratic sweep of Congress still leaves a Republican in the White House, effectively putting the country into a political standstill and making significant legislative moves—in healthcare and elsewhere—unlikely.

That said, there are some near-term actions Democrats can pursue, and the party will also use the next two years to set the stage for 2028. We’re watching three likely priorities for a Democratic-led Congress: reinstating the ACA enhanced tax credits, rolling back certain OBBBA provisions, and expanding Medicare.

Reinstate ACA enhanced tax credits: Democrats in Congress have been pressing Republicans for letting the subsidies expire at the end of 2025. Proposing to reinstate those subsidies is one of the “easier” things that Democrats can do because 1) it’s a straightforward sell—putting money back in people’s pockets—and 2) it can be done through reconciliation, which needs only a simple majority. Of course, it will almost certainly face opposition from Trump, who has threatened a veto of extending the subsidies in the past. But given the President’s populist positioning, vetoing something that has considerable public support would carry real political risk.

“Roll back” certain OBBBA provisions: Affordability challenges loom large for both parties, and Democrats have said they want to minimize OBBBA’s potential coverage losses. Democrats would likely pursue incremental rollbacks or delays of the most unpopular provisions (e.g., delaying work requirements or expanding exemptions from them) rather than sweeping changes. However, even incremental statutory changes would require presidential approval or a veto override. So, the most realistic path forward is for Democrats to withhold support for other legislative priorities as a bargaining chip, pushing to include OBBBA changes in a broader deal that Trump would be willing to sign. (That’s all at the national level. States actually have a bit more power to soften OBBBA’s impact without Trump’s signature—like choosing to adopt authorized hardship exceptions or less burdensome verification procedures within federal rules—and now Dems have more state-level authority.) Keep in mind that even if Democrats win the White House in 2028, reversing these provisions won’t be easy: reversing the cuts requires new federal spending and, because the budget baseline now assumes the lower spending, the reversal would be a cost that needs offsets (i.e., tax increases or other cuts).

Expand Medicare and add a Medicare public option: Public support for Medicare for All has never been higher: a September 2026 KFF poll found 66% favor it, the highest since KFF began tracking in 2016. But KFF also found that support drops when people hear it could eliminate private plans, raise taxes, or lengthen waits, and its chances of passing at a national level remain exceedingly slim. Worth watching is a cluster of Democratic proposals to expand Medicare and create a Medicare public option, or a “Better Medicare.” House Democrats’ pre-election health agenda would add dental, vision, and hearing benefits to Medicare and would lower the eligibility age. The Choose Medicare Act, reintroduced in June 2025 by Senators Merkley and Murphy and Representatives Gomez and Beyer, would create a Medicare “Part E” public option sold on the ACA exchanges, usable with ACA subsidies and available for employers of any size to offer their workforce; it would also add an out-of-pocket cap to traditional Medicare. And “Medicare by Choice,” floated this spring by former congressional staffers and federal health leaders, would let employers offer Medicare to their employees and add an out-of-pocket cap plus dental, vision, and hearing benefits. Taken together, these proposals borrow popular features from Medicare Advantage and broaden Medicare eligibility. Momentum is building in the Senate as well: Senate Finance Democrats’ July RFI seeks input on a public, Medicare-like coverage option. These proposals are gaining traction at the precise time when employers are facing a surge in medical trend, and the employer option would give them a way to offer Medicare to their workforce as an alternative to increasingly expensive commercial coverage. Democrats can now use the next two years to fine-tune and test different versions of a “Better Medicare” in preparation for the 2028 presidential election.

Some Republican-driven initiatives are likely to stick around

With a Republican president still in office, the GOP will continue to make its mark on healthcare in the coming years. Much of what Republicans accomplished is either written into law through OBBBA (which, as we covered, would take new legislation and a presidential signature to reverse) or driven by executive action at HHS and CMS, where Congress has limited direct control.

Payment updates: CMS’s annual payment rules (e.g. IPPS, OPPS, Physician)and MA payment updates are both areas where a Democratic Congress will have little say because they are regulatory decisions.CMS writes, finalizes, and implements them through annual rulemaking, with little input from Congress. (Congress has stepped in to soften physician pay cuts in past years, as we saw with the Consolidated Appropriations Act which provided a temporary 2.5% payment increase for 2023.) Also important to note is that this administration has proven itself as one that is not particularly friendly to either providers or plans, a notable departure from typical political precedent.

More MAHA initiatives: According to recent reporting, Kennedy plans to stay on as Secretary of the U.S. Department of Health and Human Services (some had assumed he would leave after the midterms). News outlets have cited HHS statements and a source close to HHS saying Kennedy feels emboldened on vaccines and MAHA, so we expect him to keep the momentum going on MAHA-related initiatives (namely changes to the vaccine schedules). Democrats’ ability to reverse course is limited though because MAHA has been driven almost entirely by executive action at HHS, including the vaccine schedule overhaul that cut the number of routinely recommended childhood vaccines and Kennedy’s replacement of ACIP’s members with his own appointees. So far, the courts have done more to slow MAHA than Congress has. For example, a federal judge temporarily paused changes to federal childhood vaccination recommendations while a lawsuit challenging those changes proceeded.

More market-driven options: Much of this administration’s cost-cutting has relied on market-based tools like HSAs and ICHRAs or “CHOICE arrangements.” And now, many of these tools are now baked into law: OBBBA made bronze and catastrophic marketplace plans HSA-eligible starting January 1, 2026, and allowed direct primary care arrangements to pair with HSAs. Democrats have historically been skeptical of these tools, arguing that HSAs disproportionately benefit healthier, higher-income people. But it will be difficult for Democrats to reverse course. because rolling back tax-code changes requires new legislation that the President would almost certainly veto and these options are popular with employers looking for relief from rising costs. That said, Democrats could still push for guardrails (e.g., consumer protections for high-deductible plans) in lieu of outright reversal.

AI regulation: Administrations typically favor one or two traditional industry groups (payers, providers, Big Pharma). But this administration has bet with health tech and Big Tech over the traditional healthcare players. (I cannot overstate just how unusual this is.) We see this play out in multiple ways—some that are obvious and others that are more subtle—including the “Make Health Tech Great Again” event hosted by the White House last summer, new CMMI models that promote the use of technology and data integration, and a hands-off approach to AI regulation. AI regulation—even beyond healthcare—will be an especially interesting space to watch. Voter backlash against AI data centers—over electricity bills, water use, and local impacts—was a real factor in the midterms: 56% of voters in the NBC exit poll said AI and data centers were a crucial or major factor in their vote, and voters in dozens of localities approved data center bans or restrictions. And concerns about cybersecurity, privacy, kids’ safety, and job losses have added to the growing anti-AI sentiment. Despite the growing backlash, this administration has taken a hands-off approach to regulating the technology itself—and has actually gone a step further to try to block state AI laws. In general, Democrats tend to want more regulation but haven’t coalesced around a single plan; proposals range from transparency and liability requirements to a pause on advanced AI development. With little chance of sweeping AI legislation getting past the President, regulation will likely be left to the states. That’s already happening in healthcare: states like Maryland, Colorado, and Utah have passed laws governing how AI can be used in coverage decisions and patient care.

Affordability still drives bipartisan overlap for the 120th Congress

As is probably clear by this point, healthcare affordability is one of the biggest areas of bipartisan focus. Both Republicans and Democrats face growing pressure from constituents burdened by rising premiums, out-of-pocket costs, and prescription drug prices. This shared concern has led to overlapping policy efforts in three areas—PBM reform, drug pricing reform, and provider payment reform—which will likely remain a focus for both parties.

PBM reform: PBMs have been under increasing public and political scrutiny over the past few years, with both parties blaming PBMs as a source of higher drug costs due to opaque pricing. We’ve already seen proposals from both sides targeting pricing transparency and practices like spread pricing and rebate retention, and some aiming to limit vertical consolidation.

Drug pricing reform: There’s widespread frustration with high drug prices, as drug prices push up premiums and cost sharing in Medicare and commercial plans, driving up overall healthcare spending. In response, we’ve seen both parties introduce separate and joint policies aimed at increasing transparency and bringing down drug prices for patients.

Provider payment reform: Under current rules, recommendations of the Relative Value Scale Update Committee (RUC)—an AMA committee that recommends relative value unit (RVU) values to CMS, which sets the physician fee schedule—can overvalue certain specialized procedures relative to primary care. Both parties support recalibrating RVUs to reflect actual practice costs and support primary care, and both support moving care to lower-cost settings through site-neutral payment and changes like the three-year phase-out of the inpatient-only (IPO) list, which CMS began in 2026 and which will be fully eliminated by January 1, 2029.

The parties differ in their approaches even when they share the same end goal: Republicans tend to favor market-based solutions and competition, while Democrats tend to favor expanded coverage and price regulation.

Join us next week for our post-election analysis

We’ll be back next Thursday November 12th at 1pm ET for a post-election discussion breaking down the midterm results and what they mean for healthcare policy. Members and non-members can register for the webinar here: https://www.unionhealthcareinsight.com/publicwebinars