6 Key Federal Health Law Changes in 2025 and Their 2026 Impact

2025 was a busy year for federal health law, with several major laws, regulations, and policy changes. Many of these will still be relevant in 2026. The following is a brief overview of the most significant developments and what they may mean going forward.

1. The “One Big Beautiful Bill Act” (OBBBA)

The OBBBA was a comprehensive reconciliation bill enacted in mid-2025.  The law includes noteworthy changes to federal health policy, including changes to Medicaid, Medicare, and the Affordable Care Act (ACA). The law addresses health coverage and federal program integrity, along with new eligibility and verification requirements for ACA marketplace enrollment.  The phasing out of enhanced ACA premium tax credits could raise enrollees’ costs unless there is further legislative action.

2. Inflation Reduction Act

Pursuant to the Inflation Reduction Act of 2022, effective January 1, 2026, Medicare began implementing drug pricing negotiated between the government and drug manufacturers.  These “final maximum fair price” amounts can only be adjusted for inflation (tied to the CPI), or through subsequent negotiation. Under this program, in 2026, drug costs are capped for ten Medicare Part D drugs.  Up to fifteen more drugs will be added per year in 2027 and 2028, with up to 20 more added each year thereafter.

3. Digital Health Law and HIPAA

The past year saw significant developments in digital health law, driven by fast-paced technological innovations. Proposals have been made to expand oversight and provide guidance on various electronic health-related tools, including AI-enabled platforms and telemedicine modalities.  Despite the relative speed of the proposals, concerns remain that technology is advancing faster than safeguards can be put in place.

There was also an increased focus on data privacy and patient rights.  The HIPAA Notice of Privacy Practices requirements were updated, requiring covered entities to revise their public notices to conform to the new privacy rule.  On February 16, 2026, all Notice of Privacy Practices must include information on substance use disorder.  Proposed updates to the HIPAA Security Rule include proposals emphasizing encryption, multi-factor authentication, and stronger breach response obligations.

4. Federal Trade Commission

Despite policy changes from the new administration, the FTC continued its close scrutiny of health care mergers and acquisitions in 2025.  Significant investigations into pharmacy benefits managers were also initiated. Additionally, although the proposed rule against non-compete agreements was withdrawn, the FTC notified 19 for-profit healthcare systems that they should review their noncompete agreements for legal compliance.  The FTC stated that noncompete restrictions can unreasonably limit employment opportunities for healthcare professionals and adversely impact patient access to care. Challenges to noncompete covenants will likely increase on the federal and state levels in 2026.

5. Enforcement and Compliance

In 2025, the federal government continued its heightened scrutiny of healthcare issues.  The “National Health Care Fraud Takedown” began in June 2025, and involved the Department of Justice, Health and Human Services, the HHS Office of Inspector General, the FBI, and the DEA, along with their state-level counterparts.  The Takedown included billing schemes, improper arrangements, and drug diversion. To-date, 324 individuals, including 96 licensed medical professionals, have been criminally charged.  In 2026, the broad investigations will continue, with enforcement into noted areas of high risk.

6. The Great Healthcare Plan

Although not proposed in 2025, mention should be made about The Great Healthcare Plan released by President Trump on January 15, 2026.  The Plan consists of a single page (two, including the cover) and summarizes a new healthcare plan, covering four specific areas:

First, the Plan proposes Lower Drug Prices through: 1

• Legislative adoption of the administration’s “most favored nation” policy, which ties US costs to the lowest price paid by other countries, grandfathering in the 16 companies that have already voluntarily agreed to apply the model; and
• Increasing the number of over-the-counter medications.

Second, the Plan sets a goal of Lower Insurance Premiums. These would be achieved by:

• Providing funds to purchase insurance directly to individuals, eliminating the ACA subsidies which are paid directly to insurance companies;
• Funding a cost-sharing program for healthcare plans; and
• Eliminating kickbacks to pharmacy benefit managers.

Third, the Plan seeks to hold insurance companies accountable. The proposal would:

• Set a “Plain-English Insurance” standard to make information clearer to consumers;
• Require health insurers to publish the percentage of revenue applied to overhead versus the percentage used to pay claims; and
• Require insurers to publish the percentage of claims they reject and the average times for approval of routine care.

Fourth, the Plan would require healthcare providers and insurers who accept Medicare or Medicaid to post their pricing and fees publicly.

The Plan comes at a time when CMS is already making efforts to simplify insurance pricing, and both Congress and the administration are scheduling testimony from and meetings with health insurance executives.  2026 could bring some significant changes to the insurance industry.

Conclusion

Federal health law is entering 2026 with significant momentum. As the policy changes, enforcement actions, and proposed reforms take shape, health care providers, insurers, and stakeholders should expect continued scrutiny and further regulatory shifts throughout the year.