During the first Trump administration, the Food and Drug Administration was widely viewed as a standout agency, enhancing and expediting drug regulation, regulating tobacco and vaping, and addressing food safety.
In the first year of Trump’s second term, the FDA, along with many other health agencies, has become politicized and demoralized. Conversely, the Center for Medicare and Medicaid Services — which oversees $1.7 trillion in outlays for health care services, 24% of the federal budget — has become the shining star.
In 2025, more than 10% of federal workers (300,000) left government service, including more than 10,000 people with STEM doctoral degrees. This administration has fired and driven out skilled, dedicated public servants, and demoralized those who remain. This exodus and other policies have damaged safety, health, finances, and education both in the U.S. and around the world. Health secretary Robert F. Kennedy Jr.’s scientifically unsupported paring down of the childhood vaccine schedule has put American lives at risk. Meanwhile, the departure of 50,000 employees from Veterans Affairs has increased waiting times for veterans seeking care and led to lower quality care by contractors.
In contrast, CMS stands out, making changes and innovating on the essential nonpartisan missions of the agency. Given the crisis status of the health care system, Trump’s CMS deserves recognition. One of us, Ezekiel, helped design the Affordable Care Act in the Obama administration, so that’s really saying something.
There is plenty of bad coming out of the federal government on health care. The One Big Beautiful Bill Act is reducing Medicaid funding by $1 trillion in a decade, and well over 10 million people will lose coverage. Additionally, congressional failure to extend the enhanced Affordable Care Act Marketplace subsidies has more than doubled the average premium for enrollees and has already resulted in more than 1 million fewer people signing up for coverage compared with this time last year. CMS has taken steps to limit the ACA Marketplace enrollment period, which will further increase the number of Americans without insurance.
However, the massive cuts to health care access resulting from Trump’s tax cut measure and other executive-led catastrophes are outside CMS’s control.
But on matters that are within its control, CMS has succeeded. For instance, it has successfully moved to strengthen primary care. CMS increased pay for primary care physicians while lowering the amount specialists like surgeons receive — a reform we and other experts have long advocated. The recent pay bump for primary care is insufficient, but it is an important start and a signal for the future.
Another positive change — long advocated for by think tanks and the Congressional Medicare Payment Advisory Committee (MedPAC) — is the expansion of so-called site neutral payments. The government pays substantially different amounts for the same services depending on whether the care is delivered in a hospital or at an ambulatory care facility. For example, an average hip replacement done in a hospital is nearly $3,500 more than the same hip replacement done in an ambulatory surgical center. This is among the most expensive flaws in health care. Estimates suggest shifting care from hospitals to lower cost settings could save $100 billion a year without compromising quality. Importantly, equalizing payment across sites through expanded site-neutral payment policies could yield savings of similar magnitude.
CMS recently announced expansion of site-neutral payments in Medicare for the administration of drugs like chemotherapy agents and immunotherapies for diseases like rheumatoid arthritis and inflammatory bowel diseases. KFF’s Zachary Levinson writes that “the Administration’s change to reimbursement for drug administration services represents a step forward in implementing site neutral payment reforms but is modest compared to some of the more sweeping options raised by MedPAC and others.” Nevertheless, we are optimistic that this is a harbinger of more extensive reforms.
Many expected that CMS policies under Trump 2.0 would be hospitable to highly profitable Medicare Advantage plans that receive about $500 billion per year in federal payments. Amazingly, CMS proposed a Medicare Advantage payment increase of just 0.09% ($700 million) for 2027. This comes in stark contrast to the more than 5% ($25 billion) increase given last year. Experts warn that private insurers game the Medicare Advantage system by “upcoding” to make their patients appear sicker (increasing payments) and by selecting healthier patients who are over-reimbursed for compared to their projected actual costs. That is certainly waste and abuse. MedPAC estimates that these practices and other factors cause the federal government to overpay Medicare Advantage by more than $75 billion a year.
CMS’s announcement of a nearly flat payment increase signaled an end to the huge profits private insurers expected to make from Medicare Advantage. Indeed, the recent announcement of the small payment increase vaporized nearly $100 billion in market value from top Medicare Advantage plans like UnitedHealth Group and CVS Health. Moreover, it signals seriousness by this CMS to root out gaming and save the system money. This is reflected in another recent CMS announcement to expand its audit workforce with plans to audit all Medicare Advantage plans — rather than a subset, as they have done previously.
Finally, the CMS Innovation Center has been productive without tearing down progress made by previous administrations. The current administration has already built upon existing successful primary care-focused models and announced several new ones that have potential to improve quality and reduce costs.
For example, the Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) model is intended to speed the adoption of artificial intelligence-enabled technologies with the goal of better management of chronic conditions like hypertension and diabetes — which combined contribute to about a million deaths annually. Importantly, the model will pay based on patient outcomes, not simply for delivering services to patients regardless of whether those services save costs or reduced morbidity and mortality.
Another model announced by the Innovation Center is the Wasteful and Inappropriate Service Reduction (WISeR) model, which introduces prior authorization into traditional Medicare. Widespread public hostility to prior authorization ensured the reception to WISeR was negative. However, the model will test prior authorization for just 17 highly abused medical services.
For example, WISeR includes skin substitutes, which are bioengineered materials used to heal and close wounds and are far more expensive than standard wound care. Medicare pays anywhere from $100 to over $2,000 per square centimeter (0.15 square inch) of skin substitute. According to CMS data, Medicare spending on skin substitutes increased from $252 million in 2019 to over $10 billion in 2024. Recent estimates show another increase to $15 billion for 2025.
Such an explosion in spending of taxpayer dollars raises valid concerns of waste, fraud, and abuse. An Arizona couple co-operating a wound care company recently pleaded guilty to causing over $1.2 billion of fraudulent claims for medically unnecessary skin substitute products between 2022 and 2024. WISeR is carefully designed and is targeted at correcting real fraud done by providers and health care companies.
Not all policies out of CMS in Trump 2.0 have been positive. Over the summer, the administration announced rescinding Biden-era EMTALA abortion guidance, which voiced support for the law protecting clinicians who provide abortion-related emergency care, no matter which state they practice in. The withdrawal did not change the law but increased legal uncertainty for providers.
Polling shows that, as of January, health care costs are the No. 1 worry for American households, more than costs for groceries, housing, monthly utilities, gasoline, and other expenses. We are approaching a reckoning for the flaws of our health care system, and there is nothing CMS itself could do to “fix” the system. An “affordability” reform package will be necessary under whichever administration takes office in 2029.
However, given the failures at most federal agencies this past year, action by CMS to uplift primary care and lower exorbitant health care spending is laudable.
Ezekiel J. Emanuel is vice provost for global initiatives and co-director of the Healthcare Transformation Institute at the Perelman School of Medicine and the Wharton School at the University of Pennsylvania. Merjan L. Ozisik is a research fellow in the Department of Medical Ethics and Health Policy in the Perelman School of Medicine at the University of Pennsylvania.