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In collaboration with:
May 8, 2025
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Spotlight
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On May 2, the Office of Management and Budget released a high-level White House Fiscal Year (FY) 2026 Discretionary Budget Request. The President’s budget is a set of recommendations which Congress may consider, but is not required to adopt, including recommended spending levels for agency programs, projects, and activities funded through the annual appropriations acts (excluding Medicare and Medicaid benefits). The budget requests $93.8 billion for the Department of Health and Human Services (HHS) in FY 2026, which is $33.3 billion less than FY 2025 enacted amounts. The HHS provisions in the President’s budget request are largely focused on implementing the proposed reorganization of HHS and the creation of a new Administration for a Healthy America (AHA). The budget proposes $500 million in funding for Make America Healthy Again (MAHA), including nutrition, physical activity, healthy lifestyles, and food and drug quality and safety. The budget also decreases funding substantially for several agencies, including reducing the Centers for Disease Control and Prevention (CDC) funding by $3.5 billion, National Institutes of Health (NIH) funding by $18 billion, and the Center for Medicare and Medicaid Services (CMS) funding by $674 million. The high-level budget does not detail funding requests for several agencies including the Food and Drug Administration (FDA), Advanced Research Projects Agency for Health (ARPA-H), and the Indian Health Service (IHS).
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Overview of HHS Provisions of the President’s FY 2026 Budget Outline
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NIH
($27 billion requested for FY 2026, a reduction of $18 billion)
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- Proposes consolidating the 27 NIH institutes and centers into eight and the creation of the National Institute on Body Systems Research; National Institute on Neuroscience and Brain Research; National Institute of General Medical Sciences; National Institute of Disability Related Research; and National Institute on Behavioral Health.
- Proposes elimination of funding for the National Institute on Minority and Health Disparities (-$534 million), the Fogarty International Center (-$95 million), the National Center for Complementary and Integrative Health (-$170 million), and the National Institute of Nursing Research.
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CDC
($4 billion total requested for FY 2026, a reduction of $3.5 billion)
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- Proposes cutting funding nearly in half for Infectious Disease, Opioids, Viral Hepatitis, Sexually Transmitted Infections, and Tuberculosis programs, consolidating into one grant program funded at $300 million.
- Proposes elimination of several programs and centers, including: the National Center for Chronic Disease Prevention and Health Promotion, National Center for Environmental Health, National Center for Injury Prevention and Control, the Global Health Center, Public Health Preparedness and Response, and Preventive Health and Human Services Block Grants.
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CMS Program Management
(proposes a reduction of $674 million)
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- Requests a reduction in funding for CMS of $674 million, for CMS Program Management.
- Proposes elimination of funding used to carry out “health equity-focused activities.”
- The budget outline does not include information on Medicare and Medicaid benefits, which is the vast majority of CMS’ budget.
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HRSA
($6.5 billion requested for HRSA activities for FY 2026, a reduction of $1.7 billion)
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- Consolidates programs formerly part of the Health Resources and Services Administration (HRSA), including the Ryan White HIV/AIDS Program.
- Requests a $1 billion reduction in health workforce program funding, $286 million reduction family planning programs, $274 million reduction in funding for maternal and child health programs, and $74 million reduction for education and training programs.
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SAMSHA
($5.7 billion requested for FY 2026, a reduction of $1 billion)
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- Proposes moving Substance Abuse and Mental Health Services (SAMHSA) activities to the Administration for a Healthy America.
- Proposes elimination of funding for the Mental Health Programs of Regional and National Significance, Substance Use Prevention Programs of Regional and National Significance, and the Substance Use Treatment Programs of Regional and National Significance.
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On May 14, HHS Secretary Kennedy is scheduled to testify before the Senate HELP Committee on the proposed HHS budget for FY 2026 and additional authorizing and appropriations committees will likely hold hearings on the President’s HHS budget. These hearings will provide additional information on how Congress is viewing spending priorities for FY 2026 as they work to draft legislation to fund agency programs and activities. These hearings also provide an opportunity for stakeholders, including funders and their partners, to propose questions that members of Congress may want to ask the Secretary. Stakeholders can email the staff of Senators and Representatives on health and appropriations committees to share proposed questions that Senators and Representatives could ask at scheduled committee hearings.
Appropriations legislation requires 60 votes in the Senate to advance, meaning bipartisan support will be necessary to pass appropriations legislation for FY 2026. Congressional Republicans and Democrats will consider the President’s budget, as well as requests from stakeholders and the priorities of specific Members of Congress to develop appropriations legislation. If an agreement is not reached on FY 2026 appropriations, Congress could pass a continuing resolution to continue funding the federal government at FY 2025 (current) levels.
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Health and Human Services Updates
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On May 5, the Administration for Community Living (ACL) announced the release of $1.1 billion in funding opportunities. The funding, which was provided by Congress in fiscal year 2025 appropriations, will be released by the agency over the next two weeks through an Older Americans Act formula grant program to all 50 states and six territories, as well as 293 tribes. The press release also indicated that other grants will fund assistive technology, independent living, protection and advocacy, and state councils on developmental disabilities programs. Grantmakers should watch for announcements in coming weeks on federal funding opportunities and awards and coordinate with states, territories, tribes, and other entities on utilizing funding to support older Americans.
On May 1, HHS and NIH announced Generation Gold Standard, a new universal vaccine platform for protection against pandemic-prone viruses. The initiative funds NIH development of influenza and coronavirus vaccines to protect people against multiple strains of pandemic-prone viruses through a beta-propiolactone (BPL)-inactivated, whole-virus platform. Senator Bill Cassidy (R-LA), Chair of the Senate Health, Education, Labor, and Pensions Committee, which has jurisdiction over NIH commended the initiative, stating that this is an important area of research to better be prepared to address health threats. However, some vaccine experts have expressed criticism that the initiative utilizes an older technology and are skeptical of funding a universal flu vaccine using this technology. Clinical trials for universal influenza vaccines are scheduled to begin in 2026, with FDA approval targeted for 2029. The announcement of Generation Gold Standard also follows comments from an HHS spokesperson that the department will require new vaccines to undergo a placebo-controlled clinical trial. Updated vaccines for seasonal flu or circulating strains of COVID-19 could be considered new vaccines, and some public health experts are concerned that the requirement for a placebo-controlled trial would result in delayed availability of these vaccines.
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On May 1, 20 of the more fiscally conservative Republican members in the House released a “Dear Colleague” letter urging their fellow Republicans to pursue “meaningful reforms” to Medicaid during the budget reconciliation process. The letter encourages Congress to lower the federal match rate for the Medicaid expansion population to match that of other populations, limit provider taxes, and hold states accountable for eligibility verification and program integrity by tying “federal funding to responsible management and oversight.” In April, a separate group of House Republicans, many of whom are from more moderate districts sent a letter to House Republican Leadership affirming their commitment to protecting Medicaid and stating that they would not support efforts in reconciliation to reduce Medicaid coverage for vulnerable populations, particularly children, seniors, individuals with disabilities, and pregnant women. In the letter, the Representatives stressed that balancing the federal budget should not come at the expense of those relying on Medicaid for health and economic security. Additionally, the Representatives highlighted the critical role Medicaid funding plays in sustaining hospitals, nursing homes, and safety-net providers, particularly in rural and underserved areas. Notably, the letter does not say the members would vote against any Medicaid funding cuts, leaving the door open for some Medicaid funding reductions. The varying positions in these letters emphasize the difficulties faced by House and Senate Republicans in identifying viable proposals that meet the budget resolutions instructions for cost savings. In recent days, there have also been reports that the White House is suggesting a policy to reduce drug prices in the Medicaid program to match prices charged to other nations.
Additionally, on May 1, House Energy and Commerce Committee Ranking Member Frank Pallone, Jr. (D-NJ) released a report highlighting the consequences of work requirements on Medicaid beneficiaries’ access to health care. The report comes as Congressional Republicans and the Trump Administration are considering proposals to allow or require states to condition Medicaid eligibility on beneficiaries’ employment status. In his report, Ranking Member Pallone presented two case studies of states that implemented the work reporting requirements—Arkansas in 2018 and Georgia in 2023—and found that implementation caused tens of thousands of people to lose health care coverage. The report also noted that, as of September 2024, more than 80 percent of spending on Georgia’s Pathways to Coverage program was on administrative costs associated with implementing work reporting requirements rather than on health care coverage. Ranking Member Pallone also referenced a 2023 Congressional Budget Office (CBO) report that stated establishing nationwide reporting requirements would result in a $260 billion cut to Medicaid and that 2.5 million Americans would lose coverage. While some type of work requirement is expected to be included in a reconciliation bill, the report emphasizes the potential impacts of such policies. More information on possible Medicaid policies in a reconciliation bill, as well as how grantmakers can impact congressional negotiations on the bill can be found in the February 2025 GIH issue brief.
As the FY 2026 appropriations process begins in Congress, the Senate Appropriations Committee held a hearing focused on the role of federal funding in biomedical research. During the hearing, the panel of witnesses described the importance of stable federal funding for institutions conducting biomedical research, as well as the positive impacts of federally funded biomedical research on patients, researchers, and the U.S. economy. Senate Republicans, including Committee Chair Susan Collins (R-ME), emphasized the importance of biomedical research both for patient outcomes as well as economic growth, especially for rural states. Multiple Republicans also expressed concern with proposed cuts to NIH programs as well as the 15 percent cap on institutional Facilities and Administrative (F&A) expenses paid to grant recipients, also known as indirect costs. The 15 percent cap on indirect costs, which is the subject of several lawsuits, is lower than the average 27-28 percent rate for NIH grantees and could increase pressure for private funders to allow higher percentages of indirect cost rates. Senate Democrats also shared concerns surrounding the indirect cost cap for NIH grants, as well as proposed reductions in funding for NIH. Further, they expressed frustration with recent pauses to grantmaking within NIH, as well as reductions in force within NIH and FDA. The statements during the hearing from Republicans and Democrats indicate continued support for NIH funding among Senate appropriators, despite Administration proposals.
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