TrustWorks On Call: Shutdown Special

Behind the Headlines

Unpacking the forces driving healthcare's biggest stories.

1. Government shuts down over ACA subsidies.

For the first time since 2018, the federal government shut down last Wednesday, October 1st, with Senate Democrats conditioning their support for a funding bill on the extension of enhanced subsidies for the Affordable Care Act (ACA) exchanges, among other spending provisions.
The House chose not to return to session this week, while the Senate negotiates over the House-passed package, which would provide funding through November 21st with a “clean” continuing resolution, and the Senate Democrats’ proposal, which includes funding through October 31st and makes the ACA subsidies permanent.
Congress also allowed COVID-era Medicare telehealth flexibilities and the Acute Hospital Care at Home waiver program to lapse as of September 30th.

TrustWorks Take: If the enhanced subsidies are not extended before the ACA exchanges begin open enrollment on November 1st, the average ACA plan's out-of-pocket premium payment will increase by 114 percent, from $888 to $1904 annually. Protecting households from such a price shock makes the Democrats’ stand here good policy, and it appears to be good politics as well. Over three-quarters of the public, including 59 percent of Republicans, want Congress to extend the subsidies, and more Americans blame Trump and elected Republicans than elected Democrats for the shutdown. Beyond the partisan blame game, what’s really at stake is fundamental access to healthcare, especially at time when nearly every other household cost from groceries to utilities is increasing.

There are other issues impacting providers during this shutdown that have gotten lost in the shuffle. Medicare beneficiaries have lost their COVID-era telehealth flexibilities, and health systems can no longer participate in the Acute Hospital Care at Home waiver program. That these policies were allowed to expire now, and that they hadn’t already been permanently extended after years of demonstrated benefits, only underscores the dysfunction and short-sightedness that seems to be characteristic of current Congressional healthcare policymaking.

2. Rite Aid shutters all stores.

As per a notice posted on its website last Saturday, retail pharmacy chain Rite Aid has permanently closed its remaining stores.
Rite Aid, which filed for Chapter 11 bankruptcy in both October 2023 and May 2025, had already reduced its footprint of stores from thousands at its peak to fewer than 100 as of last week.
During this year's bankruptcy proceedings, Rite Aid sold the prescription files for about 1,000 of its stores to other large retail pharmacies like CVS and Walgreens, although only a small fraction of those stores have continued to operate under new management; no buyer emerged for the Rite Aid brand itself.
Rite Aid’s “perfect storm” of problems included pandemic-induced sales declines, an increasingly cost-sensitive customer base, a vicious cycle of declining vendor relations, large settlements over its alleged role in the opioid epidemic, an inability to raise more capital, and a high debt burden that made it nearly impossible to respond to these challenges.

TrustWorks Take: Although the pandemic and various opioid settlements may have delivered the final blows, the pivotal moment in this story dates back to 2017, when the Federal Trade Commission blocked Rite Aid’s attempt to merge with Walgreens due to antitrust concerns related to a reduction of competition in the retail pharmacy market. Walgreens has fared little better, having recently gone private and restructured after failing to make good on its purchase of VillageMD. Without a profitable pharmacy benefit manager, like CVS’s Caremark, or a thriving retail operation, like Walmart, the chain drug store model isn’t sufficiently profitable on its own and faces too many successful competitors. Had that 2017 merger gone through, the combined entity may have still found itself in a similar boat today, but the irony is that CVS, the largest pharmacy business by revenue, appears most poised to benefit from Rite Aid’s closure. CVS can selectively scoop up Rite Aid’s customers, who tend to be older and live in lower-income urban or rural areas, while the least desirable locations Rite Aid had served will stay closed. What began as a perceived antitrust victory now looks more like another chapter in the growing crisis of pharmacy deserts and the further erosion of healthcare access.

3. White House strikes Medicaid deal with Pfizer.

Last Tuesday, President Donald Trump and Pfizer CEO Dr. Albert Boula announced that Pfizer, in exchange for three years of tariff relief, has agreed to lower its prices for many of the drugs it sells to state Medicaid programs; it will also align its list prices for new drugs across the US and other wealthy nations.
As part of the deal, the White House also teased TrumpRx.gov, a new direct-to-consumer (D2C) pharmaceutical website launching in 2026 that will connect consumers to drugmakers’ own D2C websites and allow them to purchase drugs outside of their insurance for a 50-percent average discount.

TrustWorks Take: This deal is designed to make it seem like the White House is addressing healthcare affordability, despite doing very little to lower costs for consumers. Because Medicaid drug copays are almost always nominal capped fees, whatever savings state Medicaid programs may see from lower drug prices can’t be passed onto Medicaid beneficiaries. (It should go without saying that the scheduled Medicaid cuts will have far more of an impact on drug affordability for Medicaid programs and their beneficiaries.) A meaningful deal would have included employers, private insurers, and Medicare, where consumer out-of-pocket spend is more directly tied to drug costs. Meanwhile, the forthcoming TrumpRx D2C website operates outside of insurance altogether, making it no different than GoodRx and no more than a coupon-and-redirect service for drugmakers’ own sales efforts. Perhaps the most impactful aspect for consumers of this “artful deal” is Pfizer securing a three-year guarantee of tariff relief, freeing the company from deciding how much of the tariff to pass onto consumers.

Beyond the Whiteboard

Visualizing key trends from the healthcare industry

The Inevitability of Site Neutrality
The 2026 Hospital Outpatient Prospective Payment System (OPPS) Proposed Rule picks up where the first Trump administration left off, proposing to eliminate over three years Medicare’s Inpatient Only (IPO) List, which identifies procedures that Medicare only reimburses in the hospital inpatient setting. The proposed rule is very similar to the 2021 OPPS Final Rule, which was promulgated under Trump but implemented under Biden. The rule initiated a three-year phase-out of the IPO List, only for the Biden administration to reverse course and restore the IPO List in 2022. If this year’s rule is finalized, almost 300 procedures, mostly musculoskeletal, will move off the IPO List in 2026, and over 500 procedures, about half of which were on the IPO List, will be added to the Ambulatory Surgery Center Covered Procedures List (ASC CPL).

Departing from precedent, the Trump administration is indicating that it no longer recognizes a patient-safety distinction between the inpatient and outpatient procedures, and that it will be far more permissive toward procedures performed at ASCs. This has huge implications for hospitals because, as evidenced by knee and hip replacements, procedures tend to migrate quickly to their lowest-cost allowable settings. And once Medicare covers something on an outpatient basis, commercial payers are quick to follow. Many health systems are still holding onto inpatient procedural revenues as an important cross subsidy, but the march toward site neutrality feels inevitable. The transition can be slowed down or sped up, but it’s going in only one direction.

Dialing In

Sharing insights from our work with clients

Vaccine Agreements as a Pediatric Prerequisite
On a call with the head of a health system-sponsored medical group based in the suburbs of a metro area in a “purple” state, the conversation turned to rising vaccine hesitancy among their patient population. “You never know what ‘alternative opinions’ you’re going to get with our patients,” he admitted. “Our pediatricians seem especially demoralized. It’s hard to repeatedly hold these delicate, difficult, and important conversations in short appointment windows.” Because of that, one of the system’s pediatrics practices is contemplating putting together a proposal to require parents to agree to their evidence-based childhood vaccine schedules in order to register any child as a patient. He was curious to learn how well those worked in other places.

We haven’t yet come across a health system medical group instituting a vaccine agreement policy like that as prerequisite to becoming a patient, but we’ve heard about it from a few independent practices. Admittedly, there’s something unsettling about anything that denies patients access to care by limiting their choice of provider. However, vaccines are among the most important and impactful healthcare services a child can receive, and many pediatricians rightly feel that their duty to care for the health of their patients includes getting them vaccinated. By having the conversations about vaccine schedules upfront, it saves frontline doctors the stress of convincing parents on a case-by-case basis. It also gives parents the opportunity to reflect on their approach to vaccination, making it part of a broader choice on whom they want caring for their child.

Ultimately, it’s a chance for the medical group to convey its values and practices up front, which can have a rallying effect for providers and staff. For a medical group to determine if this approach is right for them, it should start with an honest internal discussion that weighs the goal of providing what they perceive to be the best care against the impacts on access to the specific communities they serve. Is this a different conversation in a suburban market with plenty of pediatrics groups versus in a rural community with far more limited options?

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