Medicare drug-pay cut could trim copays and strain cancer aid; decision expected soon

Connecticut hospital systems are warning that a proposed Medicare payment cut could threaten financial help and other programs for cancer patients. Hartford HealthCare estimates it would lose $79 million across its eight hospitals, CT Insider reported Friday ¹. Citing the trade publication Modern Healthcare, the report said a federal decision is expected in early November ¹.

The plan involves a real tradeoff. The Centers for Medicare & Medicaid Services (CMS), the agency that runs Medicare, estimates patients would pay $1.15 billion less for these drugs in the first year ². But an analysis by KFF, a nonpartisan health research group, found that the same plan would take revenue from safety-net hospitals while raising it for for-profit hospitals ⁴.

What the rule would change

Under a federal program called 340B, hospitals serving low-income patients can buy drugs at a discount ³. Medicare now pays those hospitals the drug's average sales price plus 6% ⁴. The proposal would pay the average sales price minus 33.4%, starting Jan. 1, 2027, a 37% reduction by KFF's count ⁴.

CMS says a 2026 survey of hospital drug costs supports the change. It found that a patient's share of the bill, typically 20%, was sometimes more than the hospital's whole price for the drug ². The Associated Press described a policy draft's example using the prostate cancer drug Lupron Depot. A hospital can buy a dose for roughly $700, receive about $4,000 from Medicare and collect another $1,000 from the patient ³.

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Medicare patients should not pay coinsurance as though the discount did not exist.

The agency estimates the average older adult with Medicare Part B, which covers outpatient care, who gets one of these drugs would save $800 a year in copays ³. In an example from Mulligan's opinion piece, the patient's share of a drug with a $1,000 average sales price would fall from $212 to $133.20 ⁵. The Community Oncology Alliance, which represents community cancer practices, applauds the change, arguing that overpayment pushes cancer care into higher-cost hospital settings ¹².

Who would pay for it

The savings do not simply leave the hospital system. Payments for other outpatient hospital services would rise 8.44% across the board to balance the drug cut, and patients who use those services would owe more ⁴. Maureen Testoni, who heads the hospital trade group 340B Health, argues the plan is therefore not about lowering costs for seniors ¹¹.

That shift would create winners and losers. KFF projects a 5.8% net loss in outpatient Medicare revenue for safety-net hospitals, which serve many low-income patients, and a 7.4% gain for for-profit hospitals, which are not eligible for 340B ⁴. Rural sole community hospitals, children's hospitals and a class of cancer hospitals exempt from Medicare's standard payment system would be spared the cut ⁴.

That matters because safety-net hospitals already have lower operating margins than average, KFF notes, and they may also be hit hard by the Medicaid reductions in the 2025 budget law ⁴.

The warnings from Connecticut

Hartford HealthCare told CMS that hospitals could lose savings they use for charity care and cancer services ¹. Trinity Health, which operates Saint Francis, Saint Mary's and Johnson Memorial hospitals in Connecticut, said it would lose $109 million across its 340B hospitals nationwide ¹.

This proposal threatens beneficiary access to those essential resources.

Yale New Haven Health said cuts could threaten the Medication Assistance Program at Smilow Cancer Hospital, which helps patients get discounts from drugmakers and foundations ¹. Also at risk, the report said, are free cancer care for patients with incomes up to 250% of the federal poverty level and discounted care for those up to 550% ¹.

Medicaid, the joint federal-state program for people with low incomes, is the second pressure. Third Way, a center-left think tank, estimated that Connecticut hospitals treating a higher share of low-income patients could lose $378 million a year from cuts scheduled to begin next year ¹. Yale New Haven Health expects to lose more than $100 million from those cuts, on top of a Medicaid payment shortfall of more than $436 million last year ¹.

Paul Kidwell of the Connecticut Hospital Association said hospitals are still connecting people with low-cost insurance and financial aid. "But that should never stop a patient from coming to seek care," he said of the financial pressure ¹.

The record in Washington

President Trump tried a similar cut in his first term, and the Supreme Court overturned it in 2022 because CMS had not first surveyed hospital costs ³⁴. An executive order he signed in April 2025 led to the new survey ³. The American Hospital Association told CMS Administrator Mehmet Oz in August that the survey is legally invalid ⁶.

The association's letter also opposes a separate plan to recover past 340B payments faster, which it said would be a 500% annual increase in recoupment per hospital and could cost millions of dollars each year for some hospitals ⁶.

Some of the pushback comes from the president's own party. Six New York House Republicans, led by Rep. Mike Lawler, asked Oz in an Aug. 31 letter to reconsider ⁷⁸. Lawler's office estimated about $900 million in yearly reductions for New York's 340B hospitals ⁷.

Our principal concern is that this steep payment change could ultimately impact their ability to maintain services

On the Democratic side, our search found no statement aimed at this specific rule, and the CT Insider report quoted no lawmakers from either party ¹. Three Democrats, Sens. Tammy Baldwin, Tim Kaine and John Hickenlooper, joined three Republicans on a bipartisan 340B overhaul bill in August, but one trade publication's summary of it lists no provision stopping the Medicare cut ¹⁰.

Connecticut Sen. Chris Murphy did warn about the broader squeeze in an August 2025 report on the Medicaid cuts in the budget law ⁹.

This means hospitals will inevitably become more distressed.

The pattern is that several federal decisions are landing on the same hospitals at once. A separate proposal from July would limit the taxes states charge health care providers, a change CMS projects could reduce that revenue by about $198.7 billion nationwide ¹. Voters will not decide the Medicare rule on Tuesday, but the Congress they elect will decide whether to step in on it and whether to leave the Medicaid cuts in place.

The Record

1. Jul 2, 2026CMS proposes paying for 340B drugs at the average sales price minus 33.4%, down from plus 6% ²⁴.
2. Jul 29, 2026KFF finds safety-net hospitals would lose 5.8% of outpatient Medicare revenue while for-profit hospitals would gain 7.4% ⁴.
3. Aug 26, 2026The American Hospital Association urges Oz not to finalize the cut, calling the cost survey legally invalid ⁶.
4. Aug 31, 2026Rep. Mike Lawler and five other New York House Republicans ask Oz to reconsider the proposal ⁷⁸.
5. Oct 30, 2026Connecticut hospitals warn the cuts could threaten cancer aid; a CMS decision is reported to be expected in early November ¹.

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<h2>Medicare drug-pay cut could trim copays and strain cancer aid; decision expected soon</h2> <p><em>By The GOP Files Kitchen-Table Desk. This article first appeared on <a href="https://thegopfiles.com/story/medicare-drug-pay-cut-could-trim-copays-and-strain-cancer-aid-decision-expected">The GOP Files</a> on Sunday, November 1, 2026.</em></p> <p>Connecticut hospital systems are warning that a proposed Medicare payment cut could threaten financial help and other programs for cancer patients. Hartford HealthCare estimates it would lose $79 million across its eight hospitals, CT Insider reported Friday . Citing the trade publication Modern Healthcare, the report said a federal decision is expected in early November .</p> <p>The plan involves a real tradeoff. The Centers for Medicare &amp; Medicaid Services (CMS), the agency that runs Medicare, estimates patients would pay $1.15 billion less for these drugs in the first year . But an analysis by KFF, a nonpartisan health research group, found that the same plan would take revenue from safety-net hospitals while raising it for for-profit hospitals .</p> <h2>What the rule would change</h2> <p>Under a federal program called 340B, hospitals serving low-income patients can buy drugs at a discount . Medicare now pays those hospitals the drug&#39;s average sales price plus 6% . The proposal would pay the average sales price minus 33.4%, starting Jan. 1, 2027, a 37% reduction by KFF&#39;s count .</p> <p>CMS says a 2026 survey of hospital drug costs supports the change. It found that a patient&#39;s share of the bill, typically 20%, was sometimes more than the hospital&#39;s whole price for the drug . The Associated Press described a policy draft&#39;s example using the prostate cancer drug Lupron Depot. A hospital can buy a dose for roughly $700, receive about $4,000 from Medicare and collect another $1,000 from the patient .</p> <blockquote><p>Medicare patients should not pay coinsurance as though the discount did not exist.</p><p>&mdash; Casey B. Mulligan, chief economist and chief regulatory officer, U.S. Department of Health and Human Services, in an opinion piece</p></blockquote> <p>The agency estimates the average older adult with Medicare Part B, which covers outpatient care, who gets one of these drugs would save $800 a year in copays . In an example from Mulligan&#39;s opinion piece, the patient&#39;s share of a drug with a $1,000 average sales price would fall from $212 to $133.20 . The Community Oncology Alliance, which represents community cancer practices, applauds the change, arguing that overpayment pushes cancer care into higher-cost hospital settings .</p> <h2>Who would pay for it</h2> <p>The savings do not simply leave the hospital system. Payments for other outpatient hospital services would rise 8.44% across the board to balance the drug cut, and patients who use those services would owe more . Maureen Testoni, who heads the hospital trade group 340B Health, argues the plan is therefore not about lowering costs for seniors .</p> <p>That shift would create winners and losers. KFF projects a 5.8% net loss in outpatient Medicare revenue for safety-net hospitals, which serve many low-income patients, and a 7.4% gain for for-profit hospitals, which are not eligible for 340B . Rural sole community hospitals, children&#39;s hospitals and a class of cancer hospitals exempt from Medicare&#39;s standard payment system would be spared the cut .</p> <p>That matters because safety-net hospitals already have lower operating margins than average, KFF notes, and they may also be hit hard by the Medicaid reductions in the 2025 budget law .</p> <h2>The warnings from Connecticut</h2> <p>Hartford HealthCare told CMS that hospitals could lose savings they use for charity care and cancer services . Trinity Health, which operates Saint Francis, Saint Mary&#39;s and Johnson Memorial hospitals in Connecticut, said it would lose $109 million across its 340B hospitals nationwide .</p> <blockquote><p>This proposal threatens beneficiary access to those essential resources.</p><p>&mdash; Gerald Boisvert, senior vice president for financial operations, Hartford HealthCare, in a letter to CMS</p></blockquote> <p>Yale New Haven Health said cuts could threaten the Medication Assistance Program at Smilow Cancer Hospital, which helps patients get discounts from drugmakers and foundations . Also at risk, the report said, are free cancer care for patients with incomes up to 250% of the federal poverty level and discounted care for those up to 550% .</p> <p>Medicaid, the joint federal-state program for people with low incomes, is the second pressure. Third Way, a center-left think tank, estimated that Connecticut hospitals treating a higher share of low-income patients could lose $378 million a year from cuts scheduled to begin next year . Yale New Haven Health expects to lose more than $100 million from those cuts, on top of a Medicaid payment shortfall of more than $436 million last year .</p> <p>Paul Kidwell of the Connecticut Hospital Association said hospitals are still connecting people with low-cost insurance and financial aid. &quot;But that should never stop a patient from coming to seek care,&quot; he said of the financial pressure .</p> <h2>The record in Washington</h2> <p>President Trump tried a similar cut in his first term, and the Supreme Court overturned it in 2022 because CMS had not first surveyed hospital costs . An executive order he signed in April 2025 led to the new survey . The American Hospital Association told CMS Administrator Mehmet Oz in August that the survey is legally invalid .</p> <p>The association&#39;s letter also opposes a separate plan to recover past 340B payments faster, which it said would be a 500% annual increase in recoupment per hospital and could cost millions of dollars each year for some hospitals .</p> <p>Some of the pushback comes from the president&#39;s own party. Six New York House Republicans, led by Rep. Mike Lawler, asked Oz in an Aug. 31 letter to reconsider . Lawler&#39;s office estimated about $900 million in yearly reductions for New York&#39;s 340B hospitals .</p> <blockquote><p>Our principal concern is that this steep payment change could ultimately impact their ability to maintain services</p><p>&mdash; Mike Lawler, U.S. representative, R-New York, lead signer of a letter to CMS</p></blockquote> <p>On the Democratic side, our search found no statement aimed at this specific rule, and the CT Insider report quoted no lawmakers from either party . Three Democrats, Sens. Tammy Baldwin, Tim Kaine and John Hickenlooper, joined three Republicans on a bipartisan 340B overhaul bill in August, but one trade publication&#39;s summary of it lists no provision stopping the Medicare cut .</p> <p>Connecticut Sen. Chris Murphy did warn about the broader squeeze in an August 2025 report on the Medicaid cuts in the budget law .</p> <blockquote><p>This means hospitals will inevitably become more distressed.</p><p>&mdash; Chris Murphy, U.S. senator, D-Connecticut, in an August 2025 report on the Medicaid cuts</p></blockquote> <p>The pattern is that several federal decisions are landing on the same hospitals at once. A separate proposal from July would limit the taxes states charge health care providers, a change CMS projects could reduce that revenue by about $198.7 billion nationwide . Voters will not decide the Medicare rule on Tuesday, but the Congress they elect will decide whether to step in on it and whether to leave the Medicaid cuts in place.</p> <p><em>Read the original, with every source linked, at <a href="https://thegopfiles.com/story/medicare-drug-pay-cut-could-trim-copays-and-strain-cancer-aid-decision-expected">thegopfiles.com</a>. Republished under The GOP Files' <a href="https://thegopfiles.com/republish">free republishing terms</a>.</em></p> <img src="https://thegopfiles.com/api/rp/medicare-drug-pay-cut-could-trim-copays-and-strain-cancer-aid-decision-expected.gif" alt="" width="1" height="1" style="border:0;width:1px;height:1px">

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Sources

1. CT Insider via Yahoo News, “Connecticut hospitals warn federal cuts could threaten cancer aid, other patient support programs” (2026-10-30). yahoo.com/news/us/articles/connecticut-hospitals-warn-federa
2. Centers for Medicare & Medicaid Services, “Calendar Year 2027 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Proposed Rule (CMS-1850-P)” (2026-07-02). cms.gov/newsroom/fact-sheets/calendar-year-2027-hospital-out
3. AP via Spectrum News, “Trump administration proposes a rule it says could save Medicare patients $1.1 billion on drugs” (2026-07-02). spectrumlocalnews.com/us/snplus/politics/2026/07/02/trump-ad
4. KFF, “Medicare's Proposed Cut to 340B Drug Payments Would Hit Safety-Net Hospitals While Benefiting For-Profit Hospitals” (2026-07-29). kff.org/health-costs/medicares-proposed-cut-to-340b-drug-pay
5. STAT (First Opinion), “How CMS plans to fix a major flaw in the 340B drug discount program” (2026-10-08). statnews.com/2026/10/08/340b-drug-discount-program-cms-refor
6. American Hospital Association, “AHA Urges CMS Not to Finalize OPPS Proposals to Accelerate Clawback and Cut 340B Reimbursements” (2026-08-26). aha.org/letterscomments/2026-08-26-aha-urges-cms-not-finaliz
7. Office of Rep. Mike Lawler, “Lawler Demands CMS Reconsider 340B Payment Cuts to Safety Net Hospitals” (2026-08-31). lawler.house.gov/news/documentsingle.aspx?DocumentID=6407
8. Association of American Medical Colleges, “House Republicans Express Concern With Proposed Medicare Cuts for 340B Drugs” (2026-09-04). aamc.org/advocacy-policy/washington-highlights/house-republi
9. Connecticut Public, “Medicaid cuts could drive rural hospitals to seek private equity, Murphy warns” (2025-08-22). ctpublic.org/news/2025-08-22/medicaid-cuts-could-drive-rural
10. AJMC, “Senate Unveils Sweeping Bill to Reform 340B Drug Program” (2026-08-10). ajmc.com/view/senate-unveils-sweeping-bill-to-reform-340b-dr
11. 340B Health, “Medicare Drug Pay Cuts Take Aim at 340B Hospitals Serving America's Most Vulnerable Patients” (2026-07-02). 340bhealth.org/newsroom/medicare-drug-pay-cuts-take-aim-at-3
12. Targeted Oncology, “CMS Proposes Cut to 340B Drug Payments in 2027 Outpatient Rule” (2026-07-07). targetedonc.com/view/cms-proposes-cut-to-340b-drug-payments-

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