The Trump administration proposed to decrease discretionary funding for the Department of Health and Human Services (HHS) by 12.5%, to $111 billion, in fiscal year (FY) 2027.
As in FY 2026, the administration also proposes to reorganize HHS by consolidating the Health Resources and Services Administration, Substance Abuse and Mental Health Services Administration, and select Centers for Disease Control and Prevention programs. The new Administration for a Healthy America would prioritize nutrition, food and drug quality and safety standards, and chronic condition prevention.
The FY 2027 budget also proposes to cut $5 billion from the National Institutes of Health and eliminate several departments.
Centers for Medicare & Medicaid Services
CMS’ core priorities for 2027 include adopting new technologies and pursuing solutions for fraud, waste, and abuse in the federal health program. The budget includes funding for modernizing IT and data systems, oversight functions, and staffing.
CMS requests $6.848 billion in program management funding, about $1.434 billion less than 2026.
340B Drug Pricing Program
As part of the proposed HHS reorganization, the budget again proposes to move the Office of Pharmacy Affairs and the 340B program to CMS. The administration requests $20.5 million in FY 2027, an increase of $8.3 million above 2026 enacted levels. CMS justifies the increase because it enables the agency to manage “growing program complexity and areas of heightened risk through enhanced policy development, guidance, and operational support.”
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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