Happy Monday! From high-stakes battles over ACA subsidies to seismic moves in the biotech sector, this week’s developments have major implications for payers, providers, patients, and politics. Here’s what we’re tracking.

In this week’s Nimitz Health:

• Federal News: The race for an ACA plan, abortion pill scrutiny, and $208M in new school mental health grants

• State News: CA prison health vacancies, NC considers prevention-first care, NM text-based hotline, and FL vaccine mandate fights

• Industry News: • Biotech M&A boom, Eli Lilly’s obesity drug success, and gene-editing controversy resurfaces

WHO’S HAVING EVENTS THIS WEEK?

Tuesday, December 16th

• House Rules: “H.R. 498 – Do No Harm in Medicaid Act; H.R. 3492 – Protect Children's Innocence Act; H.R. ____ – Lower Health Care Premiums for All Americans Act” at 2 pm. Watch here.

Wednesday, December 17th

• *House Energy & Commerce: “Examining Biosecurity at the Intersection of AI and Biology” at 10:15 am. Watch here.

• *Joint Economic Committee: “Realigning Healthcare Incentives to Improve Outcomes and Reduce Costs” at 2:30 pm. Watch here.

Thursday, December 18th

• *House Energy & Commerce: “Examining the Impact of EPA’s CERCLA Designation for Two PFAS Chemistries and Potential Policy Responses to Superfund Liability Concerns” at 10 am. Watch here.

*Will be covered by Nimitz Health. Please email [email protected] if you would like a readout of any other hearings.

NEWS DRIVING THE WEEK

Federal News

With less than three weeks left before enhanced ACA subsidies expire on December 31, Congress remains paralyzed. A House vote is expected late this week on a GOP-led health care package that technically allows a vote on an amendment to extend the subsidies, but leaders expect that amendment to fail. If no extension passes, over 20 million Americans could face massive premium hikes, with costs rising up to 400% for some, particularly older enrollees in rural states like West Virginia and Wyoming. Despite pressure from Democrats and moderate Republicans, hardliners in the GOP continue to block efforts to extend the subsidies, arguing they distort insurance markets and inflate federal spending.

The Republican health plan unveiled last week focuses on expanding HSAs and offering skimpier coverage options, which critics warn would destabilize marketplaces by pulling healthy people into limited-benefit plans. While Democrats have unified around messaging that paints GOP inaction as a threat to middle-class families, Republicans are split, with moderates fearing electoral backlash and conservatives pushing to let the subsidies lapse. The policy uncertainty is already complicating insurer rate filings and market projections for 2026.

Elsewhere on Capitol Hill, abortion and environmental regulation converged in an unusual new campaign as Students for Life launched a push to classify mifepristone as a water contaminant, urging the EPA to treat abortion pills like environmental pollutants. While experts say there’s little legal basis for such regulation, the campaign reflects how anti-abortion groups are trying to expand their tactics beyond the courts and state legislatures.

At a recent oversight hearing, Senator Bill Cassidy (R-LA) accused the FDA of dodging GOP questions about abortion pill data and approval processes. The tension underscores the growing Republican scrutiny of FDA decision-making, especially following the agency's fast-tracked approval of a second generic version of mifepristone.

Meanwhile, federal investments in mental health have resumed after a politically fraught spring. The Department of Education announced $208 million in new school-based mental health grants following a Trump-era cancellation of over 200 prior awards. The newly reallocated funds aim to address critical shortages in school psychologists and rural mental health providers, particularly in the wake of high-profile school shootings and rising adolescent mental health concerns.

Finally, the GOP's internal division over healthcare is spilling into battleground midterms. Candidates in swing districts are struggling to explain the party’s stance on ACA subsidies and rural hospital funding—issues with real consequences for constituents, especially as 400 hospitals are now flagged as “at risk” due to potential Medicaid cuts and waning federal support.

fState News

Across states, cost pressures and workforce shortages continue to shape the health care landscape. In California, a state audit revealed that despite offering six-figure salaries and bonuses up to $42,000, prison health facilities have 30–50% vacancy rates. Atascadero State Hospital lost 90% of its staff to attrition over the last three years, despite being one of the best-paying public health employers in the country. The audit attributed failures to poor oversight, dangerous working conditions, and an over-reliance on expensive contract labor.

North Carolina is attempting to bend the cost curve with a new strategy: investing in members’ health before expensive conditions develop. The State Health Plan has started rolling out chronic disease management, early screenings, and wellness incentives in hopes of reducing future high-cost claims. Officials are also exploring predictive analytics to flag high-risk enrollees before they rack up hospital bills.

In New Mexico, the state health department has added a texting option to its health helpline, staffed by 20 nurses. The helpline assists with primary care, telehealth access, and prescriptions, including birth control and addiction support. The move is designed to expand accessibility, particularly in underserved and rural areas.

Florida also made headlines with an increasingly politicized vaccine meeting that previewed battles ahead over potential mandates and public health authority. State officials suggested a return to local control over childhood vaccine schedules, foreshadowing likely clashes in future legislative sessions.

Industry News

The biotech sector is in rally mode. The Nasdaq Biotech Index is up more than 30% this year, powered by mergers and acquisitions ahead of the 2027–2028 patent cliff. Hedge funds like Perceptive Advisors and Caligan Partners saw year-to-date returns of +75% and +92%, respectively. Pfizer’s $10B acquisition of Metsera and Lilly’s aggressive expansion signal a race to refill drug pipelines as blockbuster patent expirations loom. Read more here.

Eli Lilly, in particular, is drawing attention with its experimental obesity drug Retatrutide, which showed nearly 29% average body weight reduction in Phase III trials. Some patients were even withdrawn for losing too much weight. The therapy also reduced joint pain in patients with obesity and osteoarthritis, positioning Lilly at the forefront of a lucrative GLP-1 market alongside Zepbound and Orforglipron.

Elsewhere, the infamous Chinese scientist He Jiankui, jailed for creating gene-edited babies, is attempting a biotech comeback. Despite international outrage and Chinese surveillance, he has founded a new company in South Africa, aiming to resume embryo-editing research. His reemergence is being closely watched by ethics boards and international regulators.

FOR FUN

Staying in town over the holidays? Have breakfast with Santa at Mount Vernon! Get your tickets for the December 20th brunch here.

JOIN THE NIMITZ NETWORK!

Enjoying our updates? Don’t keep it to yourself — forward this email to friends or colleagues who’d love to stay informed. Please subscribe to our other publications by clicking below: