Washington, D.C. — The White House has released its proposed budget for fiscal year 2027, and the numbers aren’t pretty for the healthcare industry. The Trump administration is asking Congress to cut $15.8 billion — roughly 12.5% — from the Department of Health and Human Services, dropping the agency’s discretionary funding from about $126.9 billion to $111.1 billion. For nursing homes already navigating a CMS agency stretched thin on staffing, the proposal raises serious questions about what federal oversight of long-term care will look like in the years ahead.
The budget, released Friday, targets several agencies that directly or indirectly touch long-term care. The National Institutes of Health would absorb a $5 billion haircut, dropping to $41 billion. The National Institute on Minority Health and Health Disparities — which funds research on underserved populations, including many nursing home residents — would be eliminated entirely, with the White House calling it “replete with DEI expenditures.”
The Agency for Healthcare Research and Quality, which produces much of the safety and quality research that informs nursing home care standards, would lose $129 million. The administration says AHRQ’s work is “wasteful or duplicative” of NIH research. Critics disagree, but the agency has already lost more than half its staff over the past year and a half.
Beyond individual agencies, the budget proposes eliminating and consolidating programs across HRSA, SAMHSA, the CDC, and the Office of the Assistant Secretary for Health — a package the White House says would save roughly $5 billion.
Will Congress go along?
Probably not — at least not in full. When the Trump administration proposed similar cuts last year, lawmakers ultimately passed a budget that increased HHS funding. The president’s budget is largely a statement of priorities, not a done deal.
But long-term care advocates aren’t breathing easy. Congressional Republicans have already moved forward with a budget reconciliation process, and broad Medicaid cuts remain on the table. The concern among nursing home operators isn’t just the specific line items in this proposal — it’s the direction of travel. Each successive budget signals that federal health spending is a target, and Medicaid, which covers more than 60% of nursing home residents, isn’t immune.
Industry sources say the real risk isn’t the discretionary cuts in this document — it’s what comes next. Reconciliation, which only needs a simple majority in the Senate, could push through Medicaid reductions that a standard budget process couldn’t. The White House has made no secret of its interest in moving entitlement spending to the states.
“The 2027 Budget builds on the President’s vision by continuing to constrain non-defense spending,” Russell Vought, director of the Office of Management and Budget, wrote in the proposal — while defense spending would jump 44%, bringing the Pentagon’s discretionary budget to $1.5 trillion.
For nursing homes, that trade-off is hard to ignore. The populations they serve depend almost entirely on federal programs to cover the cost of care. When those programs face pressure — whether from formal budget cuts or the slow erosion of agency capacity — it’s residents who end up feeling it first.
