Federal Health Programs Must Stop Using QALYs by 2027: What That Means for Coverage Decisions

This new legislation, the Protecting Health Care for All Patients Act of 2025, makes a major change to how federal health programs decide what care to cover and how much to pay for it. The core of the bill, effective January 1, 2027, is a firm ban on using metrics like Quality-Adjusted Life Years (QALYs) or any similar measurement that puts a lower value on the life of someone who is older, disabled, or terminally ill. This rule applies across the board—to Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), and even private Medicare Advantage and Part D plans (SEC. 2).

The End of the 'Value' Scorecard

So, what exactly is a QALY? Think of it as a way for health economists to calculate the cost-effectiveness of a treatment. If a treatment costs $50,000 and is expected to give a patient one year of perfect health, that’s $50,000 per QALY. The problem is that if you have a disability or a chronic condition, the metric assumes your current quality of life is lower than a perfectly healthy person’s. Therefore, a treatment that extends your life might generate fewer “quality-adjusted” years than the same treatment for a younger, non-disabled person. This bill stops federal programs from using that math to deny coverage. For anyone living with a chronic illness or disability, this is a significant change aimed at ensuring their care isn't automatically deemed 'too expensive' or 'low value' simply because of their baseline health status (SEC. 2).

Funding Public Health, Guaranteed

Beyond the QALY ban, the Act also locks in specific funding increases for the Prevention and Public Health Fund, which is part of the Affordable Care Act. This fund supports things like community health centers, vaccine programs, and public health infrastructure—the stuff that keeps us healthy before we ever need a hospital. Instead of relying on the old funding structure, the bill sets concrete dollar amounts: $1.1 billion for fiscal years 2026 and 2027, increasing to $1.327 billion for 2028 and 2029, and finally jumping to $1.526 billion for 2030 and 2031 (SEC. 3). This provides much-needed stability and growth for public health initiatives that often get squeezed in budget negotiations.

The Cost Control Conundrum

While the ethical reasoning behind banning QALYs is clear—preventing discrimination—the practical impact on the healthcare budget is worth watching. QALYs, for all their flaws, were a tool used by administrators in Medicare and Medicaid to manage costs and decide where to prioritize resources. By removing this tool, the bill explicitly prohibits the use of waivers or demonstration projects (like Section 1115 waivers often used in Medicaid) to try and bypass this ban. This means administrators lose a key lever for cost control, which could lead to higher overall program spending. For taxpayers, this is the trade-off: fairer coverage decisions, but potentially less ability to push back on the cost of very expensive new treatments (SEC. 2).

Keeping Tabs on the Impact

Finally, the legislation mandates that the Comptroller General of the United States must produce an annual report for Congress. This report is specifically tasked with detailing the negative effects that using QALYs has on access to care for individuals with intellectual and developmental disabilities. Even though the bill bans the use of QALYs in federal programs, this reporting requirement ensures that there is continued, focused oversight on how these types of cost-effectiveness tools—and their potential substitutes—might still create barriers for vulnerable groups (SEC. 4).