1、 BofA Securities does and seeks to do business with issuers covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making the

2、ir investment decision.Refer to important disclosures on page 97 to 99.Analyst Certification on page 93.Valuation&Risk on page 92.12852075 Quarterly Outlook Report Company&Health Policy Update and Outlook Industry Overview Fears related to healthcare reimbursement cuts from the Reconciliation bill w

3、ere more moderate than feared given key provisions will be implemented in 2027-28 and amortize over 5-10 years.Near-term impacts of the bill could be a net positive due to the rural provider relief fund,however we await details.With Reconciliation volatility behind us,our attention now shifts to pot

4、ential pharma tariffs and MFN drug pricing proposals.Legislative/regulatory highlights Congress passed the“One Big Beautiful Bill Act”(OBBBA)Reconciliation package.Medicaid reductions estimated at$1 trillion over 10 years,along with more than$100 billion in reductions to ACA exchange coverage.The bi

5、ll also includes a new$50 billion rural provider relief fund starting in 2026.Overall,the package will have significant impacts for hospital providers and managed care,as Medicaid funding is reduced over 10 years,and healthcare coverage is expected to decline.CMS released its proposed CY2026 Medicar

6、e payment regs,including larger than expected payment adjustments for home health(proposed-6.4%update),physicians(+3.3%/3.8%update),and hospital outpatient payments(flat update).Upcoming themes Trump Administration expected to announce new Section 232 tariffs on pharmaceutical products by August 1.P