The Trump administration’s fiscal year 2027 budget released April 3 proposes a $15.8 billion cut to HHS, while requesting $1.5 trillion for defense, a 44% increase. The budget would dramatically reshape federal spending priorities across healthcare and national security.
It would also restructure the federal health bureaucracy, eliminating familiar agencies, cutting $5 billion in programs deemed wasteful and replacing them with a new entity called the Administration for a Healthy America.
Below are nine notes on the fiscal year 2027 budget:
1. HHS faces a $15.8 billion cut. The budget requests $111.1 billion for HHS in fiscal 2027, representing a 12.5% reduction from 2026. The administration framed the cut as a move to eliminate “bloated, woke and inefficient programs” and refocus on core priorities.
The budget comes nine months after President Donald Trump signed into law the One Big Beautiful Bill Act, which outlined nearly $1 trillion in Medicaid cuts and restructured several key healthcare programs. Among the most contentious aspects of the OBBBA were its cuts to Medicaid; the legislation adds work requirements, more frequent redeterminations, and adds new limits on state-directed Medicaid managed care payments and oversight.
President Trump has also signaled a broader shift in how the federal government approaches healthcare funding. Speaking at an April 1 White House event, he said it is “not possible” for the federal government to fund Medicare, Medicaid and childcare, arguing this responsibility should be on individual states while federal resources focus on priorities such as national defense, NBC News reported April 2.
2. NIH loses $5 billion; 3 institutes eliminated. The administration alleges that the National Institutes of Health “broke trust of the American people with wasteful spending, misleading information, risky research, and the promotion of dangerous ideologies that undermine public health.” At the program level, the budget requests $41 million in funding for NIH research, a roughly $5 billion cut over 2026 funding. The proposal calls for the elimination of the National Institute on Minority Health and Health Disparities, Fogarty International Center and the National Center for Complementary and Integrative Health.
The proposed cut is significantly smaller than the administration sought in its 2026 budget. That plan proposed cutting NIH’s funding by $18 billion. That proposal was ultimately rejected by Congress. Last year the administration also proposed consolidating a significant number of the NIH’s 27 institutions and centers, which lawmakers also rejected.
3. A new agency replaces several familiar ones: the Administration for a Healthy America. The budget establishes the Administration for a Healthy America as part of a “major reorganization” of HHS.
AHA would consolidate functions previously spread across the Health Resources and Services Administration, the Substance Abuse and Mental Health Services Administration, the CDC, and the Office of the Assistant Secretary for Health. The goal is to bring nutrition services, food safety, chronic disease prevention, and behavioral health under one roof, cutting $5 billion in programs the budget described as duplicative, inefficient, or misaligned with the Trump administration’s policies. It also creates a new $4.1 billion Behavioral Health Innovation Block Grant to replace several existing behavioral health funding streams, which the administration criticized for funding programs including transgender health services and DEI initiatives.
4. Global health funding cut by $4.3 billion — PEPFAR restructured. The budget cuts $4.3 billion from global health programs, leaving $5.1 billion in total. The Trump administration framed this as a shift from “Beltway Bandit” contracts toward an “America First Global Health Strategy.” The budget said roughly 40% of the President’s Emergency Plan for AIDS Relief funds under the Biden administration supported actual service delivery like medications, testing, commodities and healthcare workers, with the remainder consumed by duplicated administrative costs and supply chain overhead. PEPFAR would operate through unified bilateral compacts moving forward designed to improve efficiency. The budget eliminates funding for certain reproductive health services, circumcision programs and LGBTQ-related health services under this restructuring.
5. The Hospital Preparedness Program would be eliminated. The $240 million Hospital Preparedness Program — housed within the Administration for Strategic Preparedness and Response — is slated for elimination. The budget argues its activities can be absorbed by CDC’s Public Health Emergency Preparedness Program and stronger state efforts. HPP has been the main federal platform through which hospitals fund surge capacity planning, disaster response infrastructure and healthcare coalition development. Its potential elimination comes as hospitals are still processing the operational and financial lessons of the COVID-19 pandemic, and as preparedness leaders have warned about the sector’s vulnerability to future events.
6. VA healthcare investment spikes. Not all healthcare news in the budget is a cut. The VA would receive a $1.5 billion, or 9%, funding boost to $144.9 billion, including $4.2 billion for EHR modernization and $130 million for AI and automation investments in veterans claims processing. The department’s Oracle Health EHR implementation — which could cost nearly $50 billion — and its growing investment in AI-driven revenue cycle functions follows trends playing out across the broader healthcare landscape. The VA is set to install the EHR at 13 medical centers this year, beginning with four hospitals in Michigan, and could finish the program by 2031. The project was put on hold in 2023 as the agency and Oracle worked out technical and patient safety concerns.
7. AHRQ is effectively eliminated. The Agency for Healthcare Research and Quality would see a proposed $129 million cut, eliminating most of the agency’s current operations. The administration characterizes much of AHRQ’s research portfolio as duplicative of work already conducted at NIH and proposes moving select statistical functions into a newly created HHS Office of Strategy.
8. LIHEAP scrapped — again. For the sixth time, the administration is proposing to end the Low Income Home Energy Assistance Program. The administration argues that the $4 billion program is unnecessary because states have policies preventing utility disconnection for low-income households.
9. WHO and Pan-American Health Organization would be defunded entirely. The budget provides zero funding for the World Health Organization, after the U.S. withdrew in late January. It also cuts funding for the Pan-American Health Organization.
“These corrupt organizations have shown no independence from inappropriate political influences, such as when the WHO aided in the COVID-19 coverup,” the budget said.
The 92-page budget proposal is available here.
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