Democratic States Challenge Exchange Rule Finalization
Democratic states sued the Trump administration today over the finalization of the Exchange rule that will significantly tighten the enrollment season and dampen eligibility. Provisions in the budget reconciliation bill will further clampdown on enrollment.
The states are arguing that the administration did not follow all regulatory rules before finalization and that the rule is arbitrary and capricious. They also argue that the changes will boost the uninsured rate and cost states a great deal of money.
In related news, the administration supplied data on improper enrollments in government programs. Analyzing 2024 enrollment data, the administration found 1.2 million enrolled in Medicaid or the Children’s Health Insurance Program in multiple states, and 1.6 million enrolled in one of those programs and an Exchange plan. Data-sharing and procedural requirements in the budget bill seek to further address this issue.
As well, the Centers for Medicare and Medicaid Services (CMS) said it won’t approve or renew state programs to promote multiyear, continuous Medicaid enrollment or health professional workforce development. Nine states have continuous enrollment waivers for children and eight states have them for adults.
Last, some lawmakers want to help out Medicare doctors by revisiting the Medicare rate fix in the budget reconciliation bill. The House version had a better solution (although it was by no means perfect), but it was watered down by the Senate to a one-time override increase for 2026. Some suggest Medicare Advantage (MA) upcoding in risk adjustment could help pay for any changes.
Additional articles: https://www.modernhealthcare.com/legal/mh-aca-final-rule-lawsuit/ and https://thehill.com/policy/healthcare/5407442-democratic-ags-sue-trump-administration-obamacare-changes/ and https://www.beckerspayer.com/payer/cms-2-8m-people-have-enrolled-in-medicaid-aca-plans-in-multiple-states/ and https://www.modernhealthcare.com/politics-regulation/mh-1115-waivers-medicaid-enrollment-cms/ and https://www.beckerspayer.com/payer/cms-to-end-medicaid-continuous-eligibility-waivers-5-things-to-know/ and https://www.fiercehealthcare.com/payers/cms-warns-states-new-medicaid-waiver-expectations and https://www.modernhealthcare.com/politics-regulation/mh-medicare-doctor-pay-tax-law/
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#medicaid #exchanges #chip #1115waivers #coverage #healthcare #cms #budgetreconciliation #medicare #providers #primarycare
Elevance Struggles in Q2; Cuts Guidance
UnitedHealthcare and Centene were the first to pull investor guidance. Now, Elevance Health joins the list by cutting guidance. What is interesting is that, like UnitedHealthcare earlier, Elevance did not previously report major financial challenges.
Elevance blames heightened Medicaid and Exchange plan spending for its second quarter challenges. Its medical loss ratio reached 88.9%, up from 86.3% in Q2 2024.
Net income plummeted 24.2% to $1.7 billion. Revenue did increase 13.4% to $49.8 billion during the quarter. Elevance expects troubles to continue in 2026 due to the budget reconciliation cuts.
Check out my blog from today on this topic: https://www.healthcarelabyrinth.com/health-plans-and-their-finances-post-the-big-beautiful-bill/ .
In other news, PricewaterhouseCoopers’ Health Research Institute predicts group healthcare costs are expected to increase by 8.5% in 2026. The blame is being levied on the fallout from the budget reconciliation bill, rising drug costs, and behavioral health claims. Biosimilar uptake could offer some relief.
Additional articles: https://www.modernhealthcare.com/insurance/mh-elevance-health-guidance-medicaid-exchange/ and https://www.healthcaredive.com/news/elevance-cuts-2025-guidance-aca-medicaid-costs-obbb/753270/ and https://www.beckerspayer.com/payer/elevance-health-cuts-earnings-guidance/ and https://www.modernhealthcare.com/providers/mh-healthcare-costs-pwc-2026/
(Some articles may require a subscription.)
#elevancehealth #margins #employercoverage #medicaid #exchanges
— Marc S. Ryan
