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CMS Actuary Releases 2024 Healthcare Spending

Each year, the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary releases annual healthcare expenditures for the prior year. This year the release was delayed due to the government shutdown.

The Actuary found that the U.S. spent $5.28 trillion on healthcare in 2024, a 7.2% increase from the prior year. The robust growth shows the challenges ahead for healthcare. It was the second consecutive year costs trended up more than 7%. Healthcare accounted for 18% of gross domestic product (GDP) in 2024, up slightly from 2023.

Spending on hospital care grew 8.9% to $1.6 trillion. Spending on physician and clinical services increased 8.1% to $1.1 trillion. The Actuary said prices are a factor but non-price factors, such as utilization, were the driver. CMS’ actuaries attributed about 1% of the gain to population growth, 2.5% to price increases, and 3.6% to remaining nonprice factors.

I will have a deep dive into the Actuary’s report next week at my blog site.

The Census Bureau also released healthcare statistics this week based on the 2024 Current Population Survey. The typical working family in the U.S. spent $3,960 on healthcare-related costs in 2024, including premiums and out-of-pocket expenses. One in eight working families spent more than 10% of their income on healthcare. Ten percent of working families paid more than $14,800 in premiums and out-of-pocket costs. The low income and those from rural areas spent the greatest percentage of income on healthcare.

Additional articles: https://www.modernhealthcare.com/politics-regulation/mh-health-spending-2024-cms/ and https://www.healthcaredive.com/news/us-healthcare-spending-2024-cms-health-affairs/809578/ and https://www.medpagetoday.com/publichealthpolicy/medicare/119435 and https://www.beckershospitalreview.com/finance/average-us-family-spent-nearly-4k-on-healthcare-in-2024-report/

(Some articles may require a subscription.)

#healthcare #expenditures #nhed #cms

https://www.fiercehealthcare.com/finance/cms-us-total-healthcare-spending-rose-72-53t-2024

Exchange Compromise Is Slipping

Sen. Bernie Moreno, R-OH, a leading supporter of a compromise on extending enhanced Exchange premium subsidies, says a deadline of the end of January has been set for having a compromise framework ready and that the main holdup remains abortion. The earlier goal of having a bill this week will not be met.

Meanwhile, the Republican Study Committee, the largest caucus of conservatives in the House, unveiled a framework for a second reconciliation bill. Such a bill would only need a majority in each house to become law. The bill addresses affordability broadly and includes some provisions on healthcare.

• Exchange subsidies would migrate from going to health plans in the Exchange to Health Savings Accounts (HSAs).
• Cost-sharing reduction subsidies in the Exchange would be appropriated again, although that was ruled out of compliance with the Senate’s Byrd rule on the One Big Beautiful Bill Act passage in 2025.
• Pharmacy benefit manager (PBM) reform would be implemented.
• Penalties would be assessed on states that do not prohibit immigrants in the country illegally from enrolling in Medicaid.
• Other new regulations and cuts to Medicaid would also be included.

Additional article: https://thehill.com/homenews/house/5686728-gop-housing-health-energy-reforms/?tbref=hp

#exchanges #healthcare #coverage #pbms #medicaid

https://thehill.com/homenews/senate/5687461-senate-obamacare-compromise-deadline

Trump May Veto Subsidy Bill If Passes; Exchange Enrollment Down So Far

The Centers for Medicare & Medicaid Services (CMS) reports that about 22.8 million consumers have signed up for 2026 individual market Exchange coverage through Jan. 3. This is surprisingly robust with 12 more days to enroll. About 21.4 million enrolled in 2024 and about 24.3 million enrolled in 2025. About 23.6 million people enrolled in the Exchanges plans through Jan. 4, 2025. The 800,000 drop so far is likely less than most had expected. The Congressional Budget Office (CBO) said 2.2 million will lose coverage in 2026 due to the expiring enhanced subsidies. The CBO said an average of 3.8 million more uninsured people annually would result from 2026-2034.

The results so far include 15.6 million Exchange selections in the 30 states using the HealthCare.gov platform for the 2026 plan year and 7.2 million plan selections in the 20 states and the District of Columbia with state-based Exchanges (SBEs) that are using their own eligibility and enrollment platforms. Total nationwide plan selections include 2.8 million new consumers and 20 million consumers who had active 2025 coverage.

Meanwhile, President Trump says he may veto any subsidy extension that passes Congress.

In other news, interesting Politico coverage on Sen. Bernie Moreno, a MAGA Republican who is leading the fight for some sort of compromise on Exchange subsidies. He says reviving Obamacare subsidies would be “putting America first.”

Further, three states have extended open enrollment – Connecticut, Illinois, and Pennsylvania. Pennsylvania says it is shedding a thousand people daily due to premium hikes, which could lower the 22.8 million reported by CMS.

Additional articles: https://www.reuters.com/business/healthcare-pharmaceuticals/trump-says-he-may-veto-extension-obamacare-subsidies-2026-01-12/ and https://www.politico.com/news/2026/01/12/bernie-moreno-obamacare-talks-00719585 and https://www.beckerspayer.com/payer/aca/3-states-extending-open-enrollment/ and https://www.beckerspayer.com/payer/aca/pennsylvania-aca-exchange-losing-1000-enrollees-daily-after-subsidies-expire/ and https://www.cms.gov/newsroom/fact-sheets/marketplace-2026-open-enrollment-period-report-national-snapshot-0

(Some articles may require a subscription.)

#exchanges #coverage #healthcare

https://www.fiercehealthcare.com/regulatory/legislators-revive-aca-debate-hill-trump-seeks-meeting-insurers

J&J Becomes Latest Drug Firm To Strike Price Deal

Johnson & Johnson arrived at a deal with the Trump administration to lower prices for certain prescription drugs in exchange for tariff relief. As with other deals, J&J will offer specific drugs for sale directly to consumers at significant discounts through the Trump administration’s TrumpRx website. It will offer its drugs to the Medicaid program at comparable prices to other developed countries. It will also give the most-favored-nation (MFN) price on new drug introductions.

J&J said it is planning two new U.S. manufacturing facilities as part of a previously announced $55 billion investment.

#drugpricing #branddrugmakers #mfn  

https://thehill.com/policy/healthcare/5681535-johnson-johnson-trump-drug-prices/?tbref=hp

The Courageous 4 Becomes The Courageous 17

The House voted 230-196 to extend enhanced Exchanges premium subsidies for three years as is, with 17 GOP lawmakers joining Democrats. This was after four GOP members signed on to a discharge petition to force a vote. House Speaker Mike Johnson, R-LA, and other leaders are livid, but the members were courageous to buck their party to cast a vote they believed in. They tried very hard to get the GOP leaders to agree to a compromise and even simply to hold a vote. Johnson broke his word on the vote under pressure from head-in-the-sand conservatives.

The measure is not expected to pass the Senate as a similar bill failed to reach 60 votes there, but a compromise continues to be negotiated in the upper chamber between moderates on both sides of the aisle, which then would face a rocky road back in the House with the GOP leaders. I have predicted chances at best are 50-50. I covered the details of a potential compromise in the newsfeed yesterday. The vote today certainly helps on the momentum front.

Additional articles: https://www.healthcaredive.com/news/house-votes-revive-enhanced-aca-subsidies/808871/ and https://www.modernhealthcare.com/politics-regulation/mh-aca-subsidies-house-vote-insurance/ and https://www.medpagetoday.com/publichealthpolicy/washington-watch/119347 and https://thehill.com/homenews/house/5680184-obamacare-tax-credits-bill-passes-house/ and https://thehill.com/homenews/senate/5679302-democrats-push-thune-obamacare-vote/ and https://www.beckershospitalreview.com/finance/house-approves-3-year-aca-subsidy-extension/

(Some articles may require a subscription.)

#exchanges #healthcare #coverage

https://www.fiercehealthcare.com/regulatory/legislators-revive-aca-debate-hill-trump-seeks-meeting-insurers

Exchange Compromise Being Developed In Senate

A bipartisan group of senators is working on a compromise to extend the enhanced Exchange subsidies that expired on December 31. The draft compromise would extend the subsidies for two years but add reforms, including income caps for subsidies, minimum premium payments, and appropriations of cost-sharing subsidies. To combat fraud, the bill would penalize health plans that enroll phantom enrollees. The bill would also include expansion of health savings accounts (HSAs) by giving subsidized enrollees the choice of the current Exchange subsidy or having the money go to a pre-funded account beginning the second year of the extension. 

The official draft may be released next week. Some Democrats say the caucus could agree to such changes. Others are upset by any minimum premium, even $5 or $10 a month. That seems like a ridiculous position.

But abortion could spell doom for the compromise. Republicans want a strict ban on abortion coverage in Exchange plans. Right now, under the Hyde amendment, a small amount more is charged each subscriber if the plan covers abortion. Democrats say any change is a non-starter.

The House of Representatives will vote Wednesday on a discharge petition to extend the subsidies by three years as they were in law. Four Republicans signed on and the bill is expected to pass the House. But a similar bill was voted down in the Senate because it failed to achieve the required 60 votes. Senate Majority Leader John Thune, R-SD, reiterated that a clean restoration of the subsidies without modifications is a nonstarter in the chamber.

In other news, President Trump will host leaders from 14 health plans to discuss ways to lower prices. Trump claimed that “with one talk,” he thinks costs can be reduced by “50(%), 60(%), or 70%.” But while some belt tightening can occur at big plans, costs are really governed by provider demands. He is talking to the wrong group.

Additional articles: https://www.fiercehealthcare.com/regulatory/legislators-revive-aca-debate-hill-trump-seeks-meeting-insurers and https://www.modernhealthcare.com/politics-regulation/mh-aca-subsidies-congress-2026/

(Article may require a subscription.)

#healthcare #coverage #exchanges #healthplans #trump

https://thehill.com/policy/healthcare/5677676-obamacare-subsidies-health-care-premiums-abortion

WSJ Finds Excess Rx Refills At Medicare Plans Via Mail Order

Many argue The Wall Street Journal has it out for health plans as it has had many hard-hitting investigations of fraud and bad practices over the past year or so. Some parts of the industry have accused the Journal of being wrong or behind the times, but the newspaper seems to constantly find scandal afoot, especially among the big national plans. Some of its findings, which are hard to question, have led to ongoing investigations by federal regulators and Capitol Hill.

The Journal’s latest expose finds that mail order pharmacies – again the biggest owned by the big national healthcare players — regularly overfill Medicare prescriptions. The Journal finds that excessive filling is a common practice at mail order firms. Too-frequent refills by all U.S. pharmacies cost Medicare and patients $3 billion between 2021 and 2023 says the Journal.

Mail-order pharmacies filled just 9% of Medicare prescriptions in the study period but accounted for 37% of the excess dispensing. Practices that continue overfilling include automatic 90-day refills and early refills. While federal rules require health plans to limit early refills (e.g., no earlier than 75% of the way through a prior supply or 68 days for a 90-day supply), the Journal analysis found that UnitedHealth Group’s mail-order pharmacies sent refills sooner than the 68-day threshold 11% of the time. That was almost nine times the rate of all other Medicare pharmacies.

The reason is clear: vertically integrated companies’ insurers cut great deals with their sister companies and the vertical behemoths then find many pathways to derive as much revenue as possible in the unregulated entities. The Journal has found yet another use case of this fact.

#medicareadvantage #partd #fwa #healthplans

https://www.msn.com/en-us/health/other/pharmacies-flood-medicare-patients-with-3-billion-of-extra-drugs/ar-AA1T6d3S

Johnson Under Fire From Moderates On Healthcare

As Congress returns this week, House Speaker Mike Johnson, R-LA, is facing a backlash from moderates in his already divisive caucus with a razor-thin majority. Moderates are upset that Johnson refused to hold a vote on Exchange subsidy extensions. After that, four members sided with Democrats on a discharge petition to force a vote in January. These moderates are committed to reaching a compromise with the Senate to extend the subsidies in some form.

#exchanges #healthcare #coverage #congress #gop #speakerjohnson

https://thehill.com/homenews/house/5667397-mike-johnson-house-republican-moderates/?tbref=hp

Congress Comes Back To Exchange Saga

Congress is slated to reopen next week and will return to the Exchange subsidy controversy. Some lawmakers say that arriving at a potential compromise on extending enhanced subsidies is about 50-50 right now. A vote will be held in the House on a Democratic bill to extend the subsidies with no changes for three years. At least four Republicans are expected to support the measure, which would mean the bill likely passes. The same extension was voted down in the Senate (it did not reach 60 votes), but the bill could be used for a compromise measure, which then would go back to the House. GOP leaders in each house, though, are expected to put roadblocks up to final passage.

With the reduction in subsidies and major increases in premiums, between 2.2 million and 7.3 million people may decide against renewing their insurance because of the price hikes. In 2025, over 24 million had Exchange coverage. Young people, blacks, Hispanics, and those between 250% and 400% of federal poverty are expected to see the biggest increases in their uninsured ranks.

But so far published data have not shown a massive reduction in enrollees. State officials though are seeing terminations and enrollees choosing less-generous benefits.

Because it fully made up for federal subsidy losses, New Mexico’s health insurance marketplace has reached record enrollment. More than 80,400 people have enrolled for medical or dental coverage through BeWell, the state’s ACA marketplace, as of Dec. 30. That is more than the 79,000 people that enrolled for 2025 coverage. Other states have partially replaced expiring subsidies.

Health insurance marketplace Access Health CT has extended open enrollment to Jan. 31 (by two weeks) for coverage that starts in February.

Additional articles: https://www.beckerspayer.com/payer/aca/connecticut-health-insurance-marketplace-extends-open-enrollment/ and https://www.beckerspayer.com/payer/aca/new-mexico-sees-record-aca-enrollment-after-state-replaces-expired-subsidies/

#exchanges #healthcare #coverage

https://thehill.com/policy/healthcare/5668719-aca-obamacare-subsidies-expire

Drug Prices To Climb

3 Axis Advisors reports that the costs of at least 350 drugs in the U.S. are expected to rise in 2026. And as it notes, some of the firms boosting prices are the same that just agreed to reduce prices with President Trump.

The firm also finds that a higher number of drugs will see price increases next year compared with last year, when more than 250 drugs were increased. The median price hike is about 4%.

#drugpricing #branddrugmakers

https://thehill.com/policy/healthcare/5668053-us-drug-prices-rise-2026