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Budget Reconciliation Could Slip Into The Summer

A prominent GOP lawmaker told hospital stakeholders today that action on budget reconciliation spending cuts could slip into the summer. Rep. Buddy Carter, R-GA, who chairs a key health subcommittee, indicated the possible slowdown. In addition, hospital leaders exhorted lawmakers to avoid sweeping cuts, which could include work requirements, reduced state matches for the expansion population, fraud reduction, and a per capita cap funding mechanism. They also want the Exchange enhanced subsidies to continue.

Insiders say Medicaid per-capita caps and other major structural reforms to the program were being put on the back burner due to moderates’ concerns, but budget hawk conservatives revolted. The committee was readying about $621 billion in Medicaid cuts over ten years. The package included numerous eligibility reforms and restrictions, a reduction in Medicaid expansion match, work requirements, and reducing provider tax allowable rates to 5%. Medicaid spread pricing was also being banned.

In other news, Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz said that he supports reduction of the enhanced match in Medicaid for expansion populations. This shows the power of the Paragon Health Institute within the administration. Paragon has been campaigning on reducing the expansion population match rates for some time now.

Additional articles: https://www.modernhealthcare.com/politics-policy/cms-mehmet-oz-medicaid-expansion and https://www.modernhealthcare.com/politics-policy/medicaid-cuts-budget-buddy-carter and https://insidehealthpolicy.com/health-insider/providers-patient-advocates-continue-medicaid-lobbying-blitz-house-gop-crossroads and https://insidehealthpolicy.com/inside-drug-pricing-daily-news/carter-medicaid-pbm-spread-pricing-ban-expected-reconciliation

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#budgetreconciliation #trump #congress #spending #medicaid #exchanges

https://www.modernhealthcare.com/politics-policy/aha-annual-meeting-medicaid-cuts

International Reference Pricing Bill To Lower Drug Prices Unveiled

Two senators, conservative Josh Hawley, R-MO, and progressive Peter Welch, D-VT, have introduced legislation to lower prescription drug prices. The bill would prohibit pharmaceutical companies from selling drugs in the U.S. at prices higher than the international average. This is a form of international reference pricing (IRP).

Trump proposed IRP for Medicare Part B drugs under Trump 45 and said he wanted to do so in Medicare Part D as well. The proposal was later pulled back by the Biden administration. Trump has now called for most-favored nation (MFN) pricing for Medicaid. MFN is a form of IRP. 

Trump also unveiled a master executive order to reduce drug prices in America. This bill is an important development as it includes a conservative senator. It appears that populism is winning over the GOP, which is usually very friendly to Big Pharma. I can see Trump and the GOP in Congress getting together on major drug price reform.

#drugpricing #branddrugmakers #medicare #employercoverage #medicaid

https://thehill.com/policy/healthcare/5283776-bipartisan-senators-offer-new-bill-aimed-at-lowering-drug-prices

Cigna Reports Good Financial News

The Cigna Group reported $1.3 billion in profit for the first quarter of 2025, bucking the trends that have hurt other companies in the insurance industry. Its earnings surpassed Wall Street’s expectations. The company posted a $277 million loss in the prior year quarter. Cigna reported $65.5 billion. That’s up from $57.3 billion for Q1 2024.

Cigna faced less pressure around medical costs, reporting a medical loss ratio of 82.2% – up from 79.9% a year ago.

Cigna just sold its Medicare assets to Health Care Service Corporation (HCSC).

It also announced two new GLP-1 programs.

In other news, insurtech Alignment Healthcare exceeded its high-end guidance for the first quarter. The company posted $926.9 million in revenue, up 47.5% year over year. Adjusted gross profit came in at $107.2 million. Alignment still posted a net loss for the quarter at $9.4 million.

Additional articles: https://www.fiercehealthcare.com/payers/cigna-bucks-medical-cost-trend-posts-13b-q1-profit and https://www.fiercehealthcare.com/payers/alignment-healthcare-revenue-grows-927m-hires-former-multiplan-cfo and https://www.healthcaredive.com/news/cigna-evernorth-glp1-support-programs-enreachrx-enguide-q1-2025/746967/

#alignmenthealthcare #cigna #healthplans #medicareadvantage #employergroup #commercial #margins

https://www.forbes.com/sites/brucejapsen/2025/05/02/cigna-profits-hit-13-billion-as-health-insurer-gets-handle-on-costs

Trump Meets House Leaders On Medicaid Cuts

President Donald Trump met with House GOP leaders to discuss Medicaid reductions. Trump said he opposes Medicaid coverage cuts but would support efforts to rein in fraud, waste, and abuse. But Trump has given little word about what would violate his pledge to protect Medicaid.

Conservatives want deep cuts and have sent a letter to colleagues saying they want “meaningful reforms” in budget reconciliation. They singled out reducing the Medicaid expansion enhanced reimbursement. Moderates are lining up against reductions, with moderate Don Bacon saying he is leaning against reductions in federal matching funds or provider tax changes. Bacon did say he would support up to $500 million in cuts over the ten-year window. He would support work requirements, more frequent eligibility, and bars on the undocumented.

In other news, a poll from healthcare policy group KFF finds that large majorities of Americans, including Republicans, oppose Medicaid cuts.

Last, the Paragon Health Institute continues its publications to influence Medicaid policy. It says there are two proposals to equalize expansion and regular population funding: first, gradually phase down the enhanced expansion match rate and shift nearly half of current Medicaid expansion enrollees into subsidized ACA plans. Second, grandfather current expansion enrollees at the enhanced match rate but apply the state’s match rate for children, pregnant women, seniors, and the disabled for new expansion enrollees.

Additional articles: https://www.modernhealthcare.com/politics-policy/trump-house-gop-medicaid-cuts and https://insidehealthpolicy.com/daily-news/bacon-leaning-no-fmap-provider-cuts and https://thehill.com/policy/healthcare/5275399-gop-medicaid-cut-plan-opposition-kff-survey/ and https://stateline.org/2025/05/01/repub/three-quarters-of-americans-oppose-medicaid-cuts-poll-shows/ and https://www.kff.org/medicaid/poll-finding/kff-health-tracking-poll-april-2025-publics-view-on-major-cuts-to-federal-health-agencies/ and https://www.kff.org/affordable-care-act/press-release/most-of-the-public-oppose-major-federal-cuts-to-health-agencies-and-programs-and-say-they-have-been-made-recklessly/ and https://paragoninstitute.org/newsletter/marking-up-medicaid-reform/

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#medicaid #coverage #spending #budgetreconciliation #trump #congress

https://thehill.com/policy/healthcare/5278434-house-conservatives-call-for-controversial-medicaid-changes-in-reconciliation/

Humana Stuns With Great Numbers In Recovery

Humana stunned investors with great Q1 recovery numbers, well above what investors had expected. The company beat earnings expectations for the first quarter and reaffirmed its 2025 guidance. Medical costs for the Medicare Advantage (MA)-dominant insurer came in as predicted.

Humana had a profit of $1.2 billion, up 68% compared to the first quarter last year.

Humana has shed unprofitable MA lives in an effort to get back to a 3% margin by 2027.

As important, Humana is seeking to undo a huge concentration of its MA lives in one very large master contract. This will take several years. When Humana’s Star performance was industry-leading, the concentration helped. But that contract dropped dramatically in Star Year 2025, causing a huge loss of quality bonus and rate rebate revenue.

Humana still expects a medical loss ratio (MLR) for the full year of between 90.1% and 90.5%. This shows the battles all MA plans are facing this year, with a rate reduction and surging utilization.

Additional articles: https://www.fiercehealthcare.com/payers/humana-reaffirms-guidance-it-posts-12b-q1-profit-beat and https://www.healthcaredive.com/news/humana-posts-really-good-first-quarter-stable-medical-costs/746704/ and https://www.beckerspayer.com/payer/humana-posts-1-2b-profit-in-q1/

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#medicareadvantage #humana #healthplans #rates #margins

https://www.modernhealthcare.com/finance/humana-medicare-advantage-management-earnings

CMS May Further Rein In Prior Authorization

Bloomberg reports that the Centers for Medicare and Medicaid Services (CMS) is exploring proposals to further rein in prior authorization (PA) and other utilization management. The exploration is likely on Medicare Advantage (MA).

In 2024, CMS introduced sweeping PA restrictions, requiring MA plans largely to follow the traditional program requirements for benefit coverage. When CMS Administrator Dr. Mehmet Oz appeared before the Senate for his confirmation hearings, he bemoaned PA in MA and stated that he wanted to reform it. He specifically mentioned that he wanted to streamline the number of PAs allowed and ensure consistency across plans.

Indeed, Bloomberg reports that the aim of the CMS exploration would be to cut the number of medical procedures subject to PA and drive uniformity across plans. Another recent rule also requires electronic PA and CMS is looking at further driving this.  

Health plans also are battling state PA restrictions. Thus, many health plans have already begun lifting PAs and reforming them.

In other news, a package of California bills aiming to streamline PA recently passed Senate and Assembly health committees.

In still other news, the Iowa Senate passed a bill that would set new requirements for pharmacy benefit managers (PBMs). This is a major trend at the state level as well.

Additional articles: https://www.beckerspayer.com/payer/california-prior-authorization-reform-package-takes-a-step-forward/ and https://www.beckershospitalreview.com/pharmacy/iowa-senate-passes-pbm-bill-4-things-to-know/

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#healthplans #medicareadvantage #priorauthorization

https://www.modernhealthcare.com/policy/cms-insurance-prior-authorizations

Drug Tariffs’ Impact

A new study from Fitch says that health plans will not see immediate impact from tariffs on drugs. Providers will bear the brunt upfront and pay higher costs in operations. But over time, providers will pass through the costs to insurers through increased rates.

In other news, a dozen states with Democratic attorneys general have filed suit over President Donald Trump’s use of the International Economic Emergency Powers Act (IEEPA) to enact new tariffs. The states argue they have a role due to the fact the tariffs could significantly increase costs for hospitals, manufacturers, and other stakeholders.

Additional article: https://insidehealthpolicy.com/daily-news/citing-health-costs-democratic-states-sue-trump-over-tariffs

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#tariffs #drugpricing #healthplans #providers

https://www.fiercehealthcare.com/payers/fitch-ratings-how-higher-tariffs-could-impact-health-insurers

Centene Reports Decent Financial News With Some Uncertainty

Centene reported relatively sound financial news, but did raise policy issues that could impact the company over time. The uncertainty ties to what will happen in Congress in the next year on Medicaid and the Exchanges.

Centene says it believes sweeping Medicaid cuts will not occur and are still pushing hard for extending the premium enhancements in the Exchanges, focusing on swing states and general support for government programs. They do admit some changes, such as work requirements, could occur.

The medical loss ratio (MLR) was 87.5%, about the same as the prior year’s same quarter. But expenses could rise.

Centene posted $1.3 billion in net income in the first quarter. Total revenues in the first quarter were $46.6 billion, up 15.4% year over year. The company reaffirmed its year-end adjusted guidance.

A few complications for Centene could occur. Even modest Medicaid changes could mean shedding more enrollment. If the subsidies do expire, that would mean major enrollment losses on the Exchange front. That would also change the Exchanges’ risk, which could drive up premiums.

Centene said it has reached agreements with more than half of state insurance regulators to submit two sets of rates for 2026 – with and without extension of the enhanced premiums.

Additional articles: https://www.beckerspayer.com/payer/centene-posts-1-3b-profit-in-q1/ and https://www.healthcarefinancenews.com/news/centene-pulls-13-billion-q1-earnings and https://www.healthcaredive.com/news/centene-raises-2025-revenue-medical-cost-guidance-q1/746349/ and https://www.modernhealthcare.com/finance/centene-medicare-advantage-marketplace-drew-asher

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#medicaid #aca #obamacare #exchanges #medicareadvantage #centene #fwa #budgetreconciliation #spending #congress #trump

https://www.fiercehealthcare.com/payers/centene-boosts-revenue-guidance-2025-it-brings-466b-q1

340B Reform May Be Coming

Senate HELP Committee Chairman Bill Cassidy, R-LA, on Thursday released a years-long staff investigation of the 340B drug discount program and listed legislative reforms he may push to rein in practices that don’t meet the intent of the program.

Cassidy suggests the following:

• Annual reporting requirements for select covered entities.
• Potential changes to the definition of eligible 340B patients.
• Clarifications regarding contract pharmacies’ fees and the common use of the inventory replenishment model.
• Investigating the financial benefits contract pharmacies and third party administrators receive for administering the 340B program to make sure increasing fees do not disadvantage covered entities and patients.

A recent executive order from President Trump orders the conditioning of community health centers’ future grants to ensuring insulin and injectable epinephrine are made available to patients at the 340B discounted price or lower.

Additional article: https://www.fiercehealthcare.com/regulatory/sen-cassidy-releases-340b-report-recommending-greater-transparency-oversight-hospitals

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#340b #drugpricing #communityhealthcenters #hospitals

https://insidehealthpolicy.com/inside-drug-pricing-daily-news/cassidy-unveils-staff-report-underpinning-potential-340b-legislative

Medicaid Reimbursement Back On Budget Table

House Republicans are still considering a proposal that would reduce the 90% federal match for the Medicaid expansion population down to normal state match rates. In addition, both work requirements and provider tax changes are being considered.

The House could be influenced by the powerful Paragon Health Institute, a Trump-leaning think tank whose staffers and fellows have been in Trump 45 and 47. Paragon recently unveiled a Medicaid landing page that talks provider taxes, enhanced federal matches, fraud and waste, and more.

Meanwhile, Axios reports that a Trump pollster reveals that Medicaid is popular among America, even with Trump voters. About 78% of Trump supporters support Medicaid. And an analysis from the Center for American Progress (CAP) found that about 34,200 more people would die annually if the federal government reduced its current 90 percent match for the expansion costs and states dropping their Medicaid expansions. 

Last, a proposed regulation has landed at the Office of Management and Budget that could seek to rein in provider taxes as well as directed payments.

How deep any of these cuts go is unknown. House rightists want deep Medicaid cuts, while moderates in each chamber have vowed to oppose the budget reconciliation bill if coverage is impacted.

Additional articles: https://www.axios.com/2025/04/23/maga-trump-medicaid-cuts-congress and https://thehill.com/policy/healthcare/5261905-medicaid-cuts-house-republican-budget-plan/ and https://paragoninstitute.org/newsletter/medicaid-reform-goals-paragons-latest-on-reducing-medicaid-and-exchange-waste/ and https://paragoninstitute.org/issue-library/medicaid-reform/ and https://www.healthcaredive.com/news/cms-medicaid-directed-payments-rule-omb/746096/

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#medicaid #aca #obamacare #trump #congress #budgetreconciliation

https://insidehealthpolicy.com/daily-news/fmap-reduction-back-table-republicans-negotiate-reconciliation-bill