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Is UnitedHealthcare Gaming Medical Expense Regulation?

A new study published in Health Affairs finds that UnitedHealthcare pays its owned providers at sister company Optum 17% more than those it does not own. And if United controls 25% or more of a market, that percentage increases to 61%. Researchers said the results suggest the company may be sidestepping government rules regarding calculation of medical expenses against premiums. If those rules are violated, rebates need to be sent to the government, employers, or individuals depending on the type of coverage. In effect, higher payments to owned providers would boost the so-called medical loss ratio (MLR) and more likely hit or exceed the required spending (usually 80% or 85%).

United says the study is wrong. And the study clearly has some limitations. It looked at just 14 CPT medical codes and about 385,000 transactions. But these were frequently performed and high-cost procedures in the commercial world. And to arrive at the over-reimbursement calculation, United payments were compared to what other large insurers, such as CVS’ Aetna, Cigna and Elevance Health, paid providers.

Notwithstanding United’s declarations to the contrary, the research would seem to be legitimate and reach a correct conclusion. It has long been a secret that vertically integrated health plans tend to sign lucrative deals with their own sister companies so as to inflate medical expense. It frees these organizations from a great deal of rebates and keeps the revenue in the family. It happens with payments to owned providers, at-risk payments to owned providers, higher payments to their own pharmacy benefits managers and specialty pharmacies, and payments to its own service entities. The good news is that transparency rules are now bringing some light to all this and congress is looking at the backroom deals.

Additional articles: https://www.healthcaredive.com/news/unitedhealthcare-pays-optum-doctors-more-than-other-doctors-study/804600/

#verticalintegration #healthplans #minimummlr #unitedhealthcare

https://www.fiercehealthcare.com/payers/study-suggests-unitedhealthcare-pays-optum-docs-more-other-providers

Government Shutdown End In Sight?

After bipartisan weekend talks, Senate Majority Leader John Thune, R-SD, said Monday that he is “optimistic” lawmakers can strike a deal to reopen the government by the end of the week. He added that a stopgap spending bill could fund government through January or later to allow time to mark up and pass appropriations bills. The House will have to re-pass the temporary funding bill as it expires on November 21. Insiders say that Democrats could give in on their position to include Exchange subsidy extensions if a bill is pre-negotiated, likely with the president, or if GOP leaders announce a commitment to hold an up or down vote on an extension.

Meanwhile, Rep. Marjorie Taylor Greene, R-GA, says Republicans deserve much of the blame for rising premiums, saying Republicans should have reformed the Affordable Care Act (ACA) sooner. “The Democrats passed Obamacare, but yet the Republicans have never done anything to correct the problems that exist with it. … And I don’t think it’s an easy thing to fix. … However, it’s something that we should have a plan for, and [House Speaker] Mike Johnson, for a month now, cannot give me a single policy idea. … And I’m angry about that.”

As well, four moderate House lawmakers, two on each side of the aisle, on Monday proposed a framework to temporarily extend the Exchange enhanced premium subsidies, including a sunset period and an income cap for high earners. 

Additional articles: https://thehill.com/homenews/senate/5587098-thune-shutdown-spending-bill/ and https://thehill.com/homenews/house/5584132-democrats-gop-end-shutdown/ and https://thehill.com/homenews/house/5584704-greene-maher-republicans-health-care-premiums-shutdown/

#governmentshutdown #trump #congress #exchanges #healthcare #coverage #aca #obamacare

https://thehill.com/policy/healthcare/5587204-obamacare-tax-credits-extension-proposal/?tbref=hp

Trump Administration Finalizes 340B Rebate Pilot

The Trump administration has approved eight drugmakers’ rebate plans for the 340B drug discount pilot program that kicks off January 1. The pilot covers a selected group of 10 drug products from eight manufacturers who have submitted plans meeting specific criteria approved by the Health Resources and Services Administration (HRSA). The covered drugs include Eliquis, Enbrel, Farxiga, Imbruvica, Januvia, Jardiance, Stelara, Xarelto and multiple Novolog and Fiasp products.

The program offers upfront discounts, but the administration wants to reform and bring greater transparency to the program to ensure it meets the intent of serving lower income Americans with discount drugs. Trump officials believe this will be accomplished with the greater scrutiny that will occur with retrospective rebates vs. upfront discounts.

Numerous studies conclude that the program does not meet the original intent and that hospitals and other facilities do not in fact lower costs for the lower income and instead pad margins with the discounts. Some studies show that drug prices at 340B qualifying hospitals are actually higher than at those who do not qualify.

The pilot comes at a time when the Congressional Budget Office (CBO) revealed that the 340B program has exploded into a multibillion-dollar subsidy for thousands of nonprofit hospitals, driving up healthcare costs for patients, contributing to the federal deficit, and delivering little measurable benefit to patients in need. The analysis shows 340B spending rose from $6.6 billion in 2010 to almost $70 billion in 2023. During that same time, brand drug spending across the rest of the market grew at just 4% per year.

The CBO says culprits for the surge in spending include hospital consolidation, the surge of contract pharmacies, upside-down incentives that allow pocketing of the discount and thereby incentivizing use of high-cost brand drugs, and a lack of basic transparency/reporting or requirement to pass savings on to patients.

Additional articles: https://www.fiercehealthcare.com/providers/hrsa-approves-8-drugmakers-plans-340b-rebate-model-pilot-program and https://www.healthcaredive.com/news/new-cbo-report-340b-ballooning-costs-congress-must-act-dan-crippen-cbo/804109/ and https://www.healthaffairs.org/content/forefront/340b-drug-pricing-program-capped-safety-net-grant and https://www.healthcaredive.com/news/340b-rebate-models-approved-hrsa/804370/

(Some articles may require a subscription.)

#drugpricing #340b #hospitals #branddrugmakers

https://www.modernhealthcare.com/politics-regulation/mh-340b-rebate-pilot-abbie-merck-hrsa/

Cigna Reports Strong Financial News

The Cigna Group reported among the strongest news of any major health plan today. It posted a $1.9 billion profit in Q3, up from $739 million during the same period last year. Revenue reached $69.7 billion, a 9.5% increase year over year. Adjusted income from operations was $2.1 billion, less than 1% lower than third-quarter 2024. Its services entity Evernorth grew tremendously, including specialty pharmacy growth. Insurer Cigna Healthcare generated $10.8 billion in adjusted revenue, down 18.3% year over year – largely due to the sale of its Medicare Advantage line. Excluding that, adjusted revenues for the insurance business were up 6% compared to Q3 2024. The medical loss ratio reached 84.8%, a 2.4% increase year over year.

Cigna executives said the company is expecting pressure on its margins with its announcement that it will begin phasing out rebates.

In related news, if Express Scripts and other pharmacy benefit managers (PBMs) thought moving to phaseout rebates would stop regulatory and congressional action, they were wrong. Lawmakers applauded the move but say they will push for passage of their reforms.

Additional articles: https://www.beckerspayer.com/financial/cigna-reports-1-9b-q3-profit/ and https://www.modernhealthcare.com/politics-regulation/mh-pbm-legislation-bills-express-scripts-rebates/ and https://www.fiercehealthcare.com/payers/cigna-reaffirms-2025-outlook-posts-19b-profit-q3 and https://www.modernhealthcare.com/insurance/mh-cigna-earnings-evernorth-health-express-scripts/

(Some articles may require a subscription.)

#healthplans #cigna #margins

https://www.healthcaredive.com/news/cigna-pharmacy-model-lower-earnings-q3-2025/804156

CVS Health and Centene Report Q3 Financial News

CVS Health, hit by a literal financial meltdown, reported relatively good recovery news for Q3 2025. Its troubled Aetna insurance business and pharmacy benefit management Caremark are recovering. Because of this, CVS Health is forecasting double-digit earnings growth in 2026.

CVS Health had $103 billion in revenue for Q3. Revenue was up 7.8% year over year. The company recorded a Q3 net loss of $3.99 billion, compared with net income of $71 million, or 7 cents per share, in the same period for 2024. The decline was due to a $5.7 billion goodwill impairment charge from the healthcare delivery unit. Aetna had $36 billion in revenue in the third quarter, up 9% year over year. The medical cost ratio dropped from 95.2% to 92.8%. 

Centene raised its yearly profit guidance despite ongoing struggles with health insurance Exchange spending and huge cuts to the federal health programs that are the foundation of its business. Centene posted a $6.6 billion loss in Q3 after incurring a one-time impairment charge related to ongoing market headwinds. The goodwill impairment charge was $6.7 billion and tied in part to the changes in the One Big Beautiful Bill Act. But Centene is making good progress on its turnaround. The company’s medical loss ratio was 92.7% in the third quarter, up from 89.2% at the same time last year but down sequentially.

Revenues were $49.7 billion in the quarter, which also beat Wall Street forecasts. By comparison, Centene reported $42 billion in revenue and $713 million in profit in the prior year quarter. Through the first nine months of 2026, the company posted $145.1 billion in revenue and $5.6 billion in losses. It brought in $122.3 billion in revenue and $3 billion in profit through the first three quarters of 2024.

Centene also emphasized its commitment to the Exchange line of business, saying even a smaller population after a subsidy expiration will still make coverage more affordable for many.

In other news, UnitedHealth Group is projecting its Medicare Advantage (MA) enrollment will decrease by 1 million people in 2026. That is up from a 600,000-member decrease it projected in July.

Additional articles: https://www.fiercehealthcare.com/payers/centene-posts-66b-loss-writedown-cost-pressures-continue and https://www.modernhealthcare.com/insurance/mh-centene-marketplace-congress-medicare-medicaid/ and https://www.healthcaredive.com/news/centene-value-writedown-q3-2025-medicaid-centene/804074/ and https://www.beckerspayer.com/financial/centene-ceo-prescription-drug-plans-steering-medicare-revenue/ and https://www.beckerspayer.com/financial/cvs-health-reports-4b-q3-loss-but-raises-earnings-outlook/ and https://www.beckerspayer.com/financial/centene-posts-6-6b-loss-but-steep-revenue-increase-for-q3/ and https://www.modernhealthcare.com/insurance/mh-cvs-health-earnings-oak-street-health/ and https://www.beckerspayer.com/payer/medicare-advantage/unitedhealth-projects-1-million-member-drop-in-medicare-advantage-enrollment/

(Some articles may require a subscription.)

#healthplans #centene #cvshealth #margins

https://www.fiercehealthcare.com/payers/cvs-health-hikes-earnings-forecast-despite-57b-impairment-charge-q3

United Reports Financial News; Big Plans Tighten Belts

Investors cheered news from UnitedHealth Group that its efforts to get back to margins are working. United raised its full-year guidance Tuesday when announcing its Q3 results. United reported that net earnings fell 59.4% to $2.54 billion and earnings from operations dropped 50.4% to $4.31 billion. Revenue grew 12.2% to $113.16 billion. But these figures beat Wall Street expectations.

United’s strategy has been to massively retrench in both Medicare Advantage (MA) and standalone Part D (PDP). United expects all its government lines of business to contract – MA, PDP, Medicaid, and the Exchanges. It expects to shed 600,000 in MA and has expanded some markets in the Exchanges but exited less profitable ones. Utilization and medical expense continues to be a challenge as its medical loss ratio was just short of 90% across all business lines. However, revenues from services entity Optum grew 8.3% to $69.2 billion. Earlier, the services entity was reporting struggles. United says it will have solid earnings growth in 2026.

In other news, struggling Aetna is looking for ways to tighten networks to ensure all providers in the continuum of care, from primary care to specialty to hospitals, are aligned around value-based models. The insurer is building a team around provider experience and improving satisfaction.

Elevance Health’s new out-of-network care policy may reduce healthcare costs but also rankle providers. Elevance will penalize in-network facilities that use out-of-network providers.

Additional articles: https://www.fiercehealthcare.com/payers/why-aetna-putting-focus-provider-experience-it-navigates-medicare-advantage-headwinds and https://www.modernhealthcare.com/insurance/mh-unitedhealth-group-guidance-aca-enrollment/ and https://www.modernhealthcare.com/providers/mh-elevance-health-out-of-network-charge-explained/ and https://www.healthcaredive.com/news/unitedhealth-2025-guidance-raise-q3-beat-ma-aca/803856/ and https://www.beckerspayer.com/financial/unitedhealth-posts-2-3b-profit-for-q3-raises-outlook/

(Some articles may require a subscription.)

#healthplans #margins #medicareadvantage #medicaid #managedcare #exchanges #unitedhealthcare #cvsaetna #elevancehealth

https://www.fiercehealthcare.com/payers/unitedhealth-boosts-2025-outlook-back-q3-earnings-beat

Cigna’s Express Scripts Is Eliminating Rebates

Spurred on by demands from the Trump administration to reform, Cigna’s Express Scripts pharmacy benefits manager (PBM) is phasing out prescription drug rebates for brand drugs. Rebates are issued by brand drug makers and usually do not go to consumers at the point of sale, causing brand drugs to have a high cost at the pharmacy. The rebates are issued by Big Pharma to gain preferred placement on drug formularies.

Cigna will eliminate rebates in many of its commercial health plans in 2027. The phaseout will expand to Express Scripts clients starting in 2028 as the default option. The PBM’s phaseout program could mean a major transformation of the PBM industry, moving billions of dollars to offset consumer costs at the expense of rebates to insurers and employers as well as some amounts retained by PBMs.

The new model will save members an average of 30% each month on brand-name medications. Patients will pay the lowest available cost — whether the PBM’s negotiated rate, the consumer’s benefit copay, the cash price, or a direct-to-consumer price.

In addition, Express Scripts will adopt a cost-plus reimbursement model for pharmacies, paying them based on their cost for medications with a dispensing fee added in.

Additional articles: https://www.fiercehealthcare.com/payers/cignas-express-scripts-set-shift-away-pbm-rebates and https://www.modernhealthcare.com/insurance/mh-cigna-drug-rebates-health-plans-2027/ and https://www.beckerspayer.com/payer/cignas-evernorth-unveils-rebate-free-pharmacy-model/

(Some articles may require a subscription.)

#pbms #branddrugmakers #rebates #cigna #expressscripts

https://www.healthcaredive.com/news/evernorth-express-scripts-new-pbm-model-cost-plus/803864/

Bipartisan Support For 340B Reform

Senators on both sides of the political aisle expressed support for reforming the 340B drug discount program at a Senate HELP committee hearing today. While some expressed urgency for reform, others said that more caution needs to occur with reform to ensure rural facilities are not hurt.

While hospitals have defended their use of the discounts over the years, independent studies question whether discounts are used to benefit the needy and that pricing at 340B-eligible hospitals can be more than at those ineligible for the program. In addition, many say that non-profit hospitals get far more benefit in tax exemptions than given back to poor Americans and charity care.

Senators championed transparency around how revenue is generated in the program and how it is spent as well as more audit dollars. As well, senators want hospitals’ and other facilities’ aggressive debt collection practices curbed and more resources used for uncompensated and discounted care.

The Trump administration is pursuing some reform, including a voluntary pilot to convert the upfront discount to a retrospective rebate. Brand drug makers are endorsing and opting in to the pilot. Bloated hospitals of course hate the change and scrutiny. They are simply protecting their inefficiency and unaccountable empires.

#340b #drugpricing #branddrugmakers #hospitals

https://www.healthcaredive.com/news/help-senate-hearing-340b-reform/803630

Molina Reels From Medical Expense

Molina Healthcare reported Q3 financials and cut its 2025 earnings guidance for the third time this year. It is citing high medical costs particularly in its Exchange line of business. Molina is not the first to report the Exchange medical trend concern. The impacts will only be worse in 2026 if Exchange credits expire, risk increases, and enrollment drops.

While Molina revenues beat analyst expectations, the plan missed on earnings. Molina is a Medicaid- and Exchange- dominant health plan with some Medicare Advantage (MA) lives. Molina posted a very-high medical loss ratio (MLR) of 92.6% in the quarter, up from 89.2% at the same time last year. Exchange plans hit a 95.6% MLR, up from 73% same time last year. Medicaid margins were strong but pressured from continued utilization. MA sees high utilization as well.

In other news, a mix of Exchange pullouts and some expansions (surprisingly). Aetna is fully exiting the Exchanges in 2026. Molina is pulling out of one-fifth of the counties where it sells health insurance exchange plans and also will not pay commissions in several states. Centene is contracting in some states but expanding counties in others. UnitedHealthcare, Cigna, Oscar, and Elevance Health are expanding in some existing states. Oscar is adding a few states. Other regional players are pulling out.

Additional articles: https://www.healthcaredive.com/news/molina-2025-guidance-cut-aca-woes-q3/803580/ and https://www.beckerspayer.com/financial/molina-cuts-earnings-outlook-a-third-time-amid-aca-challenges/ and https://www.modernhealthcare.com/insurance/mh-aca-plans-centene-cigna-oscar-2026/ and https://acasignups.net/25/10/20/which-carriers-are-bailing-aca-exchanges-altogether-2026 and https://www.modernhealthcare.com/insurance/mh-molina-healthcare-aca-markets-2026/

(Some articles may require a subscription.)

#molina #exchanges #margins #coverage #healthcare

https://www.fiercehealthcare.com/payers/molina-healthcares-shares-tumble-marketplace-costs-drag-q3-results

Employer Family Coverage Hits $27,000 A Year

Healthcare policy group KFF finds from its annual employer survey that family premiums for employer-sponsored health insurance reached an average of $26,993 this year. On average, workers contribute $6,850 annually to the cost of family coverage. Family premiums increased 6%, or $1,408, from last year. KFF says the cumulative increase in family premiums is 26% over the past five years.

KFF finds that more workers are in HSA-Qualified Plans as average deductibles have reached $1,886 per year.

Additional articles: https://thehill.com/policy/healthcare/5567473-health-insurance-costs-rise-2025/?tbref=hp and https://www.healthaffairs.org/content/forefront/annual-family-premiums-employer-coverage-rise-6-2025-nearing-27-000-workers-paying-6 and https://www.kff.org/health-costs/perspectives-from-employers-on-the-costs-and-issues-associated-with-covering-glp-1-agonists-for-weight-loss/ and https://www.kff.org/affordable-care-act/annual-family-premiums-for-employer-coverage-rise-6-in-2025-nearing-27000-with-workers-paying-6850-toward-premiums-out-of-their-paychecks/ and https://www.kff.org/health-costs/2025-employer-health-benefits-survey/

(Some articles may require a subscription.)

#employercoverage #healthcare #coverage

https://www.fiercehealthcare.com/payers/new-care-vs-health-insurance-average-family-job-based-coverage-hits-27k