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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

Elevance Reports Mixed But Better News Than United

Elevance Health reaffirmed its 2025 earnings outlook, but did report some mixed news. Elevance beat The Street with revenue of $48.9 billion, up almost 15% year over year. It had profit of $2.2 billion, down 3% year over year. Elevance spent less money on medical care than analysts expected in Q1. Elevance did see higher costs in the first quarter, but premium hikes covered the trend. Still, the company advised it will approach 2025 cautiously.

Elevance noted it is ramping up care coordination with new members to prepare for medical cost trends that have dogged the health insurance sector. I have noted that plans will begin to pivot from utilization management to care management moving forward.

Additional articles: https://www.modernhealthcare.com/insurance/elevance-health-cost-predictions-medicare-advantage and https://www.healthcaredive.com/news/elevance-brushes-off-medicare-advantage-cost-fears-q1-2025/745961/ and https://www.modernhealthcare.com/insurance/elevance-health-lower-medical-costs and https://www.beckerspayer.com/payer/medicare-advantage-costs-manageable-for-elevance-health-8-notes/

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#medicareadvantage #healthplans #elevancehealth #margins

https://www.fiercehealthcare.com/payers/elevance-health-beats-street-22b-q1-profit-elevated-cost-trends-pressure-industry

Supreme Court Leans Toward Safeguarding Preventive Services

After oral arguments before the Supreme Court on whether preventive services will be protected, many are speculating that the nod goes to the government’s defense of the free services decided by several task forces wihin the Department of Health and Human Services (HHS). Plaintiffs are challenging the provision on religious grounds and arguing that those who decide what services should be provided are not properly appointed to make such decisions. The government argues the task forces have the right oversight and correctly appointed officials have the final say.

It is important to note that conclusions reached by reading the tea leaves from justices’ questions does not always match the final ruling.

Additional article: https://www.medpagetoday.com/publichealthpolicy/publichealth/115218 and https://insidehealthpolicy.com/daily-news/scotus-appears-poised-back-uspstf-s-role-free-preventative-services and https://www.modernhealthcare.com/legal/supreme-court-aca-case-prep and https://insidehealthpolicy.com/health-insider/house-ec-plans-post-recess-budget-markup-scotus-appears-sympathetic-aca-preventative and https://thehill.com/policy/healthcare/5259118-supreme-court-obamacare-insurance/

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#prevention #preventiveservices #aca #obamacare

https://www.fiercehealthcare.com/payers/supreme-court-appears-willing-save-aca-preventive-services-task-force

United MA Troubles Cloud MA Industry Prospects

The fallout from UnitedHealth Group’s poor quarterly financials is creating worry throughout the industry. While Elevance Health reaffirmed its earnings forecasts, some are wondering if United is just the first shoe to drop as investor calls for the quarter roll out. United blames some of the problems at its insurance and service entity on the new risk model that was rolled out in Medicare Advantage (MA) along with major utilization. Previously, United indicated it was not too worried about the change.

The United financials and similar trends expected in some other MA plans show that the 5% hike for 2026 will not cure all ills in the industry. It helps with the financial realignment of many, but discipline will still be needed to get back to profitability.

Additional article: https://www.beckerspayer.com/payer/unitedhealth-shifts-tone-on-medicare-advantage-as-cms-changes-impact-earnings/

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#medicareadvantage #unitedhealthcare #rates #margins #elevancehealth

https://www.modernhealthcare.com/insurance/unitedhealth-group-medicare-advantage-earnings-2025

UnitedHealth Group Hits Financial Pothole

The fiscal crisis that other insurers saw in 2024 has now hit UnitedHealth Group. Its stock dropped sharply after the insurance giant slashed its earnings outlook for 2025. Not only did United’s stock drop, but so did the stock of other big health players. And the entire market went down as well Thursday.

United is now seeing the high utilization of other plans in its insurance business. This is especially explosive in Medicare Advantage (MA). MA costs have increased twice as much in 2025 as they did in 2024. United only just learned of this. Not only did its insurance business suffer, but so did its Optum services business, which saw its patient profitability drop as its health plan clients struggled with their finances.

Ironically, United went into the 2025 MA enrollment season excited to enroll a large number of beneficiaries. It performed well. The growth in lives will now add to financial problems.

Elevance Health, the second largest overall insurer, issued guidance early after the United news. It reaffirmed its 2025 guidance. Its assumptions on medical expense were reaffirmed too.

The industry hailed the 5 plus % hike for 2026 in MA, but as I noted struggles would continue due to high utilization across the board but especially in MA. This is the first sign that that is so.

In other news, a good Health Affairs Forefront blog discusses how MA leads to lower cost trends in all of Medicare because of MA policies as well the relationships the private program forms with physicians. Providers change behaviors and that “spills over” to traditional Medicare for savings. The authors think this is still true notwithstanding MedPAC’s arguments on overpayments and beneficial selection. It notes that the government should think twice before tying the hands of MA as it has done of late on prior authorization.

Additional articles: https://thehill.com/policy/healthcare/5254865-unitedhealth-group-stock-drops/ and https://www.beckerspayer.com/payer/elevance-assures-investors-with-reaffirmed-2025-earnings-guidance/ and https://www.modernhealthcare.com/finance/elevance-warns-about-financial-hit-amid-unitedhealth-miss and https://www.healthcaredive.com/news/unitedhealth-unh-cuts-2025-guidance-profit-underperforms-q1/745592/ and https://www.beckerspayer.com/payer/unitedhealth-cuts-earnings-guidance-amid-rising-medicare-advantage-costs/ and https://www.modernhealthcare.com/insurance/unitedhealth-group-earnings-2025-forecast and https://www.healthaffairs.org/content/forefront/medicare-advantage-helping-bend-cost-curve

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#medicareadvantage #healthplans #margins

https://www.fiercehealthcare.com/payers/unitedhealth-group-cuts-profit-outlook-citing-higher-expected-medicare-advantage-care-costs

Trump Executive Order Wants Deeper Drug Price Cuts

In yet another sign President Donald Trump will keep the Medicare drug price law, he issued an executive order that strives to get deeper price reductions in the second year of negotiations (2025 for an effective date of 2027).

The executive order is general. But it does commit to evaluating ways to ensure prices drop more than the average 22% seen in the 2024 negotiations, increase transparency, increase generic introduction and penetration, further importation, and reform pharmacy benefits managers (PBMs) and other middlemen. It also indicates special programs would be set up for the low income. The order will solicit information from the public and stakeholders.

On the other hand, Trump also said the actions would minimize any negative impacts of the maximum fair price on pharmaceutical innovation within the United States. This likely could mean protecting certain small molecule drugs longer from negotiations, which is known as the “pill penalty.” But that could also mean some shortening of large molecule drug protection. Healthcare policy group KFF lays out the impact to the number of drugs negotiated and lost savings if small molecule drug protection is extended. As I have said in the past, I have some sympathy for drug makers on the small molecule issue in terms of parity in the law.

Some are speculating that the order could throw out the entire gross and net price system by eliminating rebates.

The special program could leverage grant conditions at community health centers and other similar groups to lower costs of drugs by passing through discounts received. Others predict that there will be new conditions placed on 340B hospitals as well to pass through drug price reductions.

In two other encouraging signs, the order requires an evaluation of site-neutral payment reform and whether Medicare payment is encouraging a shift in drug administration volume toward costly hospital outpatient departments. Further, the Department of Labor will issue new transparency requirements to ensure that pricing and other arrangements of PBMs are made clear to employer groups that are self-insured.

In other news, Mark Cuban’s Cost Plus Drugs will target drug shortages through an agreement with those in the injectable drug market.

Additional articles: https://www.healthcaredive.com/news/trump-drug-pricing-executive-order-ira-pill-penalty/745539/ and https://insidehealthpolicy.com/daily-news/trump-targets-ira-drug-negotiation-imbalance-new-eo-offers-few-details and https://insidehealthpolicy.com/inside-drug-pricing-daily-news/drug-pricing-eo-reveals-plan-build-cgt-access-model-medicaid and https://www.healthaffairs.org/content/forefront/administration-lays-out-drug-pricing-plan-through-executive-order and https://www.kff.org/policy-watch/the-effect-of-delaying-the-selection-of-small-molecule-drugs-for-medicare-drug-price-negotiation/ and https://insidehealthpolicy.com/inside-drug-pricing-daily-news/eo-leverages-340b-insulin-medicare-pay-address-site-neutral and https://www.beckershospitalreview.com/quality/pharmacy/mark-cubans-drug-firm-targets-injectable-shortages/

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#drugpricing #trump #branddrugmakers #ira #transparency #generics #340b #siteneutral #pbms

https://www.fiercehealthcare.com/payers/trump-order-seeks-changes-medicare-drug-price-negotiation-program-pbm-reform

State AGs Want Healthcare Entities With PBMs Broken Up

A bipartisan group of state attorneys general wants Congress to pass legislation that would break up healthcare entities that own both pharmacy benefits managers (PBMs) and pharmacies. This targets UnitedHealth Group, CVS Health, and The Cigna Group, which control somewhere between 68% and 80% of the PBM market. At issue, too, is co-manufacturing of specialty medications.

More and more state regulation of PBMs is passing. There is a growing bipartisan consensus in Congress for the need to reform PBMs.

Additional article: https://insidehealthpolicy.com/inside-drug-pricing-daily-news/state-ags-demand-congress-ban-pbms-owning-pharmacies

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#pbms #drugpricing

https://www.modernhealthcare.com/politics-policy/cvs-caremark-express-scripts-arkansas-vermont

Drug Imports Will Get Tariffs

The Trump administration is preparing to levy tariffs on imported pharmaceuticals within the next month or two. This is after drugs got a reprieve recently. Lobbies for the generic and biosimilar industries say tariffs could deepen existing drug shortages, raise prices, and harm patient access.

In addition, the Department of Commerce has launched an investigation to assess the impact of pharmaceutical imports on U.S. national security.

Additional articles: https://insidehealthpolicy.com/inside-drug-pricing-daily-news/commerce-says-pharmaceutical-tariffs-coming-next-month-or-two and https://www.beckershospitalreview.com/hospital-management-administration/federal-government-launches-probe-on-drug-imports-5-notes/

#tariffs #healthcare #drugpricing

https://thehill.com/policy/healthcare/5245652-trump-tariffs-pharma-drug-shortages-trade-war-hhs-kennedy