Newsfeed

Providers Readying Opposition To 340B Pilot

Providers say they are in store for significant cash flow and operational problems if a 340B pilot proposed by the Health Resources and Services Administration (HRSA) goes into effect. Given interest in reform, HRSA proposed a voluntary pilot to allow brand drug makers to convert to a rebate on a small subset of drugs as opposed to an upfront discount in the drug discount program. The program is meant to help ensure availability of drugs to lower income populations. The 340B program pricing is 25%-50% less.

Providers fear the pilot will eventually become how the entire program is run. Brand drug makers support the change as they feel the program is not living up to the original intent. Indeed, studies show that eligible providers, often hospitals, are not extending the discounts to low-income populations and instead are pocketing the discount. Indeed, some studies suggest prices at 340B eligible facilities are higher than those that are not 340B eligible.

Providers complain that the pilot implementation timeline is far too aggressive and opposing comments will not be considered when submitted. Comments are due Sept. 8 and drug makers must apply by Sept. 15. Participants will be announced Oct. 1 for a pilot beginning Jan. 1.

Additional article: https://www.modernhealthcare.com/politics-regulation/mh-hrsa-340b-rebate-pilot-program-providers/

(Some articles may require a subscription.)

#drugpricing #340b #branddrugmakers #hospitals

https://www.fiercehealthcare.com/providers/hhs-will-demo-drugmakers-340b-rebate-model-limited-pilot-program

Eroding Employer Coverage Squeezes Average Americans

A good Health Affairs Forefront Blog on eroding employer coverage and the impact on the lowest tier of working Americans.

The article does a good job of discussing the chasm between what private healthcare coverage pays providers and what government programs pay. It notes that statistics bear out that price and not utilization largely drives spending growth in the employer market. It says U.S. hospitals charge privately insured patients nearly 2.5 times more than what Medicare pays for the exact same service.

The articles disclaims that there is a cost-shift, but instead says it is related to provider market power. Well, I still think there is a cost-shift to some degree that is occurring, but I can also buy the author’s market power argument.

The article notes that the price differences are a systemic issue and those who ultimately pay the price are “workers via a series of damaging, indirect mechanisms.” It dives deep into the fact that employers now are cost-shifting to workers. Because of the ongoing cost burden of healthcare, employers are moving employees into high-deductible health plans. The average annual deductible for a worker with single coverage has surged 47% over the past decade. The articles say people are quickly becoming underinsured – hey that’s my line. They cannot afford to use their healthcare.

The article points to the consequences – one in four delay or forego care. That has major health impacts and increases costs down the road.

The cost-shift from employer to workers hits those who can least afford it — the lowest-paid workers. Spiking healthcare costs also lead to job losses, and these same workers are usually targeted first. The lowest paid also have mountains of medical debt.

The authors see a need to challenge on anti-trust issues, regulate price, and empower purchasers through transparency. The authors conclude: “Reining in exorbitant commercial provider prices is not simply an exercise in controlling healthcare spending; it is a fundamental prerequisite for restoring economic fairness for US workers and fostering a more dynamic and competitive national economy.”

Well said.

(Article may require a subscription.)

#employercoverage #healthcare

https://www.healthaffairs.org/content/forefront/beyond-bill-hidden-economic-toll-high-commercial-provider-prices

Paragon Seeks More Healthcare Changes

Paragon Health Institute is riding a wave of success after many of its core healthcare proposals ended up in the recent budget reconciliation bill. It is busy defending the legislation but also pushing for more reforms in a possible second budget bill. Paragon is now pushing the following for inclusion:

• Site neutral payments
• Exchange cost-sharing reduction reform
• Reducing the 90% federal match rate for Medicaid expansion
• 340B drug discount program reform
• Medicare Advantage (MA) reform, including rate benchmark changes, ending additive quality bonus payments, and risk adjustment reform

#healthcare #healthcarereform #medicare #medicaid #medicareadvantage #exchanges

https://www.fiercehealthcare.com/payers/conservative-policy-shop-paragon-health-previews-next-health-reform-priorities

Insurer Woes Dominate Headlines

Clover reported meeting guidance to The Street, but saw its stock drop due to reports of higher expenses, especially related to Part D drug costs from the Inflation Reduction Act (IRA). Clover’s medical expenses were 88.4% of revenue and could climb in 2025 to just 89.5%.

After decreasing full-year guidance by about half a billion dollars recently, Oscar Health missed earnings projections for Q2. Oscar had a net loss of $228 million, after reporting a net profit of $275 million in Q1. Its medical expense climbed to 91.1%.

Oscar says sicker individuals are entering the Exchanges from Medicaid and healthier enrollees are leaving. The company is trimming its workforce to help save on administrative expense. It continues to maintain its financial targets, in part through its investments in the “ICHRA” program, created by Trump 45 to allow employers to seed premiums to employees who enroll in individual coverage.

In other news, Healthcare Dive discusses the fact that CVS Health and Humana reported relatively positive results after realigning their busineses in 2024, while others (including UnitedHealth Group) reduced or pulled guidance just recently as their balance sheets and outlooks eroded. Humana and CVS’ Aetna contracted products, geography, and benefits for 2025 in Medicare Advantage (MA) and others will have to do so going into 2026. All major health insurer stocks are down on the negative financial results in 2025, with prospects looking bad for many plans due to the passage of the budget reconciliation bill.

Additional articles: https://www.fiercehealthcare.com/payers/clover-health-stock-sinks-following-elevated-part-d-utilization and https://www.fiercehealthcare.com/payers/oscar-health-misses-estimates-q2-plans-rif-and-announces-hyvee-ichra-partnership and https://www.healthcaredive.com/news/medicare-advantage-contraction-health-insurer-q2-2025/756807/

(Some articles may require a subscription.)

#healthplans #medicareadvantage #oscar #clover #margins

https://www.modernhealthcare.com/insurance/mh-unitedhealth-humana-elevance-cigna-stock-q2

Trump Wants 250% Drug Tariffs

President Donald Trump threatened to impose tariffs of up to 250 percent on pharmaceutical imports, higher than the 200% discussed before. Tariffs would be minimal at first, but increase in 12 to 18 months to 150% and eventually 250%. Trump is seeking drug makers to re-shore production, but supply chains and other barriers make re-shoring completely very difficult. Tariffs would cause healthcare costs to spiral given our reliance on generics and brands from foreign countries.

#drugpricing #trump #tariffs  

https://thehill.com/homenews/administration/5436846-drug-import-tariffs-trump/

More Costs Will Be Pushed To Employees In 2026

A new Mercer study shows that half of large employers plan to shift costs onto employees as well as reduce benefit offerings. Further, due to rising spending, employers are looking for ways to reduce costs while at the same time being open to safeguarding coverage of popular weight loss drugs and well-being. But weight-loss drugs may have to be reined in due to the magnitude of costs.

Employers expect costs to rise by 6% in 2025 and go up more in 2026. About 51% of large employers (500 or more employees) said they’re likely or very likely to shift more costs to employees, including raising deductibles or out-of-pocket maximums. This compares with 45% in 2024.

About 35% of large employers said they plan to offer a non-traditional medical plan option in 2026, such as variable copay plans.

#employercoverage #coverage #healthcare

https://www.healthcaredive.com/news/mercer-large-employers-to-shift-health-plan-costs-onto-employ/756673

UnitedHealth Group’s Struggles

UnitedHealth Group continues its financial cleanup by ousting executive leaders. Today, the company announced it will replace its CFO, John Rex. Wayne DeVeydt, a former managing director and operating partner at Bain Capital, will take on the role.

UnitedHealth Group’s credit outlook also was downgraded to “negative” from “stable” by Fitch Ratings. Fitch blamed recent poor Q2 financials.

Additional articles: https://www.modernhealthcare.com/insurance/mh-unitedhealth-credit-outlook-downgraded-fitch/ and https://www.healthcaredive.com/news/unitedhealth-replaces-cfo-john-rex-wayne-deveydt/756561/

(Some articles may require a subscription.)

#unitedhealthcare #margins

https://www.fiercehealthcare.com/payers/unitedhealth-group-cfo-john-rex-step-down-september

340B Program Reform Coming

The Trump administration indicated in several drug price reform announcements it would seek to reform the 340B drug discount program. Now, it is proposing a pilot to go down the reform path. The Health Resources and Services Administration (HRSA) is launching a voluntary program to test drug makers paying rebates versus issuing discounts upfront to the qualifying providers, which include some hospitals, federally qualified health centers, and other safety-net providers. The pilot will cover just a small subset of drugs, including those for diabetes, rheumatoid arthritis, and heart failure.

Some brand drug makers attempted to convert to rebates but were stopped by the Biden administration. The Trump administration appears on board, although hospitals and other providers oppose the changes. But 340B badly needs reforms as the drug discounts are not truly being passed on by most providers, who pocket the discounts.

Additional articles: https://www.modernhealthcare.com/politics-regulation/mh-hrsa-340b-rebate-pilot-program-2026

(Some articles may require a subscription.)

#340b #drugpricing #hospitals #branddrugmakers

https://www.fiercehealthcare.com/providers/hhs-will-demo-drugmakers-340b-rebate-model-limited-pilot-program

More Insurer Financial News

Medicare Advantage-dominant insurer Humana had better financial news than most insurers these days, but perhaps because of its earlier bad reports and its ongoing efforts to right its financial ship. Humana slightly raised its guidance on earnings, although it did have a decline in net income in Q2. Humana reported a net income of $545 million in the second quarter, down from a net income of $679 million during the same period last year.

Lower MA revenue and high utilization spend continues to challenge Humana. The medical loss ratio was reported as 89.7%, high but in line with forecasts. Its Medicaid financials bucked trends. Its pharmacy unit was a bright spot.

Humana says its projected loss in membership in MA will be lower than previously forecast – 500,000 vs. 550,000.

In other news, Fitch affirmed UnitedHealth Group’s “AA-” rating July 30 but revised the company’s outlook to negative from stable. 

Alignment Healthcare posted its first quarterly profit and raised its full-year membership, revenue, adjusted profit and adjusted EBITDA outlooks.

Additional articles: https://www.modernhealthcare.com/insurance/mh-humana-medicare-advantage-outlook-earnings/ and https://www.healthcaredive.com/news/humana-2025-guidance-raise-medicare-advantage-pharmacy/756257/ and https://www.beckerspayer.com/payer/fitch-revises-unitedhealths-outlook-to-negative/ and https://www.beckerspayer.com/payer/medicare-advantage/alignment-healthcare-posts-first-profit/ and https://www.beckerspayer.com/payer/humana-posts-545m-q2-profit-raises-2025-outlook/

(Some articles may require a subscription.)

#healthplans #margins #humana #unitedhealthcare #alignment #medicareadvantage #medicaid

https://www.fiercehealthcare.com/payers/humana-improves-outlook-revenue-beats-estimates-q2

UnitedHealth Group’s Financial Woes

UnitedHealth Group painted a bleak picture in its revised outlook for 2025. It significantly downgraded its projections for 2025 and reported a steep drop in earnings per share. Net income declined 19% to $3.4 billion.

United says it will deemphasize sales of Medicare Advantage (MA) PPOs, eliminate unprofitable MA plans in 2026 that cover more than 600,000 people, and may exit some Exchange markets in 2026.

United is seeing its MA costs spike well over forecast and they could go even higher, to as much as 10%. While most plans are hurting in MA, United’s problems seemingly came out of the blue and are right now worse than others. Costs are high in other business lines, too. Its normally strong services unit, Optum, also is feeling the pinch.

And given its continuing financial woes, Humana is offering certain employees voluntary early retirement buyouts. Employees age 50 or older with at least three years of service are eligible for the program, although those working in certain business-critical areas will be ineligible.

Additional articles: https://www.modernhealthcare.com/insurance/mh-humana-buyouts-voluntary-early-retirement/ and https://www.modernhealthcare.com/insurance/mh-unitedhealth-group-q2-earnings-guidance/ and https://www.healthcaredive.com/news/unitedhealth-2025-outlook-lower-earnings/754243/ and https://www.beckerspayer.com/payer/unitedhealth-group-sets-new-earnings-guidance-amid-19-q2-profit-dip/ and https://thehill.com/policy/healthcare/unitedhealth-earnings/

(Some articles may require a subscription.)

#unitedhealthcare #medicareadvantage #humana #margins #layoffs

https://www.fiercehealthcare.com/payers/unitedhealth-cuts-2025-outlook-elevated-medical-costs-continue-sting