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KFF Finds $60B At Risk With Directed Payment Reforms

Healthcare policy group KFF finds that an estimated $60 billion in federal Medicaid spending in 37 states (including the District of Columbia) would likely exceed new federal limits on state directed payments for hospital services once fully implemented under the One Big Beautiful Bill Act (OBBBA).

The eight states with the biggest potential reductions in Medicaid payments to hospitals are: California ($7.4 billion), Illinois ($4.0 billion), Kentucky ($3.9 billion), Texas ($3.5 billion), North Carolina ($3.4 billion), Louisiana ($3.3 billion), Arizona ($3.0 billion) and Michigan ($2.6 billion). This accounts for about half of the total.

While controversial, there is little doubt in my mind that intergovernmental transfers, provider taxes, and state directed payments have been abused by many states and some reforms are needed.

Additional article: https://www.kff.org/medicaid/analysis-at-least-37-states-have-medicaid-state-directed-payments-for-hospital-services-that-could-be-reduced-by-the-2025-reconciliation-law-limits/

#medicaid #obbba #healthcare #coverage

https://www.kff.org/medicaid/at-least-37-states-have-medicaid-state-directed-payments-for-hospital-services-that-could-be-reduced-by-the-2025-reconciliation-law-limits/

Aetna’s VBC Approach Paying Dividends

CVS Health’s Aetna health plan is seeing its value-based care (VBC) investments paying off in terms of preventive care metrics and cost savings.

The insurer looked at 20 different measures for individuals in its Medicare Advantage (MA) plans between VBC models and fee-for-service (FFS) reimbursement. It determined that VBC arrangements resulted in better results across 17 measures. About 43% more members controlled their HbA1C and 34% had controlled blood pressure. About 20% more patients were screened for colorectal cancer and there were 7% fewer hospitalizations.

VBC providers generated $315 million in savings during plan year 2023, 2.6% higher than FFS providers. VBC risk arrangements vary. Providers in two-sided risk models had the strongest performance across multiple measures in the report. Aetna says that, given apprehension and differences in maturity in the provider market, it enters into various levels of VBC models with providers.

Report: https://www.aetna.com/content/dam/aetna/pdfs/aetnacom/insights/aetna-medicare-vbc-whitepaper.pdf

#healthplans #vbc #valuebasedcare

https://www.fiercehealthcare.com/payers/look-where-aetna-seeing-value-based-care-success-medicare-advantage

Parts of No Surprises QPA Rule Struck

A federal appeals court has ruled that the government’s methodology for calculating the qualifying payment amount (QPA) within the No Surprises Act’s arbitration process is partly unlawful. This could lead insurers to have to recalculate such future offers at higher rates. The court found that inclusion of so-called “ghost rates” in the calculation and excluding bonus and incentive payments did not meet the law.

The law heavily favors providers already. The move could mean higher benchmark payments in general over time. But it could also move the last best offers of plans up in the arbitration process. Would that sway some arbitrators to award to plans? So far, the awards are 85% in favor of plans and at payment amounts that are well higher than before the law went into effect. It is driving higher prices overall.

Additional articles: https://www.beckershospitalreview.com/legal-regulatory-issues/5th-circuit-strikes-down-parts-of-no-surprises-qpa-rule-rejects-air-ambulance-challenge/ and https://www.beckerspayer.com/policy-updates/the-never-ending-no-surprises-saga/

(Some articles may require a subscription.)

#nosurprisesact #providers #healthplans #transparency

https://www.modernhealthcare.com/legal/mh-no-surprises-act-payment-appeals-court

Trump Administration Defends Exchange Paring

The Trump administration went on the offensive today arguing that studies prove the reduction in Exchange enrollment in 2026 was the result of fraud control efforts enacted during the last few years. It said the sharp rise in premiums was not the cause. Policy experts dispute this and argue that tougher enrollment processes and enhanced premium subsidy expiration led to a surge in premiums and enrollment declines.

Enrollment in Exchange plans fell by nearly 3 million nationwide this year to about 19.2 million. The Trump administration says 2.9 million people were removed through fraud initiatives. More are expected to cancel coverage throughout the year due to premium affordability issues.

I have a blog running Thursday on this topic. Stay tuned. But a hint on where I stand – the truth is always somewhere in the middle.

#exchange #enrollment #coverage

https://www.fiercehealthcare.com/regulatory/kennedy-oz-contend-fraud-crackdown-not-skyrocketing-prices-led-millions-leave-obamacare

Many Plans Still Showing Losses

Despite a reasonable recovery among the national health players in Q2 2026, HealthScape Advisors, part of Chartis, says health plans remain under significant financial pressure. Its annual look at health plans’ financial performance finds that plans posting an operating loss increased over the past several years. In 2023, 54% of health plans reported an operating loss, and that grew to 70% in 2024. And in 2025, that rose again to 73%.

HealthScape says operating losses are concentrated among regional plans and Blues plans, with 72% of regional insurers and 83% of Blues reporting one in 2025. Fourteen percent of national payers reported an operating loss in 2023 and 2024, but the rate jumped to 43% in 2025.

Read my blog last week on the national players here: https://www.healthcarelabyrinth.com/are-insurers-turning-the-financial-corner-yes-but-there-is-more-work-to-be-done/

#healthplans #margins

https://www.fiercehealthcare.com/payers/number-health-plans-reporting-operating-losses-growing-report

340B Bill Would Hinder Administration’s Reforms

Another bill with bipartisan Senate support has been introduced to stop the administration from extending a rebate pilot it plans to launch that would convert 340B upfront discounts to retrospective rebates. 

The bill would establish an independent, third-party data clearinghouse to address Big Pharma’s concerns that discounts are being diverted and duplicated by qualifying hospitals and other participants. The entity would coordinate 340B transaction data between parties and oversee any issues.

#340b #drugpricing #branddrugmakers #hospitals

https://www.fiercehealthcare.com/regulatory/new-bipartisan-340b-reform-bill-curbs-hhs-rebate-pilot

Oscar, Clover Have Good Financial Results

Exchange-dominant Oscar Health reported strong Q2 results, with a profit of $362 million compared with a loss of $228.4 million a year ago. The company saw record profitability in 1H 2026, generating $1.1 billion in earnings from operations and $1 billion in net income.

Clover Health’s Medicare Advantage (MA) membership grew 48% year-over-year in Q2 to 157,309 members. The company posted $153 million in profit, up 54% from Q2 2025, and revenue of $743 million, up 56% from Q2 2025. It was also buoyed by its Star lawsuit win.

Additional article: https://www.fiercehealthcare.com/finance/oscar-health-boosts-2026-earnings-outlook-after-record-profitability-during-first-half-year

#healthplans #margin

https://www.fiercehealthcare.com/finance/clover-health-reaffirms-ai-commitments-discusses-star-rating-amid-strong-q2-performance

CVS Health Reports Good Q2 News But Signals Disappointing 2027 Guidance

CVS Health reported good financial performance in Q2, but signaled caution for 2027. This led to a decline in its stock price. CVS reported higher revenues across all segments but said its pharmacy benefits manager (PBM) was facing headwinds due to 340B and other market trends.

Aetna was the star for CVS as the insurer showed a stunning recovery from a few years ago. Like United and Cigna, it called out the deleterious impact of the out-of-control No Surprises Act arbitration process. Medicare Advantage’s (MA) recovery drove a great deal of earnings.

Net income for CVS rose 196% to almost $3 billion.  Income increased 7% year over year to $106.1 billion. 

In other news, Becker’s Payer ranks payers by Q2 2026 profit.

As well, UnitedHealthcare may end MA sales in 34 counties in 12 states next year. This would impact 20,000 enrollees, some of whom may not have any MA alternatives.

Additional articles: https://www.modernhealthcare.com/insurance/mh-cvs-earnings-aetna-caremark-membership/ and https://www.modernhealthcare.com/insurance/mh-cvs-earnings-guidance-medicare-advantage/ and https://www.beckerspayer.com/rankings-ratings/payers-ranked-by-q2-2026-profits/ and https://www.modernhealthcare.com/insurance/mh-unitedhealth-medicare-advantage/

(Some articles may require a subscription.)

#cvshealth #aetna #margins #healthplans

https://www.healthcaredive.com/news/cvs-triples-net-income-q2-2026-raises-outlook/827041/

Fireworks At Senate Committee Meeting On Medicaid

Explosive remarks at a Senate Finance Committee this week on Medicaid. Democrats attacked the recent One Big Beautiful Bill Act (OBBBA), especially the impact of work requirements, reductions in coverage, and impacts on providers and hospitals. The bill reduces Medicaid expenditures from its baseline by about $1 trillion.

Republican senators on the other hand focused on Medicaid’s potential fraud. Brian Blase, PhD, founder and president of the Paragon Health Institute, said his organization finds that improper enrollment of certain Medicaid beneficiaries cost the federal government about $33 billion in 2024.

#medicaid #obbba #coverage #healthcare #congress

https://www.medpagetoday.com/publichealthpolicy/medicaid/122489

The Big Debate Over Dropping Exchange Enrollment

The Trump administration recently went on the offensive, arguing a drop in Exchange enrollment should be credited to its ongoing efforts to crack down on improper and fraudulent enrollment. A recent administration report says 5.6 million people were fraudulently enrolled in Exchange plans in 2025, and that it removed 2.9 million through various initiatives.

But critics argue the drop in enrollment is tied to rising premium costs, including the expiration of enhanced premium subsidies passed and extended during the COVID years. They argue more will drop throughout 2026 due to affordability issues.

The truth is likely somewhere in the middle. For sure, rising premiums have led many to disenroll. But the Trump administration is likely also right. There is little question in my mind that zero premiums led many to be fraudulently enrolled.

#exchanges #enrollment

https://kffhealthnews.org/medicaid/aca-fraud-crackdown-skyrocketing-prices-enrollment-decline/