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Employer Healthcare Costs To Soar

After multiple years of high spending hikes for employer coverage, employers are facing perhaps a near-term record trend in 2026. The Business Group on Health released its annual survey and found that business firms are bracing for median cost increases of 9% in 2026. In the past two years, costs exceeded forecasts. And employers expect an 11% to 12% increase in pharmacy costs heading into 2026.

Ongoing demand for GLP-1s and other medications for weight loss is a significant cost driver. About 72% said that GLP-1s are impacting their 2025 healthcare costs to either a “great” or “very great” extent, up from 56% who said the same a year ago. The survey indicates that the number of employers covering these medications for weight loss may “stagnate” in an effort to control costs. Employers will also put on more guardrails like prior authorization. Some may end coverage.

Cancer is the leading driver of costs for the fourth year in a row. This trend is exacerbated by an increase in diagnoses and higher expenses for treatment. Mental health is also growing as a cost factor.

Employers are considering alternative pharmacy benefits managers (PBMs) and insurers as an option.

Finally, 66% are concerned the new tax law’s reductions to the Exchanges, Medicaid and Medicare will drive up hospital prices.

Additional articles: https://www.fiercehealthcare.com/payers/employers-brace-9-cost-increase-2026-business-group-health-survey and https://www.healthcaredive.com/news/employers-2026-healthcare-cost-trend-business-group-health/757907/

(Some articles may require a subscription.)

#employercoverage #commercial #healthcare

https://www.modernhealthcare.com/insurance/mh-employer-healthcare-costs-report-2026

Healthcare Lawsuits Galore

A good article from Modern Healthcare on various Medicare Advantage (MA) and Affordable Care Act (ACA) lawsuits.

Aetna, Elevance Health, and Humana are being sued by the federal government ove alleged kickback schemes to marketing organizations to steer beneficiaries to their plans.

Democratic-controlled states are suing the Trump administration over a new Exchange rule that tightens enrollment processes in the Exchanges.

There is an ongoing suit over the dispute resolution process under the No Surprises Act. The suit in part involves how the median in-network rate is calculated.

The Supreme Court largely sided with the government on the legality of free preventive services under the ACA but returned some issues to a lower court.

(Article may require a subscription.)

#aca #obamacare #medicareadvantage #exchanges #prevention #preventiveservices #nsa #nosurprisesact #marketing #fwa

https://www.modernhealthcare.com/politics-regulation/mh-medicare-advantage-aca-lawsuits-regulation

Medicare Beneficiaries To See Part D Premium Hikes

Medicare enrollees in standalone Part D plans (PDPs) will see premium hikes in 2026. Premium hikes could be up to $50, although most will see something less. Increases might also hit those who enroll in a Medicare Advantage (MA) Part D.

The premium hikes occurred in 2025 and to a lesser degree in 2024. Spikes will be higher in 2026. The reason for the premium hikes include:

• Major drug price and utilization increases. One example is the uptake of GLP-1 weight-loss drugs used for those with chronic conditions like diabetes and cardiovascular disease.
• Changes in the Inflation Reduction Act (IRA) that limited cost-sharing in the program in a number of ways. A portion of the cost-sharing reductions were not funded and the costs and increased risk were put on plans. They had no choice but to pass on the costs in the form of higher premiums, pared back benefits, increased cost-sharing, and geographic contraction. The PDP program is becoming more and more precarious due to this short-sighted move by Democrats in 2022.
• To avoid negative election impacts, the Biden administration created a special premium stabilization program for 2025 that limited premium hikes by adding new government expenditures. This was a 3-year pilot. The Trump administration is seeking to reduce costs overall and has announced it will keep the program in 2026 but lower the dollars to plans. The stabilization effort next year will send $10 a month per enrollee to Part D insurers to help keep premiums in check, down from $15 this year. Insurers can raise premiums by as much as $50 a month, up from the $35 allowed this year.

The Trump administration was in a tough spot, inheriting a mess from the Biden CMS. The move to continue the stabilization program but at lower levels is not unreasonable despite the impact on enrollees.

#medicare #medicareadvantage #partd #pdp

https://kffhealthnews.org/news/article/medicare-part-d-premiums-rising-reasons/

Humana And DrFirst Team Up On Care Gaps

Humana and healthcare technology company DrFirst announced an expansion of their relationship aimed at closing care gaps. Humana suffered a huge loss of Star power in 2025. The focus initially will be boosting the use of statins among eligible members who are diabetics or have cardiovascular disease. DrFirst embeds in a physician’s electronic medical record system.

Additional article: https://www.fiercehealthcare.com/payers/humana-taps-drfirst-new-program-aimed-gaps-care-patients-chronic-needs

#medicareadvantage #quality #stars #humana

https://www.beckerspayer.com/payer/humana-drfirst-partner-on-program-targeting-chronic-conditions

Recap Of Q2 Health Plan Financials

A good recap in Modern Healthcare on Q2 financial results of big health plans and strategies they are employing to get back to margin. The secret in Medicare Advantage (MA) will be to prioritize margin over enrollment and growth. United and Aetna have already sent word they will pare back offerings. The secret in Medicaid will be strong lobbying efforts in each state for rates and to offset program reductions. Premium increases will dominate the Exchanges. I especially liked Elevance Health’s promise to continue legal challenges against providers on the No Surprises Act independent dispute resolution process. Bravo. It is abused by a small group of providers. In general, the provider-friendly process will drive up prices throughout the system.

(Article may require a subscription.)

#healthplans #margins #medicareadvantage #medicaid #exchanges

https://www.modernhealthcare.com/insurance/mh-aetna-cigna-unitedhealth-centene-q2-earnings

Exchange Enrollment Fraud Examined

Conservatives in and out of government made a case that there was major fraud in Exchange enrollments, especially after subsidies became more generous. The Paragon Health Institute and other conservative healthcare policy outfits did a great deal of research and it does seem credible. The GOP Congress was convinced and made some major changes to eligibility and enrollment in the Exchanges in the budget reconciliation bill. Congress also did not act to extend more generous premium subsidies set to expire at the end of the year.

Now, the Centers for Medicare and Medicaid Services (CMS) has published data that continues to fuel the narrative of rampant broker fraud. Plans were sent data by CMS that found that 35% of enrollees did not have a claim in 2024. Before the pandemic, the data showed about 22% to 24% of enrollees did not have a claim. The phenomenon occurred much more so in the federal Exchanges than the state Exchanges.

The data may not be entirely accurate as they are based on risk adjustment submission files that may not control well for the same person who changes plans during the year. But they certainly give pause and point to something wrong. The Exchanges would not be the first government healthcare program with massive fraud and little to no ongoing approach to combat it.

In related news, a Kaiser Health News article published in Fierce Healthcare discusses the impact of the budget reconciliation healthcare cuts on states that did not expand Medicaid. These states will also see deep impacts given the likely expiration of the enhanced subsidies as well as the tougher eligibility rules in the budget bill and a related Trump rule.

Additional article: https://www.fiercehealthcare.com/regulatory/even-states-fought-obamacare-trumps-new-law-poses-health-consequences

#exchanges #fwa #budgetreconciliation

https://www.fiercehealthcare.com/payers/new-cms-data-suggests-future-aca-market-turmoil-feds-crack-down-fraud

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