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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

CMS Reins In Part D PDP Premium Stabilization Program

The Centers for Medicare & Medicaid Services (CMS) released preliminary technical Medicare Part D bid information for contract year 2026. It released the national average monthly bid amount (NAMBA) and base beneficiary, which are used in bid preparation. CMS also announced it was again funding a special premium stabilization demonstration started in 2025 to keep premiums from rising dramatically.

The culprit for rising premiums is largely the passage of cost-sharing limits in Part D in the Democrats’ Inflation Reduction Act. The Democrats did not adequately fund the changes and therefore pushed many of the costs to plans, which then had to increase premiums and cost-sharing and make other reductions. The IRA changes have badly impacted the financial stability of the standalone Part D offerings (PDPs).

For 2026, the generosity of the demonstration will be less. In 2026, CMS is reducing the uniform base beneficiary premium reduction from $15 to $10, increasing the increase limit on a plan’s total Part D premium from $35 to $50, and eliminating the narrowed risk corridor thresholds. While PDP enrollees saw less offerings and higher costs in 2025, they will likely see more of this in 2026.

In other news, healthcare policy group KFF published a review of 2025 Medicare Advantage (MA) plans. A key finding: In 2025, more than three quarters (76%) of enrollees in individual MA plans with prescription drug coverage pay no premium other than the Medicare Part B premium.

Further, KFF also published a review of 2025 MA enrollment so far. More than half (54%) of eligible Medicare beneficiaries are enrolled in Medicare Advantage in 2025. In 2025, one in five (21%) Medicare Advantage enrollees is in a special needs plan (SNP), reflecting a steady increase in recent years. Slightly less than one in five (17% or about 5.7 million) Medicare Advantage enrollees are in a group plan offered to retirees by an employer or union.

Additional articles: https://www.kff.org/medicare/issue-brief/medicare-advantage-premiums-out-of-pocket-limits-supplemental-benefits-and-prior-authorization/ and https://www.kff.org/medicare/issue-brief/medicare-advantage-enrollment-update-and-key-trends/

#medicareadvantage #partd #pdp #specialneedsplans #snps

https://www.cms.gov/newsroom/fact-sheets/2026-medicare-part-d-bid-information-and-part-d-premium-stabilization-demonstration-parameters

Centene Reports Huge Loss in Q2

After pulling its earnings guidance several weeks ago, Centene announced today a $253 million loss in the second quarter as it navigates significant cost pressures. Financials will be challenging in 2026 due to Exchange and Medicaid reductions in the recent budget bill. Its medical loss ratio (MLR) was 93%. It also received lower risk adjustment transfers in the Exchange than anticipated.

Through the first six months of the year, the company brought in $95.4 billion in revenue and $1.05 billion in profit. Centene will update rates for the Exchange given higher adversity and the impact of the budget bill. It also hopes for higher Medicaid rates.

Centene is the largest Exchange plan, with 5.8 million members in 29 states, and the largest Medicaid plan, with 12.8 million members in 30 states.

Additional articles: https://www.fiercehealthcare.com/payers/centene-posts-253m-loss-amid-aca-marketplace-woes and https://www.modernhealthcare.com/insurance/mh-centene-earnings-medicaid-cuts-aca-market/ and https://www.beckerspayer.com/payer/centene-posts-253m-loss-in-q2/

(Some articles may require a subscription.)

#centene #medicaid #exchanges #margins

https://www.healthcaredive.com/news/centene-q2-2025-loss-medicaid-aca/754014