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States Sue on Work Requirements

Democratic governors and attorneys general from 25 states and Washington, D.C. are suing the Trump administration over the proposed Medicaid work requirements regulation. States argue the rule narrows exemptions for medically frail Medicaid beneficiaries and creates administrative barriers that could cause eligible people to lose coverage. The plaintiffs say the rule goes well beyond the statute by requiring people with serious health conditions to prove their condition significantly impairs their ability to meet work requirements.

Additional: https://www.beckershospitalreview.com/legal-regulatory-issues/25-states-sue-trump-admin-over-medicaid-work-requirements-7-things-to-know/ and https://www.modernhealthcare.com/politics-regulation/mh-medicaid-work-requirement-lawsuit-democrats-bonta/

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#medicaid #workrequirements #states

https://thehill.com/policy/healthcare/5946392-lawsuit-trump-medicaid-exemptions/

Exchange Enrollment Falls Dramatically

A number of analyses have predicted that Exchange enrollment nationally will fall in 2026 after dropping from 24.3M in 2025 to 23.1 in January 2026. The analyses said that enrollment would drop to as low as 17.5M as people would not be able to afford their premiums throughout the year. Sure enough, the predictions seem to have come true, and the news may be being buried.

Today, a Health and Human Services (HHS) website posted an analysis on fraudulent and phantom enrollments and deep in the release were latest enrollment figures. HHS says around 19.2 million people are enrolled in the Exchanges as of now, a drop of about 4M since January.

HHS says millions are inappropriately receiving subsidies, including individuals misstating their income to gain access to free plans and phantom enrollees (those who are unknowingly enrolled in free plans by unscrupulous brokers or are auto enrolled). HHS says improper, phantom and fraudulent enrollment peaked at 5.6 million people in 2025.

While it did not trace the enrollment losses exactly to efforts to reduce inappropriate enrollments, HHS says it has deployed new regulations and tools to root out fraud and inappropriate enrollments. Administration program integrity efforts stopped about 1.5 million enrollees from receiving subsidies they did not qualify for and ended or blocked another 1.4 million through February 2026. HHS says 2.6 million improper and phantom enrollments remain.

#exchanges #enrollment

https://aspe.hhs.gov/reports/aca-exchange-enrollment-2026#:~:text=Enrollment%20that%20is%20improper%20or,by%20brokers%20or%20auto%20enrolled

Cassidy Wants 340B Reform

Sen. Bill Cassidy, R-LA, unveiled a draft for 340B reform today and challenged the public to offer comments for the possible passage of legislation later in the year. This would be the first time any statutory changes to 340B would be made in 15 years.

There are numerous reforms aimed at controlling costs, reining in inappropriate use of the program, reducing duplicative discounts, and ensuring savings are actually passed through to needy consumers. The hospital lobby and others oppose any changes. Numerous studies show that 340B hospitals tend to have higher prices than non-340B ones. Changes would include the ability of drug makers to offer upfront discounts or retrospective rebates, claims submission, and mandatory pass-through of the rebates. There would also be a set number of contract pharmacies within each geographic region that a qualifying provider could have.

Additional article: https://www.fiercehealthcare.com/providers/cassidys-new-plan-reform-340b-rebates-contract-pharmacy-limits-and-more

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#340b #drugpricing #hospitals #branddrugmakers

https://www.modernhealthcare.com/politics-regulation/mh-bill-cassidy-340b-bill-rebate-claims

CMS Actuary: $9T Healthcare In Our Future

The Centers for Medicare and Medicaid Services (CMS) Actuary released annual outyear growth projections for healthcare. The actuary says U.S. healthcare spending will hit just short of $9 trillion by 2034. That will be 20.6% of gross domestic product (GDP).

While final numbers for 2025 will be tallied by December, the actuary also said healthcare spending was about $5.7 trillion in 2025, up 7.3% from about $5.3 trillion in 2024. That was about 18% of GDP. This is the third straight year of over 7% growth.

The average growth over the decade will be about 5.4%, which is lower than previous projections. But healthcare spending will continue to grow faster than the rest of the economy during the decade period projected.

Utilization increases have been one of the major culprits for aggressive trends the past few years. This will continue in 2026 and may taper off thereafter. Retail prescription drug spending is forecast to grow at the fastest clip over the next decade. Growth in retail prescription drug spending is expected to be 5.7% per year on average for 2025 to 2034, with hospital spending growth at 5.2% per year on average, and physician and clinical services spending growth at 5.5% per year on average during this period.

The insurance rate will go from 91.8% in 2024 to:

• 90.8% in 2026
• 90.4% in 2028
• 90.5% in 2034

The uninsured rate will rise 8.2% to 9.5%.

Interestingly, the impact of the One Big Beautiful Bill Act’s reductions to Medicaid and the Exchanges as well as the expiration of enhanced premium subsidies are expected to be more modest than Congressional Budget Office (CBO) projections.

In other news, healthcare policy group KFF issued a briefer on Medicare spending based on the Medicare Trustees’ June 9 annual report.

Additional articles: https://www.fiercehealthcare.com/finance/us-health-spending-set-reach-9t-2034-cms-report and https://www.healthcaredive.com/news/us-health-spending-spikes-57t-2025/823660/ and https://www.healthaffairs.org/content/forefront/nhe-projections-through-2034-growth-assumptions-policy-consequences and https://www.kff.org/medicare/key-facts-about-medicare-spending-trends-and-projections-from-the-2026-medicare-trustees-report/ and https://www.cms.gov/files/document/national-health-expenditure-projections-results-presentation.pdf and https://www.cms.gov/files/document/nhe-projections-forecast-summary.pdf and https://www.cms.gov/files/document/nhe-projections-infographic.pdf

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#healthcare #spending #cms

https://www.modernhealthcare.com/politics-regulation/mh-us-health-spending-2034-cms/

Less Than 50% Are Healthcare Cost Secure

A new West Health-Gallup Affordability Index survey classifies just 49% of American adults as “Cost Secure” down two percentage points from 2024 and down 12 percentage points from 2022. Forty-one percent of adults in 2025 are considered “Cost Insecure” and 10% of adults are considered “Cost Desperate.”

Affordability, and specifically healthcare affordability, is a top election-year issue.

#affordability #healthcare #coverage

https://www.fiercehealthcare.com/payers/gallup-poll-claims-less-50-american-adults-can-afford-healthcare

States Worried Rural Funding Could Be Clawed Back

After announcing the Rural Health Transformation with much fanfare, the Centers for Medicare and Medicaid Services (CMS) is now threatening clawbacks of funding or reductions of future allocations if states do not meet policy goals and requirements set out by the agency. CMS is rejecting and reshaping state plans under the $50 billion program.

States are struggling not only with the policy goals but also the speed by which the program must be implemented and dollars spent. While many of the Trump administration policy goals are noble, states and rural providers are focused more on efforts to balance budgets and keeping the doors open.

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#cms #healthcare #ruralhealthcare #obbba

https://www.modernhealthcare.com/politics-regulation/mh-cms-rural-health-fund-clawbacks

— Marc S. Ryan

More Clover Stars Fallout

More news on the fallout from the Clover Health lawsuit it won on its Star Year 2026 ratings. As noted earlier this week, the Centers for Medicare and Medicaid Services (CMS) have recalculated Star ratings, giving contracts the “better of” the original rating or one that includes only measures that are consistent (sort of as CMS took some liberties) with the judge’s decision on Clover.

There are more losers than winners. About 5% of contracts and 10% of enrollment benefited, while about 37% of contracts and membership would have dropped if not for the hold harmless. The rest would have had no change.

As I have said, CMS really had no choice but to do what it did despite a $1 billion plus price tag. I think this will be fixed over time. Yours truly is quoted in the article saying that plans likely will be conservative when they submit updated bids for 2027.

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#stars #cms #medicareadvantage #quality

https://www.modernhealthcare.com/insurance/mh-medicare-advantage-star-ratings-humana-clover

— Marc S. Ryan

Lilly Cuts Off 340B Discounts

Eli Lilly and Company ended 340B discount pricing for drugs for providers that have not agreed to submit claims for validating whether purchases meet the program’s requirements or may be double-dipping on other discount programs. Earlier this month, Lilly began enforcing the policy by telling its wholesalers to pull 340B pricing eligibility for certain non-conformers. Lilly said these were large and wealthy health systems. Hospitals are apoplectic and earlier derailed a 340b pilot that would have converted the upfront discounts to a retrospective rebate. Their fear: other drug makers follow suit and the Trump administration does not object.

Additional articles: https://www.fiercehealthcare.com/providers/eli-lillys-ultimatum-hospitals-send-340b-claims-data-june-1-or-lose-discounts

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#340b #drugpricing #drugmanufacturers

https://www.modernhealthcare.com/providers/mh-eli-lilly-340b-drug-discounts-hospitals/

— Marc S. Ryan

CMS Recalculates Some SY 2026 Ratings

CMS this evening announced it is recalculating some contracts’ SY 2026 Star Ratings based on the better of the current ratings or the measures included in the recent Clover decision. A judge struck up to 20 measures. CMS went out of its way to note that this does not set policy for SY 2027 ratings or beyond. I still expect an appeal or other intervention to bring back a fulsome Star program.

#stars #quality #cms #medicareadvantage #partd #pdp

MedPAC Largely Pans Hospitals’ Complaint On MA Penetration

Congressional Medicare policy advisor MedPAC panned hospitals’ views that increased penetration of Medicare Advantage (MA) is impacting providers’ financial stability. Empirical analyses conducted by MedPAC staff showed no evidence of a significant association between MA market penetration and all-payer margins of hospitals, skilled nursing facilities (SNFs), and home health agencies. This does not appear to be the case in rural markets, either.

But MedPAC did find some changes in revenues, costs and utilization trends and some of it was in hospitals’ favor. MA enrollees’ average length of stay in fiscal year 2024 was actually 11.2% longer than fee-for-service (FFS) beneficiaries. This was related to those who were destined to be discharged to a post-acute care facility. And overall greater MA penetration was tied to dips in total SNF facility days and small declines in revenues and costs at SNFs and home health.

#medicareadvantage #providers #hospitals

https://www.fiercehealthcare.com/payers/medpac-offers-look-enrollment-hiccups-medicare-beneficiaries