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2026 MA Pullback Starts A number of high profile exits from Medicare Advantage (MA) and standalone Part D (PDP) were announced today. Elevance Health announced it will cut some MA plans and fully exit the PDP program. The PDP exit is not surprising but sends a message that the program is in trouble after some political yet bad policy changes made by Democrats to Part D cost-sharing the Inflation Reduction Act. The changes have destabilized an already fragile program. Elevance has 400,000 PDP members and is the sixth-largest plan in PDP. Given its continuing financial woes, Elevance, too, will eliminate unprofitable MA plans and says that will impact 150,000 individual and group MA members. But Elevance will continue its investments in Special Needs Plans (SNPs) in 2026, a huge trend in the industry. Elevance currently has 2.3 million MA enrollees. In an another announcement, due to financial issues, Minnesota-based UCare

New Analysis on MA Overpayment I have argued that a small subset of big plans have given all of Medicare Advantage (MA) a bad name by suspect or fraudulent risk adjustment practices that give them major overpayments. A number of studies have singled out this small group of major plans. Now, the Alliance of Community Health Plans (ACHP), a group that represents local and regional nonprofit payers, has come out with a study building on these earlier findings. ACHP says that UnitedHealthcare, the biggest MA insurer, collected up to $785 more per beneficiary than local nonprofit plans in 2023, costing Medicare more than $6 billion in excess payments that year. Humana, the second-biggest MA payer, collected $423 more per beneficiary that year than if those members were in ACHP member plans, costing Medicare an additional $4 billion. UnitedHealthcare’s average risk scores were 36.2% higher and Humana’s were 19.2% higher than

Government Shutdown Looms Congress has returned to Washington and the GOP has no plan to keep the government running at the end of the month. Democrats are pushing the GOP to have a four-leaders meeting to discuss a consensus, but the House and Senate majorities are pushing other agendas right now. Democratic votes would be needed to keep the government going unless budget reconciliation was used again. That is a tall order if not impossible. The Senate GOP has floated a short-term spending patch to give more time to discuss FFY 2026 funding. But some conservatives in the House and Senate want a full-year extension at FFY 2025 spending levels with additional spending cuts. There is some bipartisan interest in negotiating a healthcare package before the end of the year. Senators are already discussing this. On the docket is the possibility of extending the Exchange premium subsidy enhancements, but conservatives

MA Controls Healthcare Growth For Enrollees While opponents of Medicare Advantage (MA) are on a campaign to strip MA of all sorts of revenue and bolster the future of the antiquated traditional fee-for-service (FFS) program, many studies show the value of MA from a cost and quality perspective. Now, the UCLA Center for Health Policy Research concludes that Californians enrolled in MA face slower growth in healthcare costs compared to those in FFS. Between 2013 and 2023, average monthly healthcare costs were $269 in counties with MA enrollment above 20%, compared with $481 in counties below 20%, or a 44% lower cost. Counties with higher MA enrollment saw an 11% increase in monthly healthcare costs over the decade (from $245 to $273), while counties with lower enrollment saw a 54% increase (from $361 to $557). #medicareadvantage #medicare https://www.beckerspayer.com/uncategorized/medicare-advantage-plans-keep-senior-care-costs-down-in-california-ucla MA Star Lawsuit Wrap-up This Modern Healthcare article tallies wins and losses

More Suits On No Surprises Act UnitedHealthcare joins the ranks of Elevance Health and Aetna in suing prominent provider entities over the No Surprises Act. United is suing Radiology Partners and its Arizona-based affiliate, Sonoran Radiology, alleging the companies have been “abusing” the No Surprises Act’s independent dispute resolution process. They argue the radiology provider behemoth is “funneling millions into the pockets of its private-equity owners.” The lawsuit comes after a Health Affairs study that shows that providers overwhelmingly win disputes and are awarded extremely high payments. Another new study also shows that surprise bills have fallen under the act based on data from states that had some protections and those that did not before the national law took effect. The study also notes that the prediction that the process would lower prices and save has not materialized. The fact remains the law needs major reform, including requiring the qualifying

State Insurance Commissioners Between The Proverbial Rock And A Hard Place Modern Healthcare has a good article reviewing the plight this year of the insurance commissioner. Healthcare costs are spiraling, in part due to utilization and in part higher prices throughout the sector. As well, the One Big Beautiful Bill Act (OBBBA) is anything but cheerful for most consumers reliant on the Exchanges. The bill will contract enrollment dramatically. This is leading to greater risk in the program and plan and product exits. The combination of the two have insurers putting in for massive rate hikes in the Exchange program. Insurance regulators do have a hard task. They need to ensure that insurance rates are affordable and consumers have access to the market. They need to protect against excessive hikes. But they also need to ensure a stable and secure insurance marketplace and that means granting sufficient rate hikes to

United Probe Expansive The U.S. Justice Department’s (DOJ) criminal division investigation into UnitedHealth Group has been bigger from the start or has expanded. Latest reports suggest that the company is under investigation into both how it reimburses its owned doctors as well as its pharmacy benefit’s manager’s (PBM — OptumRx) business and billing practices. Previously, it was reported the DOJ was investigating alleged Medicare Advantage (MA) risk adjustment fraud. In the past, I have talked about how federal regulators might go after vertical integration in the healthcare industry and United is the biggest example. Vertically integrated companies are alleged to unfairly inflate price/cost and skirt the minimum medical loss ratio (MLR) rules by having non-arm’s-length agreements with their related companies to keep revenue and margin within the overall enterprise. Could the PBM and physician investigations be touching this concept? It could also be the case that the incentives given owned

The Errors Of The No Surprises Act A great Health Affairs Forefront blog on the huge admin and steep payment costs in the No Surprises Act dispute resolution process. While Americans are being sheltered from surprise bills, the process is a mess and appears to be driving up overall costs in the healthcare system. Further, the process is being abused by a small sunset of greedy private equity-baced provider organizations. A few findings from the blog: This is a tragedy and Congress needs to get a backbone and amend this provider-slanted law. (Article may require a subscription.) #nsa #nosurprisesact #transparency #providers #healthplans #surprisebilling https://www.healthaffairs.org/content/forefront/substantial-costs-no-surprises-act-arbitration-process Humana In Enviable Position Compared With United Interesting article in Modern Healthcare comparing the relatively enviable position of Humana, with surging stock prices, right now vs. the current meltdown suffered by UnitedHealth Group. Of course, a great deal is attributable to the fact that Humana recognized

EU-U.S. Tariff Accord Has Drug Tariffs The EU-U.S. trade accord has established a 15% tariff rate for pharmaceuticals from the EU area. The vast majority of brand drugs consumed in the U.S. (60-75% based on value) are imported from the EU. Pharmaceuticals account for roughly a quarter of U.S. imports from the EU as measured by value. Generic drugs are exempt from the new agreement but remain subject to an earlier 2.5% tariff rate. The new tariff takes effect September 1. President Trump has indicated that he plans on drug tariffs of as much as 250% over time to promote onshoring. He indicated tariffs would start slowly but eventually rise to that level. Drug costs in the U.S. will likely rise on the brand side due to the tariffs. #drugpricing #tariffs #brands #generics https://abcnews.go.com/Business/us-eu-release-details-tariffs-cars-pharmaceuticals/story?id=124843094 A Second Budget Reconciliation Bill With Healthcare Cuts Conservatives in and out of government are looking

HHS Creates Federal Healthcare Advisory Committee The Department of Health and Human Services (HHS) announced the creation of a Federal Healthcare Advisory Committee, which will drive reforms to restore patient-centered care in the healthcare system. The committee would be a group of experts charged with delivering strategic recommendations to improve how care is financed and delivered across Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), and the Health Insurance Marketplace. Further, the committee would find ways to cut waste, reduce paperwork, expand preventive care, and modernize CMS programs with real-time data and accountability. CMS is currently accepting nominations for committee members and is looking for experts in chronic disease management, financing in federal health programs, and delivery system reform. Individuals can either be nominated by an organization or submit a nomination for themselves. The advisory committee will focus on developing: Additional article: https://www.cms.gov/newsroom/press-releases/hhs-drives-reform-restore-patient-centered-care-announces-request-nominations-members-serve-federal #cms #hhs #medicare #medicaid #chip #healthcarereform