2024

More Crippling News On Employer Healthcare Costs I told you about a number of business surveys projecting huge increases in healthcare costs in 2027. The bad news continues. A new survey underscores the trend. Marsh, formerly Mercer, says employers’ healthcare costs are projected to spike again in 2027. Without intervention, the hike would be 11%. With benefit adjustments and other interventions, the hike will be 8.2%. This echoes the Aon survey which said costs will rise 9.5%. In other news, only 60% of employer health plans cover GLP-1 drugs for obesity, down from 72% last year. This is from the Business Group on Health. Additional articles: https://www.fiercehealthcare.com/payers/employers-health-benefits-costs-could-rise-82-2027-marsh-survey and https://www.modernhealthcare.com/insurance/mh-employer-health-plans-glp-1-coverage/ #employercoverage #healthcare #coverage #costs https://thehill.com/policy/healthcare/6066452-employer-health-costs-spike-2027 Elevance Will Exit LA Medicaid Elevance Health’s Healthy Blue joint venture will close at year’s end, impacting 290,000 Medicaid enrollees. Louisiana will run a special enrollment period from Oct. 15 to Nov. 16 for impacted members.

United To Cut 1,700 Codes From PA To fulfill its commitment to eliminate 30% of prior authorizations, UnitedHealthcare says it will make 1,700 codes exempt from the process as of October 1. Most of the eliminations are in commercial and individual plans. Additional article: https://www.fiercehealthcare.com/payers/unitedhealthcare-nix-prior-auth-1700-services-oct-1 and https://www.modernhealthcare.com/insurance/mh-unitedhealthcare-prior-authorization-requirements-codes/ #unitedhealthcare #healthplans #priorauthorization https://www.beckerspayer.com/policy-updates/unitedhealthcare-to-drop-prior-authorization-requirements-for-1700-services/ Hospitals Continue Attacks On Hospital Rule Hospital groups closed out the comment period on a proposed rule with additional attacks, arguing that the Centers for Medicare and Medicaid Services’ proposals to expand site neutral payments and reduce reimbursement to 340B facilities would have disastrous consequences. It argues it does not have the legal ability to make the 340B change. #hospitals #340b #siteneutral #medicare https://www.fiercehealthcare.com/providers/hospital-groups-rail-against-cms-proposed-340b-changes-site-neutral-payments JAMA Says More Complex Disenroll From MA Researchers from Johns Hopkins University have concluded that development of any new complex medical condition is linked to a 3.3 percentage-point increase in Medicare Advantage (MA) disenrollment, with

Trump Strikes New Drug Deals Nine additional pharmaceutical companies will offer significant drug price concessions, including agreeing to introduce new drugs at most-favored nation (MFN) pricing and extending such lower costs to the Medicaid program. The nine new companies represent mid-size biotech and drug companies. The new agreements with the Trump administration mirror earlier deals, including selling at discounts on the TrumpRx website. A Harvard Medical School and Urban Institute analysis estimates the Medicaid program could save states more than $8 billion annually if applied to 82 high-cost brand-name drugs. The companies will not be subjected to MFN in Medicare (at least immediately) or new tariffs. They too will invest in America and provide active ingredients directly to the U.S. The White House says the 26 companies so far represent 90% of the domestic pharmaceutical market. It also took credit for prescription drug prices falling 3.1% over the 12 months ending

Proactive Enrollment Caps Could Be Used in MA in 2027 The Centers for Medicare and Medicaid Services (CMS) is now allowing Medicare Advantage (MA) plans to file for prospective enrollment caps in 2027 that could be used as a way to limit financial exposure. It could be yet another tool in the toolbox for plans seeking to stay in an area but fearful of too much risk. CMS says it will help stem further exits in areas. It appears existing regulatory authority is being used, perhaps more expansively. Previously, CMS only approved caps after an insurer’s enrollment ballooned to a point at which members’ health and safety was jeopardized. Network Health has applied for such a cap in 2027. Several protections exist in the regulation. #medicareadvantage #enrollment https://www.modernhealthcare.com/insurance/mh-medicare-advantage-enrollment-caps-2027-cms/ Hospitals Bemoaning Expansion Of Site Neutral Payments A number of hospitals are bemoaning the potential impact on the expansion of site neutral

Prominent Health Plan, PBM, And Provider Fraud Lawsuits A number of alleged fraud lawsuits have been filed recently, including the following: The Villages (Fla.) Health, a primary and specialty care provider group, has agreed to pay $541.5 million to resolve allegations it violated the False Claims Act (FCA) by submitting improper Medicare Advantage (MA) diagnosis codes. Similarly, Monogram Health agreed to pay $2.4 million to resolve allegations that it violated the FCA by submitting false diagnosis codes to increase payments in MA. Maryland’s attorney general filed a lawsuit against UnitedHealth Group and Optum, seeking $380 million in damages stemming from alleged issues administering Medicaid behavioral health. Florida’s attorney general sued Express Scripts and Prime Therapeutics, alleging arrangements between the two pharmacy benefits managers allowed Prime Therapeutics to improperly cut pharmacy payments by up to 20% and pass on savings to Express Scripts. Additional articles: https://www.beckerspayer.com/legal/villages-health-to-pay-541-5m-to-settle-medicare-advantage-fraud-allegations/ and https://www.beckerspayer.com/legal/maryland-sues-unitedhealth-for-380m-over-medicaid-administration-issues/ and https://www.healthcaredive.com/news/the-villages-health-medicare-overbilling-settlement-doj-humana/828915/ and https://www.modernhealthcare.com/insurance/mh-express-scripts-prime-therapeutics-florida-antitrust/ and https://www.modernhealthcare.com/legal/mh-villages-health-system-doj-settlement/ and

Plans, Providers Urge Rejection Of State-Directed Payments Rule Health plan and provider groups are joining together to oppose the Trump administration’s draft regulation implementing state-directed payment reforms and limitations in Medicaid. Changes were made in the One Big Beautiful Bill Act (OBBBA), but opponents say the draft rule goes well beyond what the statute outlines. The plans and providers may be right about the rule exceeding statutory authority. At the same time, the use of state-directed payments have been abused and do need to be reined in. #medicaid #obbba #coverage https://www.modernhealthcare.com/politics-regulation/mh-cms-medicaid-state-directed-payments-rule-pushback/ NSA Dispute Costs $22 Billion A new analysis from Georgetown University finds that total costs associated with the No Surprises Act’s dispute resolution process reached $22.4 billion at the end of 2025 after four years of the law. About $15.6 billion came from payments to providers that exceeded in-network rates. In addition, $4.2 billion came from administrative costs. About

Medicaid GLP-1 Program Getting Little Traction President Donald Trump’s deal offering states discounted pricing on GLP-1 drugs for Medicaid patients is getting little traction. Only Indiana has publicly signed on, while 29 state Medicaid programs have said they will not participate and 14 more did not respond. States are citing budget costs if they joined. #glp1s #weightlossdrugs https://www.beckerspayer.com/payer/medicaid/states-reject-trumps-discounted-medicaid-glp-1-deal 2025 Health Plan Losses An analysis by Mark Farrah Associates says health insurers collectively lost $10.4 billion on underwriting in 2025 in the individual, employer-group, Medicare Advantage (MA) and managed Medicaid segments, a dramatic deterioration from $1.7 billion the year before. The individual and MA segments accounted for the bulk of the underwriting losses. The analysis represented about 80% of the industry. #healthplans #margins https://www.beckerspayer.com/financial/health-plan-underwriting-losses-balloon-to-10-4b-report Coming Medicaid Woes Despite some financial stability in 2026 at Medicaid health plans, the story could soon change as Medicaid work requirements and coming limits on state

Moody’s Calls Health Plan Recovery Uneven And Challenging Bond rater and investment analyst Moody’s published a report on health plan finance and it echoes much of what I concluded from Q2 financial announcements — there are positive signs coming out of the results but pressures and challenges remain. Overall, Moody’s says health plans surpassed investors’ expectations and most boosted their outlook, but high medical costs are still a key factor in recovery. Margin recovery and executing on financial plans to meet investor demands remains a challenge and is uneven across plans. Interestingly, it notes that “… a significant portion of the quarter’s margin improvement reflected favorable prior-year reserve development and non-recurring items rather than solely underlying trend.” Moody’s notes that Medicare Advantage (MA) is one of the biggest challenges, with exits from underperforming markets and retrenchment focused on higher margin populations. Products and benefits have been repriced. It opines that

Scan Execs Frame What Needs To Be Done With Stars A great Healthcare Forefront blog by Scan CEO Sachin Jain and his chief legal officer discussing the current state of Medicare Advantage (MA) Stars, the various litigation, what is wrong with the Centers for Medicare and Medicaid Services’ (CMS) approach, and what the agency should do about it. They argue CMS has made the program such that sophisticated plans cannot reliably reconstruct how a score is produced. It notes the legal quandary CMS finds itself in post the Clover decision. The Scan execs argue that CMS needs to step back and remake the system based on a smaller number of clinical measures and member experience. As they note, CMS is moving toward this with the SY 2029 restructure. CMS now needs to correct the legal and regulatory deficiencies. #medicareadvantage #stars #quality #cms https://www.healthaffairs.org/content/forefront/stars-docket-medicare-advantage-quality-ratings-trial CMS Pushing Exchange Disenrollments The Centers for

More Carriers To Reduce MA Footprint in 2027 Humana and Centene both announced they will reduce their Medicare Advantage (MA) footprint in 2027. Centene will exit in Oklahoma, Tennessee, and Hawaii, cut 158 counties and cancel 133 plans, impacting 340,000. Humana will reduce its county penetration and impact 600,000. All this is tied to a retrenchment to get to profitability. #medicareadvantage #margins #enrollment https://www.modernhealthcare.com/insurance/mh-centene-medicare-advantage-plans-states Aon Says Employer Healthcare To Rise Almost 10% A clear data point that healthcare costs remain out of control. Aon estimates that employer healthcare costs will rise 9.5% in 2027, averaging more than $19,000 per employee. Aon says the surge is tied to higher patient volumes, more individuals with chronic conditions, and more expensive prescription drugs. Hikes were 9.5% in 2026, 9% in 025 and 8.5% in 2024. Additional article: https://www.modernhealthcare.com/insurance/mh-employer-healthcare-costs-2027-aon/ #employercoverage #costs #healthcare https://www.beckerspayer.com/financial/employer-healthcare-costs-to-top-19k-per-worker-5-things-to-know/ Oregon Approves Huge Exchange Premium Surge Oregon regulators approved an average 21.6%