#2025

Risk adjustment reform in Medicare Advantage could be put on the budget reconciliation table As I told you recently, the budget reconciliation process is mired down. There are a number of contentious points, including state and local taxation deductions and Medicaid spending cuts. At least on the Medicaid issues, moderates are lining up against conservatives and the prospects of a quick and successful bill passage are becoming more and more remote. Conservatives in each chamber, but more so in the House, want two core things on the spending front. They want enough spending reductions to pay for the extension of the 2017 Trump tax cuts. In addition, they think Medicaid is growing far too much and want to rein it in with deep structural reforms. Conservatives may lose on their Medicaid reform point if a bill is to pass, but the GOP may be looking for more spending reductions outside

Things do not look good for quick passage of a budget reconciliation bill. President Donald Trump congratulated Republicans in the House when they bowed to a Senate reconciliation framework that endorsed lower spending reductions. This was not because he didn’t favor reductions – he does – but he wanted the process to continue. But since the vote, it has become very clear that the GOP is struggling to come up with enough votes to pass a package that a majority in each chamber can support. Senate moderates and pragmatic conservatives insisted that reductions in the healthcare world should be minimal. The same holds true for about two dozen House GOP moderates. Conservatives and budget hawks in the House only agreed to the Senate framework after Trump and Speaker Mike Johnson committed to robust spending reductions. Disparate interests So how do you reconcile the two agendas, especially in the few short

Tariffs could have an ugly impact on healthcare costs and access I have gotten a number of inquiries from readers on the impact of new or potential tariffs on the healthcare system. To be honest, the picture is not terribly clear, but certainly new and future tariffs could demonstrably impact costs in healthcare. America’s healthcare imports reliance America is heavily reliant on imports for medical equipment, supplies, devices, finished pharmaceuticals, and active pharmaceutical ingredients (APIs) used to manufacture pharmaceuticals. Here are some quick facts: What is in force now and what is proposed? While a baseline tariff is in effect for most countries, the Trump administration did forestall for 90 days imposition of reciprocal tariffs. If those are eventually put in place, much greater tariffs would be in force. Heightened tariffs are in force for China and a few other countries. So far, the tariffs from the Trump administration clearly

The British news magazine is on point as to the inefficiency of hospitals My favorite news magazine, The Economist, had a great article on U.S. healthcare in its March 22, 2025 edition. The title said it all: “For all they care: How hospitals inflate America’s giant healthcare bill.” It is a subject I write about often and The Economist told it as well as anyone could. Let’s summarize what the magazine wrote and I will give you a few additional insights. As The Economist asks, who is to blame for the enormous costs in the American healthcare system, which are twice the average of other wealthy countries and yet outcomes are no better (actually far worse)? As the magazine notes, many point to drug makers and health plans. But The Economist featured hospitals as the major culprit. The Economist calls attention to the following key facts: The Economist blames the

Special Needs Plan enrollment booming A quick blog to tell you about enrollment growth in Medicare Advantage (MA) from March 2025 to April 2025. As I told you in previous blogs this year, the Centers for Medicare and Medicaid Services (CMS) enrollment statistics were delayed, but we appear to be receiving the monthly uploads on time now. But I am writing later in the month because of all the activities going on in healthcare. I told you that MA growth from 2024 to 2025 slowed down because of the financial woes of the MA industry. But the rolls are still growing due to aging and the popularity and value of MA compared with the archaic traditional Medicare (fee-for-service) program. What do the latest statistics show? As I have reported, growth from January 2024 to February 2025 was 4.39% or 1.468 million. (I used February 2025 because of issues with the

Utilization and poor rate hikes are crushing health plan margins Big Healthcare has been going through some major financial woes of late. Many of these big companies reported poor 2024 financials and some bad news is now popping up in 2025. Recently, UnitedHealth Group reported rising utilization, especially in its Medicare Advantage (MA) line. What was surprising is that United was bullish on MA for 2025 and added significantly to its rolls during the recent enrollment season while some other big companies contracted in MA. United also had to back off its 2025 investor guidance. So, what is up here? First, utilization has gone up considerably recently. A good share of this ties back to the tremendous drop in normal medical utilization during COVID. Utilization began recovering in 2022 but has really taken off since then. And there appears to be no sign of a significant slowdown right now. Second,

Trump executive order on drug pricing is both populist and shows policy sophistication Despite his drug price proposals during his first administration, many felt like President Donald Trump would shy away from attacking Big Pharma and potentially even work against the Inflation Reduction Act’s Medicare drug price negotiations. After all, he went back and forth on the issue in the presidential campaign. But since re-taking office, Trump has sent clear messages he wants to pursue drug price reform for America. First, after taking office, the Centers for Medicare and Medicaid Services (CMS) issued a statement indicating it was readying and taking seriously round two of negotiations, although it wanted greater transparency and input. Next, on Super Bowl Sunday, Trump appeared on Fox News bemoaning the price of GLP-1s. He even quoted statistics that GLP-1s in America were ten times more than prices in the U.K. Now, he has issued an

A lot changed in the final rule, but not in the final announcement NOTE: This Medicare Advantage Stars blog is co-published with Lilac Software ( https://lilacsoftware.com and https://lilacsoftware.com/guide-to-the-2026-medicare-advantage-part-d-star-final-announcement/ ). On April 7, the Centers for Medicare and Medicaid Services (CMS) issued the 2026 Final Announcement for Medicare Advantage (MA) and Part D plans. This annual announcement outlines the rates and other technical rate-setting details for the coming year as well as the final Star measures and details for Star Year 2026. In addition, the notice outlines potential changes to Star and display measures moving forward. Little changed of significance between the January Advance Notice and the April Final Announcement on the Star front except for renaming the Health Equity Index (HEI). Substantive comments were included in the final announcement. Although we wrote about this before, we have combed the final announcement and slightly altered our summary and analysis below for

I was touched by a recent New York Times opinion piece that Sen. John Fetterman, D-PA, wrote. Fetterman is the much-maligned senator elected in 2022 in a contest with Dr. Mehmet Oz, now administrator of the Centers for Medicare and Medicaid Services (CMS). Fetterman had a stroke during the campaign. He had clear trouble understanding questions during the campaign and equally had a hard time responding. He used technology-based assistive devices to get through debates and other appearances during the election. After winning rather handily in the end, the senator checked himself into a hospital for clinical depression shortly after assuming office. I said he was much-maligned because during the campaign and after, Fetterman was attacked as being unfit to hold the office of senator. It actually went beyond criticism to being mocked by some for his stroke and clinical depression. Too, he has come under intense criticism for his

Rates surge to relief of Medicare Advantage (MA) plans On April 7, the Centers for Medicare and Medicaid Services (CMS) issued the 2026 Final Announcement for Medicare Advantage (MA) and Part D plans. This annual announcement outlines the rates and other technical rate-setting details for the coming year as well as the final Star measures and details for Star Year 2026. In addition, the notice outlines potential changes to Star and display measures moving forward. This blog covers the non-Star issues in the Final Announcement – largely rates for 2026. On Monday, I will publish a blog in conjunction with Lilac Software on the final announcement from the standpoint of Stars changes. This will detail all the final Star measure changes, updates, and information discussed in the 2026 final MA and Part D Rule (released April 4) and the April 7 Final Announcement. 2026 MA rate proposal When the outgoing