#2025

Two big forces are coming together to erode coverage and increase the uninsured and underinsured It has been on my mind of late that two forces are coming together to further erode coverage in America. Surging utilization The first is surging utilization. Some of it can be explained – a return to normal post pandemic utilization, increased expensive drug introductions, aging and more. But some of it cannot. While healthcare actuaries anticipate a slowing of annual healthcare growth in a few years, I think we could be in a new era of even more robust annual spending. After all, right now we are seeing cost spikes of 6% to 9% a year. This is especially true for employer and commercial coverage. When utilization spikes, as much as employers try to protect employees, more costs are foisted upon workers or coverage evaporates. OBBBA’s impact The second is the coverage losses in

Trends impacting health plans point to the need for major transformation It is summer and people are awaiting the one last respite of Labor Day before the hustle and bustle of life and work increase again. So, I will keep this week’s blogs short – short that is for me. The truth, though, is that the hustle and bustle have already hit healthcare this summer, which is certain to complicate many of our lives this Fall. Healthcare changes impacting health plans With all that has gone on since Donald Trump returned to office, I thought it might be good to summarize the health plan landscape. Here goes: What will the coming impacts be? Plans already had a relatively long road to financial recovery, but the OBBBA, MA risk adjustment audits, other possible MA risk adjustment changes, and the all-LOB PA reforms could create even more overall uncertainty even with the

Washington continues with talk of a second budget reconciliation bill coming sometime later this year. The impetus comes from a few things. There is pressure within the two Republican caucuses to seriously deal with rising deficits and enact deeper spending cuts. The One Big Beautiful Bill Act (OBBBA) cut healthcare by over $1 trillion. But due to new tax cuts and extensions, the deficit over the ten-year budget horizon goes up by $3.4 trillion, more if you include interest costs. The debt limit was actually increased by $5 trillion in the bill. And the U.S. government has just hit total debt of $37 trillion. The other issue is a political one. Conservative members of the GOP caucuses say they got explicit promises that they will have a shot at passing deeper healthcare cuts later this year. They indicate the commitments came from the president and their leaders in each chamber

A quick blog to tell you about enrollment growth in Medicare Advantage (MA) from July 2025 to August 2025. MA growth slowed down from 2024 to 2025 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? Growth from January 2024 to February 2025 was 4.39% or 1.468 million. (I used February 2025 because of issues with the January 2025 statistics). Enrollment in MA reached 34.941M in February 2025. In August 2025, it reached 35.528M. MA enrollment grew about 91K from July to August and about 587K from February to August. How did Big MA do? From January 2024 to February 2025, Big Plan MA enrollment performed very poorly because of retrenchment among some of these plans. Big MA grew by

We are approaching the Medicare Advantage (MA) open enrollment season in October and many are asking what will happen in the program in terms of benefits, products, and geography. It is a good question given all of the member impacts in 2025 when major players and others significantly contracted or exited the program. MA is growing overall and that will remain the case Notwithstanding the significant financial turmoil of MA plans of late, the MA program is growing. That will not change. Since January 2020, MA enrollment has grown from 23.93 million to 35.44 million in July 2025, a growth of 11.51 million. From January 2020 to January 2024, average growth was 10%, ranging from 6% to 11%. Growth from January 2024 to February 2025 did come down considerably to 4.4%. Since February, MA continues to grow at a healthy pace overall. Between February and July, almost 500,000 lives were

At base, many national players just totally botched running a healthcare business A number of readers have asked me to put the national insurer meltdown in context. What explains the meltdown and how could insurers go from the envy of investors to hitting nearly rock bottom? My quick answer is that it is two-fold. First, some outside forces came to bear that chopped away at insurer margins. But second, and perhaps more important, most of these national health companies got greedy and lost their financial discipline. Outside forces The outside forces are a bit easier to articulate. The outside forces are both utilization increases and some government actions. Utilization and inflation hikes – Insurers had it good financially during the COVID pandemic. While they had the expenses of COVID treatment, regular healthcare utilization plummeted, especially in 2020 and 2021. Since the end of the pandemic, we have seen huge spikes

Some consensus on reforms, but many structural changes missing A recent Senate Health, Education, Labor, and Pension (HELP) Committee meeting was not terribly instructive but yielded some ideas where Democrats and Republicans could come together on at least incremental healthcare reforms. The committee heard testimony from various constituencies, including health plans. The panelists focused on the following: Greater price transparency – Panelists and lawmakers overwhelmingly viewed transparency as a key reform to bring greater efficiency to the healthcare system. The Trump 45 administration passed a transparency rule, which was backed and strengthened by the Biden administration and now Trump 47. Various congressional bills would further augment the transparency mandates on hospitals and health plans and make these provisions statutory vs. regulatory. Employer coverage transparency – The committee learned a lot about the opaqueness of price and costs in the employer world. One bill in Congress would require a set of

New healthcare model could take off with budget bill changes While the recent budget reconciliation bill, known as the One Big Beautiful Bill Act (OBBBA) is known for some very atrocious cuts to coverage, some are celebrating the major expansion of Direct Primary Care (DPC). Proponents see this expansion as one cost-effective way of expanding or maintaining coverage in the nation. What is DPC?  DPC is a healthcare model where patients pay a recurring, fixed fee (monthly or annually) directly to a primary care physician for access to a defined set of services. The model is not technically insurance and billing does not go through insurance. The physician bills the participant monthly or annually and the participant has access to all of the limited covered services offered by the doctor or practice. DPC usually offers a defined set of primary-care-oriented services, including routine checkups, chronic disease management, acute care visits,

New bill could bring unprecedented transparency and reform. Employer coverage costs have been growing profoundly the past several years. Average annual hikes have been between 6% and 9% and 2026 could see spending hikes at the top of the range. A great deal drives the consistent high growth in employer premiums: A sixth major culprit is the opagueness of the financial arrangements between health plans and employer groups. Health plans, acting as administrators, continually disadvantage employers in numerous ways and they do not disclose various underlying costs to the employer groups. Many employers are none the wiser that they have inefficient and bloated arrangements with health plan administrators. One example of these opague financial arrangements are the non-arms-length related party agreements hidden from employers. This has led some employers to demand more transparency, although health plans and pharmacy benefits managers (who sometimes have separate contracts) continue to shroud their financial

Both Republicans and Democrats want major Medicare Advantage reform. The July 22, 2025 hearing on Medicare Advantage (MA) by the House Ways and Means Subcommittees on Health and Oversight should be a wakeup call for MA plans. Of late, Capitol Hill has become far more active on MA issues. Democrats on the committee spoke of their usual gripes – overpayments to MA plans with little or no benefit and the need to augment the traditional Medicare fee-for-service (FFS) program. The striking change was the stance of Republicans, who generally supported the program but were on board for many of the same reforms Democrats proposed. Committee members on both sides cited what I think is the hyperbolic statistic from congressional policy arm MedPAC that MA is paid over $80 billion a year (over 20%) more vs. FFS. Democrats and some Republicans argued that MA was not saving the country money as