budgetreconciliation

CMS Defends Flat Rates But Contraction Coming; UnitedHealth Crashes The Trump administration’s top Medicare official is defending the meager proposed Medicare Advantage (MA) increase for 2027, saying the administration is a big supporter of MA. Large plans stocks dropped dramatically today after the after-hours’ announcement yesterday. Analysts, trade groups, and plans are saying that yet another major contraction could occur in 2027. Benefits, products, and geographies began contracting in 2024, with major changes in 2025 and 2026. While the economic growth rate was generous, the administration proposed two risk adjustment changes that will take nearly all of the 5% trend away. Some expect a contraction of enrollment from the 2026 enrollment season when statistics come out soon. I have doubted this, but it very well could happen. Trump officials justify the risk adjustment changes and flat hike as an effort to combat overpayments in the program. In other news, UnitedHealth

MA Hit Hard By Proposed 2027 Rate Hike The Trump administration threw Medicare Advantage (MA) for a loop tonight as it issued the 2027 Advance Notice of rates and set a meager projected hike. MA plans just weathered a three-year phase-in (2024 to 2026) of the new v28 model. By my calculation, that took about 7% out of rates. With skyrocketing utilization, plans had hoped for a 2027 hike that exceeded the rough 5% hike in 2026. But Trump’s Center for Medicare and Medicaid Services (CMS) has now proposed two new risk adjustment reforms that take the almost 5% economic growth inflationary hike down dramatically – almost to 0. This will send stocks of major insurers dropping tomorrow for sure. The draft calls for a 0.09% payment increase. That is an increase of roughly $700 million in MA payments for 2027 compared with $25 billion in 2026! When considering estimated

CareFirst Sues on Star Ratings The now annual tradition of a Medicare Advantage (MA) plan suing over Star ratings continues. CareFirst BlueCross BlueShield is suing the Centers for Medicare and Medicaid Services (CMS) over its 2026 Star Ratings, alleging improper calculations cost the insurer an estimated $32 million in quality bonus payments. The plan says CMS departed from its own guidance when it used corrected patient safety data released after the close of the plan preview period to calculate Star Ratings. CareFirst says it received a 3.5-star rating instead of 4 Stars for a contract with about 30,000 enrollees. CareFirst says its Drug Plan Quality Improvement Measure for the contract was impacted by CMS contractor Acumen updating data after the close of the Plan Preview period. CMS has a hard rule that issues must be raised by plans before or during Plan Preview 1 and CareFirst says that CMS should

Health Plan CEOs Grilled On Affordability It was a bipartisan bashing of health plan CEOs on Capitol Hill today as both parties sought to protect themselves from healthcare affordability fallout. While the GOP was more sympathetic to the plan executives, they engaged in a great deal of attacks as well. The issues covered included the following: In other news, the House passed its final four appropriations bills and they now go to the Senate. This needs to happen soon to avoid a partial shutdown. Further, lawmakers accused CVS Health of violating antitrust laws by restricting independent pharmacies from working with digital pharmacy competitors to protect its market position. Last, Cigna said its plan to end drug rebates will reduce earnings by $500 million to $600 million. Additional articles: https://www.modernhealthcare.com/politics-regulation/mh-health-insurance-ceo-hearings-live-updates/ and https://www.bloomberg.com/news/articles/2026-01-21/cvs-health-may-have-violated-antitrust-laws-republican-lawmakers-say and https://www.fiercehealthcare.com/payers/insurance-ceos-set-back-back-congressional-hearings-affordability and https://www.beckerspayer.com/payer/house-committee-accuses-cvs-of-impeding-pharmacy-competition/ and https://www.modernhealthcare.com/insurance/mh-cigna-earnings-drug-rebates/ and https://www.beckerspayer.com/payer/vertical-integration-is-destroying-peoples-ability-to-access-care-payer-ceos-face-bipartisan-congressional-grilling/ and https://www.beckerspayer.com/payer/cvs-health-cuts-prior-authorizations-expands-rebate-sharing/ and https://thehill.com/homenews/house/5701980-house-government-funding-bills/ and https://www.healthcaredive.com/news/house-budget-committee-healthcare-affordability-consolidation/810149/ (Some articles may require a

UHG To Give Profits Back To Exchange Enrollees In an effort to forestall charges against it over healthcare affordability, UnitedHealth Group announced today that it plans to give profits from its Exchange plans back to customers in 2026. Several top executives from the biggest plans will appear before two House committees Thursday as the GOP seeks to insulate itself from the affordability crisis. UnitedHealthcare offers plans on the exchanges in 30 states, and it expanded its service area in 11 of those regions. It is unknown how much money that is or if United will make a profit. Additional articles: https://www.modernhealthcare.com/insurance/mh-unitedhealth-aca-rebates-congress/ and https://www.fiercehealthcare.com/payers/unitedhealth-ceo-hemsley-says-insurer-will-rebate-aca-profits-consumers and https://www.healthcaredive.com/news/unitedhealth-to-return-aca-profits-to-customers-hemsley/810183/ and https://www.modernhealthcare.com/politics-regulation/mh-stephen-hemsley-david-joyner-congress/ (Some articles may require a subscription.) #unitedthealthcare #healthplans #congress #affordability #exchanges https://thehill.com/policy/healthcare/5699770-unitedhealth-group-affordable-care-act-profits Cigna May Settle FTC Insulin Suit Cigna may settle the administrative Federal Trade Commission (FTC) case over allegations it artificially raised insulin prices. The FTC said it suspended the case to

Bipartisan Lawmakers Announce Deal To Keep Government Open A bipartisan deal was announced that would keep the federal government open for the rest of federal fiscal 2026 (to Septemeber 30) and enact long-sought healthcare changes. Given the bipartisan and bicameral nature of the deal, the bill likely can be passed by the end of July when the government would otherwise partially shut down. But some fear conservatives in each chamber could oppose the deal on budgetary grounds. Medicare telehealth coverage would be extended for two years. The Medicare hospital-at-home program would be extended for five years. The bill would also move further toward site-neutral payments in Medicare. Medicare Advantage (MA) plans would be required to maintain accurate provider lists and patients who visit providers erroneously due to bad data would only have to pay in-network rates. The bill doesn’t include limits on MA prior authorization. The bill also boosts pay to physicians participating in

Exchange Compromise Appears To Be Fizzling Prospects for a compromise bill in the Senate on an enhanced Exchange subsidy extension compromise appear to be fizzling. I have said the chance is at best 50-50 and now those odds are even dwindling. The negotiating group has failed to reach agreement on two of the biggest sticking points – allowing some or all of the dollars to move to health savings accounts (HSAs) and stricter “Hyde amendment” abortion restriction language. Meanwhile, some Democrats are also arguing the minimum premium of $5 or $10 per family per month is unaffordable for those who are low income. The GOP argues zero premiums have led to fraudulent enrollment. On the home front, states and plans are waiting to see what the fallout of an average 26% premium hike and 114% hike for subsidized individuals will mean. The latest statistics say that enrollment is only down

Trump’s “Great Healthcare Plan” President Donald Trump made a major healthcare announcement today, calling his reform framework “The Great Healthcare Plan.” But the announcement provided few details and leaves much of the work to Congress. GOP lawmakers do appear to be crafting ideas to limit exposure on healthcare unaffordability, but extending the expired enhanced subsidies may not be part of the deal. Here is the very skeletal outline of the president’s proposals: President Trump deserves a great deal of credit on drug price reform, but otherwise the deal is not well thought out and does not tackle the true reason for a lack of affordability – price in the market. I will give more details in a blog soon. Additional articles: https://www.fiercehealthcare.com/regulatory/trump-takes-aim-insurance-industry-unveiling-great-healthcare-plan and https://www.beckerspayer.com/policy-updates/trump-pitches-healthcare-policy-outline-aimed-at-lowering-costs-3-takeaways/ and https://www.cnn.com/2026/01/15/politics/trump-health-care-plan and https://apnews.com/article/trump-health-care-insurance-congress-savings-accounts-b7b4caae9ad14fda4646c42d3858202b and https://www.cnbc.com/amp/2026/01/15/trump-congress-aca-subsidies-health-care.html and https://www.whitehouse.gov/articles/2026/01/president-trump-unveils-the-great-healthcare-plan-to-lower-costs-and-deliver-money-directly-to-the-people/ and https://www.whitehouse.gov/wp-content/uploads/2026/01/The-Great-Healthcare-Plan.pdf and https://thehill.com/policy/healthcare/5691065-trump-health-care-affordability-plan/ and https://www.healthcaredive.com/news/trump-great-healthcare-plan-affordability-aca/809759/ and https://www.medpagetoday.com/publichealthpolicy/healthpolicy/119456 (Some articles may require a subscription.) #healthcare #healthcarereform https://www.modernhealthcare.com/politics-regulation/mh-trump-great-healthcare-plan-drugs-premiums MedPAC

CMS Actuary Releases 2024 Healthcare Spending Each year, the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary releases annual healthcare expenditures for the prior year. This year the release was delayed due to the government shutdown. The Actuary found that the U.S. spent $5.28 trillion on healthcare in 2024, a 7.2% increase from the prior year. The robust growth shows the challenges ahead for healthcare. It was the second consecutive year costs trended up more than 7%. Healthcare accounted for 18% of gross domestic product (GDP) in 2024, up slightly from 2023. Spending on hospital care grew 8.9% to $1.6 trillion. Spending on physician and clinical services increased 8.1% to $1.1 trillion. The Actuary said prices are a factor but non-price factors, such as utilization, were the driver. CMS’ actuaries attributed about 1% of the gain to population growth, 2.5% to price increases, and 3.6% to remaining

Exchange Compromise Is Slipping Sen. Bernie Moreno, R-OH, a leading supporter of a compromise on extending enhanced Exchange premium subsidies, says a deadline of the end of January has been set for having a compromise framework ready and that the main holdup remains abortion. The earlier goal of having a bill this week will not be met. Meanwhile, the Republican Study Committee, the largest caucus of conservatives in the House, unveiled a framework for a second reconciliation bill. Such a bill would only need a majority in each house to become law. The bill addresses affordability broadly and includes some provisions on healthcare. Additional article: https://thehill.com/homenews/house/5686728-gop-housing-health-energy-reforms/?tbref=hp #exchanges #healthcare #coverage #pbms #medicaid https://thehill.com/homenews/senate/5687461-senate-obamacare-compromise-deadline Government May Pull Back 340B Reform – For Now A court filing appears to show that the Department of Health and Human Services (HHS) will pull back on its contentious 340B Rebate Pilot, at least for now. The