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Humana Reports Q3 Financial News Medicare Advantage (MA)-dominant Humana reported Q3 financial news today. Humana, the second biggest MA player, slashed its earnings guidance as enrollment ticks above initial expectations during open enrollment. It now projects to have about 425,000 fewer Medicare MA enrollees next year, not 500,000 fewer as previously anticipated. Investors worry that these additional members, driven by generous benefits, will increase medical expense more than projected. Humana says it is confident in projections despite higher enrollment numbers but says it can throttle back enrollment with several levers if needed. Operating expenses surged to $32.25 billion, up 11.75% year over year. Humana is spending more (hundreds of millions more) to better operations and increase Star ratings. Its Star Year 2026 rating actually dropped from a very low 25% of enrollment in 4 Star or greater plans to an even lower 20%. Third-quarter net income declined 59.6% to $194

Is UnitedHealthcare Gaming Medical Expense Regulation? A new study published in Health Affairs finds that UnitedHealthcare pays its owned providers at sister company Optum 17% more than those it does not own. And if United controls 25% or more of a market, that percentage increases to 61%. Researchers said the results suggest the company may be sidestepping government rules regarding calculation of medical expenses against premiums. If those rules are violated, rebates need to be sent to the government, employers, or individuals depending on the type of coverage. In effect, higher payments to owned providers would boost the so-called medical loss ratio (MLR) and more likely hit or exceed the required spending (usually 80% or 85%). United says the study is wrong. And the study clearly has some limitations. It looked at just 14 CPT medical codes and about 385,000 transactions. But these were frequently performed and high-cost procedures in

Government Shutdown End In Sight? After bipartisan weekend talks, Senate Majority Leader John Thune, R-SD, said Monday that he is “optimistic” lawmakers can strike a deal to reopen the government by the end of the week. He added that a stopgap spending bill could fund government through January or later to allow time to mark up and pass appropriations bills. The House will have to re-pass the temporary funding bill as it expires on November 21. Insiders say that Democrats could give in on their position to include Exchange subsidy extensions if a bill is pre-negotiated, likely with the president, or if GOP leaders announce a commitment to hold an up or down vote on an extension. Meanwhile, Rep. Marjorie Taylor Greene, R-GA, says Republicans deserve much of the blame for rising premiums, saying Republicans should have reformed the Affordable Care Act (ACA) sooner. “The Democrats passed Obamacare, but yet

Trump Administration Finalizes 340B Rebate Pilot The Trump administration has approved eight drugmakers’ rebate plans for the 340B drug discount pilot program that kicks off January 1. The pilot covers a selected group of 10 drug products from eight manufacturers who have submitted plans meeting specific criteria approved by the Health Resources and Services Administration (HRSA). The covered drugs include Eliquis, Enbrel, Farxiga, Imbruvica, Januvia, Jardiance, Stelara, Xarelto and multiple Novolog and Fiasp products. The program offers upfront discounts, but the administration wants to reform and bring greater transparency to the program to ensure it meets the intent of serving lower income Americans with discount drugs. Trump officials believe this will be accomplished with the greater scrutiny that will occur with retrospective rebates vs. upfront discounts. Numerous studies conclude that the program does not meet the original intent and that hospitals and other facilities do not in fact lower costs

Cigna Reports Strong Financial News The Cigna Group reported among the strongest news of any major health plan today. It posted a $1.9 billion profit in Q3, up from $739 million during the same period last year. Revenue reached $69.7 billion, a 9.5% increase year over year. Adjusted income from operations was $2.1 billion, less than 1% lower than third-quarter 2024. Its services entity Evernorth grew tremendously, including specialty pharmacy growth. Insurer Cigna Healthcare generated $10.8 billion in adjusted revenue, down 18.3% year over year – largely due to the sale of its Medicare Advantage line. Excluding that, adjusted revenues for the insurance business were up 6% compared to Q3 2024. The medical loss ratio reached 84.8%, a 2.4% increase year over year. Cigna executives said the company is expecting pressure on its margins with its announcement that it will begin phasing out rebates. In related news, if Express Scripts and other

CVS Health and Centene Report Q3 Financial News CVS Health, hit by a literal financial meltdown, reported relatively good recovery news for Q3 2025. Its troubled Aetna insurance business and pharmacy benefit management Caremark are recovering. Because of this, CVS Health is forecasting double-digit earnings growth in 2026. CVS Health had $103 billion in revenue for Q3. Revenue was up 7.8% year over year. The company recorded a Q3 net loss of $3.99 billion, compared with net income of $71 million, or 7 cents per share, in the same period for 2024. The decline was due to a $5.7 billion goodwill impairment charge from the healthcare delivery unit. Aetna had $36 billion in revenue in the third quarter, up 9% year over year. The medical cost ratio dropped from 95.2% to 92.8%.  Centene raised its yearly profit guidance despite ongoing struggles with health insurance Exchange spending and huge cuts to

United Reports Financial News; Big Plans Tighten Belts Investors cheered news from UnitedHealth Group that its efforts to get back to margins are working. United raised its full-year guidance Tuesday when announcing its Q3 results. United reported that net earnings fell 59.4% to $2.54 billion and earnings from operations dropped 50.4% to $4.31 billion. Revenue grew 12.2% to $113.16 billion. But these figures beat Wall Street expectations. United’s strategy has been to massively retrench in both Medicare Advantage (MA) and standalone Part D (PDP). United expects all its government lines of business to contract – MA, PDP, Medicaid, and the Exchanges. It expects to shed 600,000 in MA and has expanded some markets in the Exchanges but exited less profitable ones. Utilization and medical expense continues to be a challenge as its medical loss ratio was just short of 90% across all business lines. However, revenues from services entity Optum

Cigna’s Express Scripts Is Eliminating Rebates Spurred on by demands from the Trump administration to reform, Cigna’s Express Scripts pharmacy benefits manager (PBM) is phasing out prescription drug rebates for brand drugs. Rebates are issued by brand drug makers and usually do not go to consumers at the point of sale, causing brand drugs to have a high cost at the pharmacy. The rebates are issued by Big Pharma to gain preferred placement on drug formularies. Cigna will eliminate rebates in many of its commercial health plans in 2027. The phaseout will expand to Express Scripts clients starting in 2028 as the default option. The PBM’s phaseout program could mean a major transformation of the PBM industry, moving billions of dollars to offset consumer costs at the expense of rebates to insurers and employers as well as some amounts retained by PBMs. The new model will save members an average

Bipartisan Support For 340B Reform Senators on both sides of the political aisle expressed support for reforming the 340B drug discount program at a Senate HELP committee hearing today. While some expressed urgency for reform, others said that more caution needs to occur with reform to ensure rural facilities are not hurt. While hospitals have defended their use of the discounts over the years, independent studies question whether discounts are used to benefit the needy and that pricing at 340B-eligible hospitals can be more than at those ineligible for the program. In addition, many say that non-profit hospitals get far more benefit in tax exemptions than given back to poor Americans and charity care. Senators championed transparency around how revenue is generated in the program and how it is spent as well as more audit dollars. As well, senators want hospitals’ and other facilities’ aggressive debt collection practices curbed and

Molina Reels From Medical Expense Molina Healthcare reported Q3 financials and cut its 2025 earnings guidance for the third time this year. It is citing high medical costs particularly in its Exchange line of business. Molina is not the first to report the Exchange medical trend concern. The impacts will only be worse in 2026 if Exchange credits expire, risk increases, and enrollment drops. While Molina revenues beat analyst expectations, the plan missed on earnings. Molina is a Medicaid- and Exchange- dominant health plan with some Medicare Advantage (MA) lives. Molina posted a very-high medical loss ratio (MLR) of 92.6% in the quarter, up from 89.2% at the same time last year. Exchange plans hit a 95.6% MLR, up from 73% same time last year. Medicaid margins were strong but pressured from continued utilization. MA sees high utilization as well. In other news, a mix of Exchange pullouts and some expansions (surprisingly).