drugchannel

Exchange Enrollment Fraud Examined Conservatives in and out of government made a case that there was major fraud in Exchange enrollments, especially after subsidies became more generous. The Paragon Health Institute and other conservative healthcare policy outfits did a great deal of research and it does seem credible. The GOP Congress was convinced and made some major changes to eligibility and enrollment in the Exchanges in the budget reconciliation bill. Congress also did not act to extend more generous premium subsidies set to expire at the end of the year. Now, the Centers for Medicare and Medicaid Services (CMS) has published data that continues to fuel the narrative of rampant broker fraud. Plans were sent data by CMS that found that 35% of enrollees did not have a claim in 2024. Before the pandemic, the data showed about 22% to 24% of enrollees did not have a claim. The phenomenon

Providers Readying Opposition To 340B Pilot Providers say they are in store for significant cash flow and operational problems if a 340B pilot proposed by the Health Resources and Services Administration (HRSA) goes into effect. Given interest in reform, HRSA proposed a voluntary pilot to allow brand drug makers to convert to a rebate on a small subset of drugs as opposed to an upfront discount in the drug discount program. The program is meant to help ensure availability of drugs to lower income populations. The 340B program pricing is 25%-50% less. Providers fear the pilot will eventually become how the entire program is run. Brand drug makers support the change as they feel the program is not living up to the original intent. Indeed, studies show that eligible providers, often hospitals, are not extending the discounts to low-income populations and instead are pocketing the discount. Indeed, some studies suggest

Eroding Employer Coverage Squeezes Average Americans A good Health Affairs Forefront Blog on eroding employer coverage and the impact on the lowest tier of working Americans. The article does a good job of discussing the chasm between what private healthcare coverage pays providers and what government programs pay. It notes that statistics bear out that price and not utilization largely drives spending growth in the employer market. It says U.S. hospitals charge privately insured patients nearly 2.5 times more than what Medicare pays for the exact same service. The articles disclaims that there is a cost-shift, but instead says it is related to provider market power. Well, I still think there is a cost-shift to some degree that is occurring, but I can also buy the author’s market power argument. The article notes that the price differences are a systemic issue and those who ultimately pay the price are “workers

Paragon Seeks More Healthcare Changes Paragon Health Institute is riding a wave of success after many of its core healthcare proposals ended up in the recent budget reconciliation bill. It is busy defending the legislation but also pushing for more reforms in a possible second budget bill. Paragon is now pushing the following for inclusion: #healthcare #healthcarereform #medicare #medicaid #medicareadvantage #exchanges https://www.fiercehealthcare.com/payers/conservative-policy-shop-paragon-health-previews-next-health-reform-priorities Aetna To Contract In MA Again After contracting products in MA dramatically in 2025, Aetna has announced it will end nearly 90 MA plans across 34 states in 2026. Preferred Provider Organization (PPO) products are being targeted. Further, health systems that sponsor Medicare Advantage (MA) plans are looking for opportunities to expand as big national plans reduce their enrollment by several million over the past few years and now into 2026. As was previously announced, UnitedHealthcare will shed as many as 600,000 lives in MA in 2026. Additional

Insurer Woes Dominate Headlines Clover reported meeting guidance to The Street, but saw its stock drop due to reports of higher expenses, especially related to Part D drug costs from the Inflation Reduction Act (IRA). Clover’s medical expenses were 88.4% of revenue and could climb in 2025 to just 89.5%. After decreasing full-year guidance by about half a billion dollars recently, Oscar Health missed earnings projections for Q2. Oscar had a net loss of $228 million, after reporting a net profit of $275 million in Q1. Its medical expense climbed to 91.1%. Oscar says sicker individuals are entering the Exchanges from Medicaid and healthier enrollees are leaving. The company is trimming its workforce to help save on administrative expense. It continues to maintain its financial targets, in part through its investments in the “ICHRA” program, created by Trump 45 to allow employers to seed premiums to employees who enroll in

Trump Wants 250% Drug Tariffs President Donald Trump threatened to impose tariffs of up to 250 percent on pharmaceutical imports, higher than the 200% discussed before. Tariffs would be minimal at first, but increase in 12 to 18 months to 150% and eventually 250%. Trump is seeking drug makers to re-shore production, but supply chains and other barriers make re-shoring completely very difficult. Tariffs would cause healthcare costs to spiral given our reliance on generics and brands from foreign countries. #drugpricing #trump #tariffs   https://thehill.com/homenews/administration/5436846-drug-import-tariffs-trump/ FTC Session Looks At High Drug Prices While pharmacy benefits managers (PBM) were a key focus of a Federal Trade Commission (FTC) listening session on high drug prices, it is clear that a great deal more drives obsene drug costs in America. The session concluded that a labyrinthine and opaque drug channel, a lack of transparency, patent thickets and other abuses also play a major

More Costs Will Be Pushed To Employees In 2026 A new Mercer study shows that half of large employers plan to shift costs onto employees as well as reduce benefit offerings. Further, due to rising spending, employers are looking for ways to reduce costs while at the same time being open to safeguarding coverage of popular weight loss drugs and well-being. But weight-loss drugs may have to be reined in due to the magnitude of costs. Employers expect costs to rise by 6% in 2025 and go up more in 2026. About 51% of large employers (500 or more employees) said they’re likely or very likely to shift more costs to employees, including raising deductibles or out-of-pocket maximums. This compares with 45% in 2024. About 35% of large employers said they plan to offer a non-traditional medical plan option in 2026, such as variable copay plans. #employercoverage #coverage #healthcare https://www.healthcaredive.com/news/mercer-large-employers-to-shift-health-plan-costs-onto-employ/756673

UnitedHealth Group’s Struggles UnitedHealth Group continues its financial cleanup by ousting executive leaders. Today, the company announced it will replace its CFO, John Rex. Wayne DeVeydt, a former managing director and operating partner at Bain Capital, will take on the role. UnitedHealth Group’s credit outlook also was downgraded to “negative” from “stable” by Fitch Ratings. Fitch blamed recent poor Q2 financials. Additional articles: https://www.modernhealthcare.com/insurance/mh-unitedhealth-credit-outlook-downgraded-fitch/ and https://www.healthcaredive.com/news/unitedhealth-replaces-cfo-john-rex-wayne-deveydt/756561/ (Some articles may require a subscription.) #unitedhealthcare #margins https://www.fiercehealthcare.com/payers/unitedhealth-group-cfo-john-rex-step-down-september Changes Forcing Hospitals To Rethink Operations I have argued that hospitals generally are the most bloated providers out there. And their perverse pricing system promotes such inefficiency. But hospitals now are worried about administrative costs. Rising healthcare costs, including drug costs, and labor continue to increase. But Medicaid and Medicare cuts are also impacting revenue. Some admin reductions are being made in anticipation of more cuts. I am not sure how committed the hospitals really

340B Program Reform Coming The Trump administration indicated in several drug price reform announcements it would seek to reform the 340B drug discount program. Now, it is proposing a pilot to go down the reform path. The Health Resources and Services Administration (HRSA) is launching a voluntary program to test drug makers paying rebates versus issuing discounts upfront to the qualifying providers, which include some hospitals, federally qualified health centers, and other safety-net providers. The pilot will cover just a small subset of drugs, including those for diabetes, rheumatoid arthritis, and heart failure. Some brand drug makers attempted to convert to rebates but were stopped by the Biden administration. The Trump administration appears on board, although hospitals and other providers oppose the changes. But 340B badly needs reforms as the drug discounts are not truly being passed on by most providers, who pocket the discounts. Additional articles: https://www.modernhealthcare.com/politics-regulation/mh-hrsa-340b-rebate-pilot-program-2026 (Some articles

More Insurer Financial News Medicare Advantage-dominant insurer Humana had better financial news than most insurers these days, but perhaps because of its earlier bad reports and its ongoing efforts to right its financial ship. Humana slightly raised its guidance on earnings, although it did have a decline in net income in Q2. Humana reported a net income of $545 million in the second quarter, down from a net income of $679 million during the same period last year. Lower MA revenue and high utilization spend continues to challenge Humana. The medical loss ratio was reported as 89.7%, high but in line with forecasts. Its Medicaid financials bucked trends. Its pharmacy unit was a bright spot. Humana says its projected loss in membership in MA will be lower than previously forecast – 500,000 vs. 550,000. In other news, Fitch affirmed UnitedHealth Group’s “AA-” rating July 30 but revised the company’s outlook to negative from