efficiency

Government Shutdown Continues: Trump and Oz Signal Openness On ACA Credits Democrats again voted down a GOP government funding bill on a fifth attempt. The same three Democratic caucus members supported the measure, but it fell short of the 60 votes needed to pass in the Senate. Democrats are seeking to tag the government closure as a healthcare shutdown, arguing business cannot resume unless expiring Exchange premium enhancements are extended and other healthcare cuts are rescinded. Polls seem to show that Republicans are being blamed more for the shutdown than the Democrats, but the split is razor thin at 52-49. A healthcare policy group KFF poll also finds that more than three-quarters of Americans want the tax credit enhancements to continue. And about 3 in 4 people said they will blame Trump or the GOP if they end. Republicans and Democrats both appear to be unrelenting in their position, but

SNP Benefits Continue Growth As more becomes known about Medicare Advantage (MA) 2026 benefits, one trend continues. Special Needs Plan (SNP) investments remain strong. Despite notable MA contraction overall again, SNP benefit packages kept growing for 2026. SNP benefit offerings will grow overall by 33%. Regular MA plans will see a contraction of 9%, with Institutional or I-SNPs dropping 6%. Dual Eligible or D-SNPs will grow by 15% and Chronic Care or C-SNP packages by 42%. D-SNPs still dominate overall numbers in terms of benefit packages and enrollment. Investments in C-SNPs are occurring as a hedge. C-SNPs carry increased regulatory requirements, but not to the extent of D-SNPs, which are undergoing major integration between the Medicare and Medicaid programs. The growth also is occurring because the ability to have too many SNP “look-alikes” was reined in through a recent rule. There are a few plans behind this major growth in

Humana Reports No Progress On Dismal Star Ratings A shocker announcement today. Humana, the second largest Medicare Advantage (MA) health plan, told regulators and investors that its Star ratings remained largely steady and did not recover from a catastrophic low. What’s more, based on how enrollment looks to pan out in 2026, its percentage of members in 4 Star or greater plans will drop from 25% in 2025 to 20% in 2026. Historically, Humana has been a high performer. In 2024, it had 94% of members in 4 Star or greater plans. The collapse of Star ratings for Humana in 2025 and now 2026 has cost billions in annual revenue. A good share of the drop in 2025 resulted from a lower Star rating in a nationwide contract with millions of enrollees. Humana was said to be addressing the concentration of enrollees in that one contract but apparently the time

Glimpse At MA Plan Contraction for 2026 The Medicare Plan Finder for Medicare plans went live today and gave us a glimpse of the plan contractions in Medicare Advantage (MA) for 2026. The recent release of the so-called landscape files did so as well. The number of plans nationwide remained about stable at 5,600 products, but this is a net of expansions and contractions. Major health plans contracted in a number of areas and especially contracted the Preferred Provider Organization (PPO) product. An ATI Advisory analysis says individual MA plans will decrease 9% compared with 2025. Individual excludes Special Needs Plans (SNPs) and employer group MA. Individual Health Maintenance Organizations (HMOs) and SNPs grew.  Chronic Care SNPs are up 42% from 2025. United county penetration is down 4% nationally, while Humana is down about 6.8% and Aetna down 4.4%. Both Elevance Health and Centene are expanding coverage, up 2.7% and

Trump Delivering On Drug Price Reductions? President Donald Trump came out swinging a few months ago by promising drug price reductions for Americans. And while his policymaking can be seen as messy, in this case it seems to be paying dividends. After recently announcing 100% tariffs on brand drugs, at least one big maker has come to the table with some concessions. Pfizer agreed to provide all of its prescription drugs in the Medicaid program at Trump’s desired most-favored-nation (MFN) drug pricing (where the U.S. would get the lowest price given in any developed country). Pfizer also agreed to offer many of its drugs at a significant discount direct to consumer. Savings will be as high as 85% and be about 50% on average. The administration indicates other deals are in the works. The White House also announced it was rolling out a direct-to-consumer website with medications at discounted prices.

2026 Medicare Advantage Fallout Despite the announcement of a stable Medicare Advantage (MA) environment in 2026 by the Centers for Medicare and Medicaid Services (CMS) last week, more predictions that 2026 could be a rocky road for both plans and enrollees. Modern Healthcare has a good article on the possible impacts. It says UnitedHealthcare, Humana, Aetna and Elevance Health have all canceled products. Many are announcing elimination of broker commissions for some products and trimmed benefits and networks. There also have been plan pullouts. Deft Research says a record 9.8 million, or 28%, could switch plans, compared with 23% in 2025. This is not those forced to switch due to plan terminations. Some plans, though, are expanding. And investments will continue to be made in Special Needs Plans (SNPs). Humana says it will maintain supplemental benefit investments. At the same time, at least 29 health systems are dropping MA plans

Federal Judge Strikes Risk Adjustment Audit Rule A federal court has vacated the 2023 Medicare Advantage (MA) Risk Adjustment Rule finalized during the Biden years. The court nullified the entire rule not just portions of it. I will write more on this in a blog in coming days. Humana challenged the rule in September 2023 on several grounds:  The court found that the Centers for Medicare and Medicaid Services (CMS) did not follow the procedural requirements of the Administrative Procedures Act. There were inadequate notice requirements. CMS did not justify its decisions via the comment period, either. Because of the potential harm to plans, the court vacated the rule entirely. The harm really would have been pronounced via retroactive application. Books are closed for prior periods for MA plans. Plans never even had a chance to reserve dollars for potential recoupments as the new rule was published years later. Indeed,

Regional Plans Not Faring Well Despite some studies suggesting regional plans are doing better than national payers during this financial downturn, HealthScape Advisors says regional nonprofit insurance companies are falling behind their larger competitors. It says that in 2024, 71% of regional nonprofit insurers ended the year with an operating loss. By comparison, 53% posted operating losses in 2023, and just 22% did in 2020. In other news, Humana will not pay agents and brokers for enrolling new members in many of its wider-network Medicare Advantage (MA) products for 2026. There will be 288 plans across 46 states and the District of Columbia impacted, about 80% of which are Preferred Provider Organizations (PPOs). Further, a bipartisan group of lawmakers has introduced legislation requiring MA plans to promptly pay out providers’ claims, with up to a $25,000 fine and interest accrual. Plans would have a 14-day deadline to pay electronically submitted,

C-SNPs Could Impact Dual Integration While Medicare Advantage (MA) Dual Eligible Special Needs Plans (D-SNP) membership is growing rapidly, a new Health Affairs Forefront blog calls out that growth in Chronic Care SNPs (C-SNP) could actually create barriers to greater integration of Medicare and Medicaid. The authors note the huge growth in C-SNP enrollment over the past few years. C-SNP product offerings have grown from 303 in 2024 to 372 in 2025. The total number of Medicare beneficiaries enrolled in C-SNPs has increased from 629,560 to 1,069,660 in that timeframe. In 2016, there were only 137 C-SNPs with 315,200 beneficiaries. The authors note that in 2025 there are now 125,638 full-benefit dual eligible individuals and 86,815 partial dual eligibles in C-SNPs. About 28% of the full-benefit dual eligible beneficiaries were previously enrolled in a plan that offered some form of integration in the prior year. The authors propose a few

Report Says MA Had $5.7B Underwriting Loss in 2024 Credit rating agency AM Best says that Medicare Advantage (MA) plans had a collective underwriting loss of $5.7B in 2024. From 2019 to 2022, MA made up 40% of underwriting gains and dropped to 20% in 2023. The agency said the losses came from the v28 risk adjustment model (being phased in from 2024 to 2026), lower Star ratings bonus revenue, and high utilization, inflation, and medical costs. About 3 out of 4 insurers with an MA concentration had a loss last year. #medicareadvantage #margins https://www.beckerspayer.com/payer/medicare-advantage/ma-struggles-cited-in-2024-5-7b-underwriting-loss-report ACA Rebates Announced Insurers are announcing the rebates they will pay back to enrollees and employers because medical loss ratios did not meet the minimum requirement of 80% or 85% as dictated by the Affordable Care Act (ACA). UnitedHealthcare announced it needs to pay out $359 million in rebates for 2024. Centene will pay out