employers

Plans, Providers Urge Rejection Of State-Directed Payments Rule Health plan and provider groups are joining together to oppose the Trump administration’s draft regulation implementing state-directed payment reforms and limitations in Medicaid. Changes were made in the One Big Beautiful Bill Act (OBBBA), but opponents say the draft rule goes well beyond what the statute outlines. The plans and providers may be right about the rule exceeding statutory authority. At the same time, the use of state-directed payments have been abused and do need to be reined in. #medicaid #obbba #coverage https://www.modernhealthcare.com/politics-regulation/mh-cms-medicaid-state-directed-payments-rule-pushback/ NSA Dispute Costs $22 Billion A new analysis from Georgetown University finds that total costs associated with the No Surprises Act’s dispute resolution process reached $22.4 billion at the end of 2025 after four years of the law. About $15.6 billion came from payments to providers that exceeded in-network rates. In addition, $4.2 billion came from administrative costs. About

Medicaid GLP-1 Program Getting Little Traction President Donald Trump’s deal offering states discounted pricing on GLP-1 drugs for Medicaid patients is getting little traction. Only Indiana has publicly signed on, while 29 state Medicaid programs have said they will not participate and 14 more did not respond. States are citing budget costs if they joined. #glp1s #weightlossdrugs https://www.beckerspayer.com/payer/medicaid/states-reject-trumps-discounted-medicaid-glp-1-deal 2025 Health Plan Losses An analysis by Mark Farrah Associates says health insurers collectively lost $10.4 billion on underwriting in 2025 in the individual, employer-group, Medicare Advantage (MA) and managed Medicaid segments, a dramatic deterioration from $1.7 billion the year before. The individual and MA segments accounted for the bulk of the underwriting losses. The analysis represented about 80% of the industry. #healthplans #margins https://www.beckerspayer.com/financial/health-plan-underwriting-losses-balloon-to-10-4b-report Coming Medicaid Woes Despite some financial stability in 2026 at Medicaid health plans, the story could soon change as Medicaid work requirements and coming limits on state

Moody’s Calls Health Plan Recovery Uneven And Challenging Bond rater and investment analyst Moody’s published a report on health plan finance and it echoes much of what I concluded from Q2 financial announcements — there are positive signs coming out of the results but pressures and challenges remain. Overall, Moody’s says health plans surpassed investors’ expectations and most boosted their outlook, but high medical costs are still a key factor in recovery. Margin recovery and executing on financial plans to meet investor demands remains a challenge and is uneven across plans. Interestingly, it notes that “… a significant portion of the quarter’s margin improvement reflected favorable prior-year reserve development and non-recurring items rather than solely underlying trend.” Moody’s notes that Medicare Advantage (MA) is one of the biggest challenges, with exits from underperforming markets and retrenchment focused on higher margin populations. Products and benefits have been repriced. It opines that

Scan Execs Frame What Needs To Be Done With Stars A great Healthcare Forefront blog by Scan CEO Sachin Jain and his chief legal officer discussing the current state of Medicare Advantage (MA) Stars, the various litigation, what is wrong with the Centers for Medicare and Medicaid Services’ (CMS) approach, and what the agency should do about it. They argue CMS has made the program such that sophisticated plans cannot reliably reconstruct how a score is produced. It notes the legal quandary CMS finds itself in post the Clover decision. The Scan execs argue that CMS needs to step back and remake the system based on a smaller number of clinical measures and member experience. As they note, CMS is moving toward this with the SY 2029 restructure. CMS now needs to correct the legal and regulatory deficiencies. #medicareadvantage #stars #quality #cms https://www.healthaffairs.org/content/forefront/stars-docket-medicare-advantage-quality-ratings-trial CMS Pushing Exchange Disenrollments The Centers for

More Carriers To Reduce MA Footprint in 2027 Humana and Centene both announced they will reduce their Medicare Advantage (MA) footprint in 2027. Centene will exit in Oklahoma, Tennessee, and Hawaii, cut 158 counties and cancel 133 plans, impacting 340,000. Humana will reduce its county penetration and impact 600,000. All this is tied to a retrenchment to get to profitability. #medicareadvantage #margins #enrollment https://www.modernhealthcare.com/insurance/mh-centene-medicare-advantage-plans-states Aon Says Employer Healthcare To Rise Almost 10% A clear data point that healthcare costs remain out of control. Aon estimates that employer healthcare costs will rise 9.5% in 2027, averaging more than $19,000 per employee. Aon says the surge is tied to higher patient volumes, more individuals with chronic conditions, and more expensive prescription drugs. Hikes were 9.5% in 2026, 9% in 025 and 8.5% in 2024. Additional article: https://www.modernhealthcare.com/insurance/mh-employer-healthcare-costs-2027-aon/ #employercoverage #costs #healthcare https://www.beckerspayer.com/financial/employer-healthcare-costs-to-top-19k-per-worker-5-things-to-know/ Oregon Approves Huge Exchange Premium Surge Oregon regulators approved an average 21.6%

Provider Wins In NSA Disputes Becoming Outlandish More evidence that the terribly flawed No Surprises Act dispute process is getting more outlandish, yet lawmakers lack the courage to fix it. Meanwhile, awards continue to drive costs in the system in two ways – the sheer cost of the awards and driving up price points in the system overall. A new federal analysis says disputes rose almost 75% to more than 2.5 million from 2024 to 2025. CMS originally projected just 17,000 cases a year when the law passed. Providers won 83.6% of disputes in Q4 2025, roughly consistent since 2023. Provider groups of course claim the dollars awarded are merited. Health plans say providers are abusing the system and the process is incredibly slanted to providers.  A long-delayed reform rule is likely destined to do little to change the paradigm. It is also true that a small subset of certain

JD Power Finds Decline in MA Satisfaction A new study by JD Power finds that satisfaction with Medicare Advantage (MA) plans has declined for a second year. Overall satisfaction was 611 on a 1,000-point scale, down 12 points from the 2025 report and 41 points from 2024.  The study identified declines across the member experience, with the steepest declines over two years in how much the plan is saving time and money (down 51 points); level of trust (down 49 points); and coverage options to meet individuals’ needs (down by 47 points). The decline is obviously related to major cutbacks in access and benefits as the industry grapples with realignment and margin recovery. In other news, Modern Healthcare covers the Q2 financial recovery by plans and outlook for continued improvement. I covered this topic in a blog here: https://www.healthcarelabyrinth.com/are-insurers-turning-the-financial-corner-yes-but-there-is-more-work-to-be-done/ . Additional article: https://www.fiercehealthcare.com/payers/jd-power-member-satisfaction-medicare-advantage-plans-continues-slide #medicareadvantage #margins https://www.modernhealthcare.com/insurance/mh-unitedhealth-humana-aetna-medicare-advantage-2027 PA Rule Clarified The

Trump Reining In Medicaid Waivers, Further Complicating State Medicaid Budgets The Centers for Medicare and Medicaid Services (CMS) is paring back on 1115 research and demonstration waivers. Critics say this could increase enrollee churn, undercut finances for providers, and impact innovation. States are already grappling with work requirements as well as reductions to provider taxes used to fund the state share or contribution. The administration argues that the Medicaid footprint has grown considerably over the years, funded inappropriate areas, and has not lived up to budget neutrality.  The administration has defunded social needs waivers and will not renew continuous coverage enrollment.   CMS has informally notified Arkansas that its private option Medicaid expansion under the Affordable Care Act of 2010 will not be renewed. Arkansas is seeking a two-year extension after CMS rejected its five-year renewal. It impacts 200,000 enrollees. In other news, California’s Medicaid program, Medi-Cal, will reduce its

KFF Finds $60B At Risk With Directed Payment Reforms Healthcare policy group KFF finds that an estimated $60 billion in federal Medicaid spending in 37 states (including the District of Columbia) would likely exceed new federal limits on state directed payments for hospital services once fully implemented under the One Big Beautiful Bill Act (OBBBA). The eight states with the biggest potential reductions in Medicaid payments to hospitals are: California ($7.4 billion), Illinois ($4.0 billion), Kentucky ($3.9 billion), Texas ($3.5 billion), North Carolina ($3.4 billion), Louisiana ($3.3 billion), Arizona ($3.0 billion) and Michigan ($2.6 billion). This accounts for about half of the total. While controversial, there is little doubt in my mind that intergovernmental transfers, provider taxes, and state directed payments have been abused by many states and some reforms are needed. Additional article: https://www.kff.org/medicaid/analysis-at-least-37-states-have-medicaid-state-directed-payments-for-hospital-services-that-could-be-reduced-by-the-2025-reconciliation-law-limits/ #medicaid #obbba #healthcare #coverage https://www.kff.org/medicaid/at-least-37-states-have-medicaid-state-directed-payments-for-hospital-services-that-could-be-reduced-by-the-2025-reconciliation-law-limits/ KFF Studies PA Denials A new analysis by healthcare policy

Aetna’s VBC Approach Paying Dividends CVS Health’s Aetna health plan is seeing its value-based care (VBC) investments paying off in terms of preventive care metrics and cost savings. The insurer looked at 20 different measures for individuals in its Medicare Advantage (MA) plans between VBC models and fee-for-service (FFS) reimbursement. It determined that VBC arrangements resulted in better results across 17 measures. About 43% more members controlled their HbA1C and 34% had controlled blood pressure. About 20% more patients were screened for colorectal cancer and there were 7% fewer hospitalizations. VBC providers generated $315 million in savings during plan year 2023, 2.6% higher than FFS providers. VBC risk arrangements vary. Providers in two-sided risk models had the strongest performance across multiple measures in the report. Aetna says that, given apprehension and differences in maturity in the provider market, it enters into various levels of VBC models with providers. Report: https://www.aetna.com/content/dam/aetna/pdfs/aetnacom/insights/aetna-medicare-vbc-whitepaper.pdf