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We are approaching the Medicare Advantage (MA) open enrollment season in October and many are asking what will happen in the program in terms of benefits, products, and geography. It is a good question given all of the member impacts in 2025 when major players and others significantly contracted or exited the program. MA is growing overall and that will remain the case Notwithstanding the significant financial turmoil of MA plans of late, the MA program is growing. That will not change. Since January 2020, MA enrollment has grown from 23.93 million to 35.44 million in July 2025, a growth of 11.51 million. From January 2020 to January 2024, average growth was 10%, ranging from 6% to 11%. Growth from January 2024 to February 2025 did come down considerably to 4.4%. Since February, MA continues to grow at a healthy pace overall. Between February and July, almost 500,000 lives were

At base, many national players just totally botched running a healthcare business A number of readers have asked me to put the national insurer meltdown in context. What explains the meltdown and how could insurers go from the envy of investors to hitting nearly rock bottom? My quick answer is that it is two-fold. First, some outside forces came to bear that chopped away at insurer margins. But second, and perhaps more important, most of these national health companies got greedy and lost their financial discipline. Outside forces The outside forces are a bit easier to articulate. The outside forces are both utilization increases and some government actions. Utilization and inflation hikes – Insurers had it good financially during the COVID pandemic. While they had the expenses of COVID treatment, regular healthcare utilization plummeted, especially in 2020 and 2021. Since the end of the pandemic, we have seen huge spikes

Some consensus on reforms, but many structural changes missing A recent Senate Health, Education, Labor, and Pension (HELP) Committee meeting was not terribly instructive but yielded some ideas where Democrats and Republicans could come together on at least incremental healthcare reforms. The committee heard testimony from various constituencies, including health plans. The panelists focused on the following: Greater price transparency – Panelists and lawmakers overwhelmingly viewed transparency as a key reform to bring greater efficiency to the healthcare system. The Trump 45 administration passed a transparency rule, which was backed and strengthened by the Biden administration and now Trump 47. Various congressional bills would further augment the transparency mandates on hospitals and health plans and make these provisions statutory vs. regulatory. Employer coverage transparency – The committee learned a lot about the opaqueness of price and costs in the employer world. One bill in Congress would require a set of

New healthcare model could take off with budget bill changes While the recent budget reconciliation bill, known as the One Big Beautiful Bill Act (OBBBA) is known for some very atrocious cuts to coverage, some are celebrating the major expansion of Direct Primary Care (DPC). Proponents see this expansion as one cost-effective way of expanding or maintaining coverage in the nation. What is DPC?  DPC is a healthcare model where patients pay a recurring, fixed fee (monthly or annually) directly to a primary care physician for access to a defined set of services. The model is not technically insurance and billing does not go through insurance. The physician bills the participant monthly or annually and the participant has access to all of the limited covered services offered by the doctor or practice. DPC usually offers a defined set of primary-care-oriented services, including routine checkups, chronic disease management, acute care visits,

New bill could bring unprecedented transparency and reform. Employer coverage costs have been growing profoundly the past several years. Average annual hikes have been between 6% and 9% and 2026 could see spending hikes at the top of the range. A great deal drives the consistent high growth in employer premiums: A sixth major culprit is the opagueness of the financial arrangements between health plans and employer groups. Health plans, acting as administrators, continually disadvantage employers in numerous ways and they do not disclose various underlying costs to the employer groups. Many employers are none the wiser that they have inefficient and bloated arrangements with health plan administrators. One example of these opague financial arrangements are the non-arms-length related party agreements hidden from employers. This has led some employers to demand more transparency, although health plans and pharmacy benefits managers (who sometimes have separate contracts) continue to shroud their financial

Both Republicans and Democrats want major Medicare Advantage reform. The July 22, 2025 hearing on Medicare Advantage (MA) by the House Ways and Means Subcommittees on Health and Oversight should be a wakeup call for MA plans. Of late, Capitol Hill has become far more active on MA issues. Democrats on the committee spoke of their usual gripes – overpayments to MA plans with little or no benefit and the need to augment the traditional Medicare fee-for-service (FFS) program. The striking change was the stance of Republicans, who generally supported the program but were on board for many of the same reforms Democrats proposed. Committee members on both sides cited what I think is the hyperbolic statistic from congressional policy arm MedPAC that MA is paid over $80 billion a year (over 20%) more vs. FFS. Democrats and some Republicans argued that MA was not saving the country money as

Despite financial woes in MA, enrollment keeps chugging along. A quick blog to tell you about enrollment growth in Medicare Advantage (MA) from June 2025 to July 2025. MA growth slowed down from 2024 to 2025 because of the financial woes of the MA industry. But the rolls are still growing due to aging and the popularity and value of MA compared with the archaic traditional Medicare (fee-for-service) program. What do the latest statistics show? Growth from January 2024 to February 2025 was 4.39% or 1.468 million. (I used February 2025 because of issues with the January 2025 statistics). Enrollment in MA reached 34.941M in February 2025. In July 2025, it reached 35.437M. MA enrollment grew about 80K from June to July and about 496K from February to July. How did Big MA do? From January 2024 to February 2025, Big Plan MA enrollment performed very poorly because of retrenchment

CMS is upping the ante on program audits, enforcement, and penalties Each year, the Centers for Medicare and Medicaid Services (CMS) issues its Part C and Part D Program Audit and Enforcement Report. I liked how CMS did it in years past, where actual plan audit scores as well as average scores by audit area were released. It gave you a great feel for where plans were struggling the most. Nonetheless, the report continues to be a good tool for Medicare Advantage (MA) and Part D plans (MA-PD or standalone PDP) to review and hone their compliance chops. Here are the major findings from this most recent report and last year’s (link at bottom for 2023 and 2024 reports).  Background CMS has been expanding the audits it does, using both internal and external expertise. In 2023, a total of 69 MA-PD contracts were audited — 31 of these contracts offered special needs plans

The budget bill will mean more turmoil and a steeper climb to financial recovery for health plans In a number of blogs recently, I have discussed the ongoing financial pain of health plans. I characterized health plan efforts to recover financially as cloudy and rocky going into 2026 and beyond. But I have yet to really layer in the impact of the One Big Beautiful Bill on health plan finances moving forward. To state it clearly, it makes things dramatically worse. I told you that health plans are already fighting a number of headwinds: In general, we have seen annual spending growth trends of 6% to 9% in the past few years. For 2026 and some years beyond, annual trends will hit the lower end of the range, with some lines of business (e.g., employer coverage) seeing costs trends at the high end. So how will the One Big Beautiful

Will Democrats successfully tar Republicans with budget bill healthcare cuts? Democrats are gearing up for the 2026 midterm elections and they think they have a crucial issue to help them win back control of at least one house of Congress – despite their political meltdown this past year. The hapless Democrats see the budget reconciliation cuts to healthcare as a pivotal issue to swing at least some control back to their party. Politics is more predictable than fickle. I looked at every midterm election since 1934. If I have this right, only on two occasions has the party in control of the White House gained seats in both houses at midterm elections. A third midterm sort of meets the test. In 1934, the Democrats under Franklin Delano Roosevelt gained 9 seats in each house. In 2002, George W. Bush’s Republicans gained 8 seats in the House and 2 in the