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February 11, 2025

Humana Continues Digging Out Of Its Financial Troubles Medicare Advantage (MA)-dominant Humana told investors today that it was prioritizing efficiency as it continues to dig out from financial woes due to the MA rate and regulatory landscape. Due to uncertainty, including on rates, it is not yet able to give guidance going into 2026 but affirmed its guidance for the current year. Humana is also suing the Centers for Medicare and Medicaid Services (CMS) over its 2025 Star ratings, accusing the agency of gross regulatory violations and incompetence in administering the quality bonus program. Humana posted a $693 million loss in Q4, an increase from a Q3 loss of $541 million. The company also halved its profits for the full year 2024 compared to 2023, posting $1.2 billion. Humana earned $2.5 billion in profit for 2023. Humana expects to lose up to 550,000 MA members this year. It lost 445,000

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February 10, 2025

Trump May Impose Tariffs On Drugs, But Calls Pricing Unfair And Wants Change In an exclusive Super Bowl interview on Fox News, President Donald Trump seemingly endorsed tariffs on drugs but said in the end drug costs would come down. Many are worried that tariffs on drugs and other medical devices will further drive up healthcare costs. But Trump seemed to signal he intends to try to end the fundamental unfairness of drug prices in America compared with other developed countries. Trump used the example of Ozempic costing $88 a month in the U.K., while it is $1,200 a month in America. Trump’s rough prices are entirely accurate and represents what he said was roughly ten times more in America. Trump said the U.S. has been too nice on the issue. In a recent blog, I predicted that the populist Trump would come around on the issue of drug pricing

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If VBID Is To Go, Ensure Flexibilities Remain For Plans

VBID should stay until CMS truly assesses what may be lost The Centers for Medicare and Medicaid Services (CMS) announced in December that it was sunsetting the Value Based Insurance Design (VBID) within the Medicare Advantage (MA) program as of the end of CY 2025. The move took many plans by surprise as it comes just 20 months after CMS said it was extending VBID until 2030. Sixty-two insurers covering more than 7 million beneficiaries are participating in VBID in 2025. These include big, medium, and small plans. CMS says it is sunsetting the program for a few reasons: I have often said that CMS has far too many reform pilots in the Medicare space, that they have not shown savings, and they are administratively expensive. I have called for the termination of most of them and the creation of a small subset of pilots with uniform rules to ensure administrative

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February 7, 2025

As DOGE Works, Evidence Of FWA Emerges Even as Democrats excoriate Elon Musk and the Department of Government Efficiency (DOGE) commission for its far-reach and tactics, more word is coming out about the depth of improper payments made through Medicare and Medicaid. While the estimate is down since the COVID pandemic, a new report says there was $88.5 billion in improper payments in 2024, more than 5% of outlays last year. A Centers for Medicare and Medicaid Services (CMS) fact sheet says improper payments from federal programs can include payment errors or fraudulent payments but most often involve insufficient or missing documentation in reporting by states, providers, or contractors. My view: fraud, waste, and abuse (FWA) is much higher. Latest estimates suggest FWA is more like 25% of all healthcare costs, up from a traditional 10% norm used before.  That would mean FWA accounts for over $1 trillion in the entire

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February 6, 2025

Molina Reports Mixed Financial News Medicaid-dominant insurer Molina Healthcare had its net income grow 8.1% to $1.2 billion in 2024 as revenue spiked 19.3% to $40.7 billion. For the fourth quarter, net income rose 16.2% to $251 million as revenue increased 16% to $10.5 billion. But like other insurers, Molina struggled with medical expenses and had an 89.1% medical loss ratio (MLR) in 2024, one percentage point higher than in 2023. Membership expanded by 10.8%. Molina expects Medicaid spending to increase by 4.5% in 2025, but thinks cost pressures will ease. Molina sees growth and financial success in 2026 and beyond with new state Medicaid awards and success on bidding in existing states. Molina Healthcare CEO Joe Zubretsky downplayed attempts by Republicans to gut or limit Medicaid in upcoming reconciliation bills. He thinks any cuts will be marginal. See my blog this week on the topic: https://www.healthcarelabyrinth.com/will-medicaid-and-the-affordable-care-act-see-huge-cuts/ . Additional articles: https://www.healthcaredive.com/news/molina-earnings-q4-2024-medicaid/739391/ and https://www.fiercehealthcare.com/payers/medicaid-cuts-washington-will-be-marginal-says-molina-healthcare-ceo (Some

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Democrats’ IRA Part D Cost-Sharing Fiasco

Part D changes will raise premiums and destabilize the program I have been all over this even before it was fashionable. After reading up on some analyses of the Part D cost-sharing changes in the Inflation Reduction Act (IRA), I declared that seniors and those with disabilities would see an October surprise in the form of increased costs going into the election as they chose 2025 Medicare Advantage (MA) or Part D benefits. The Centers for Medicare and Medicaid Services (CMS) initially scoffed at my and others’ predictions, arguing the IRA anticipated this with a premium stabilization program. The problem: it applied just to the base benefit. We know that seniors have come to rely on enhanced Part D drug benefits from MA and standalone Part D (PDP) plans. And since the out-of-pocket (OOP) changes raised plan costs for both the base and enhanced benefits, recipients would have seen major

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February 5, 2025

Elon Musk Targeting CMS and Medicare Elon Musk and his Department of Government Efficiency (DOGE) commission is now targeting the Centers for Medicare & Medicaid Services (CMS) as part of efforts to reduce spending and waste. In particular, Musk is targeting Medicare for fraud, waste, and abuse (FWA). The DOGE representatives have gained access to payment and contracting systems. In other news, the hospital lobby is petitioning President Donald Trump to grant carveouts for medical devices and pharmaceutical products for tariffs. China is a large exporter of such products. As well, Democratic lawmakers are asking the Trump administration why some federal financial assistance recipients still aren’t receiving funds after two judges froze the spending freeze. Additional article: https://www.modernhealthcare.com/politics-policy/elon-musk-doge-fraud-medicare-medicaid and https://www.beckershospitalreview.com/legal-regulatory-issues/doge-probes-cms-for-medicare-medicaid-fraud-wsj.html and https://www.fiercehealthcare.com/providers/hospitals-ask-trump-exempt-medical-pharma-products-tariffs and https://www.fiercehealthcare.com/regulatory/trump-admin-orders-temporary-pause-most-federal-financial-assistance (Some articles may require a subscription.) #doge #fwa #cms #medicare #spending #tariffs #healthcare https://www.fiercehealthcare.com/regulatory/labor-unions-sue-trump-admin-over-treasury-takeover-citing-privacy-concerns Coalition Asks Trump To Revive PBM Reform A broad coalition of healthcare

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February 4, 2025

Party-Line Vote Advances Kennedy To Senate Floor Robert F. Kennedy, Jr. turned the vote of Sen. Bill Cassidy and gained a 14-13 Senate Finance confirmation vote, which means he has survived and will likely gain Senate confirmation. Cassidy gained concessions from the Trump administration in return for supporting Kennedy’s nomination. Whether you agree with Cassidy’s decision or not, the articles show that Cassidy spent a great deal of time gaining procedural and other commitments in return for supporting Kennedy. The concessions empower the Senate healthcare policy committees in a major way. He deserves a great deal of credit here for taking his role to advice and consent seriously. Vice President JD Vance also played a major role in working with Kennedy and Cassidy. Additional articles: https://www.modernhealthcare.com/politics-policy/rfk-jr-nomination-advanced-senate-finance-committee and https://www.medpagetoday.com/publichealthpolicy/washington-watch/114079 and https://thehill.com/homenews/senate/5125761-cassidy-says-he-secured-key-vaccine-commitments-from-rfk-jr/ and https://www.healthcaredive.com/news/rfk-jr-clears-key-hurdle-on-path-to-hhs-secretary/739096/ and https://insidehealthpolicy.com/health-insider/rfk-jr-confirmation-sent-floor-cassidy-onboard-budget-resolution-stalled (Some articles may require a subscription.) #trump #rfkjr #hhs #congress #healthcare https://www.fiercehealthcare.com/regulatory/top-republican-airs-concerns-about-rfks-bully-pulpit-and-vaccine-hesitancy Trump Sets A Deregulation

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February 3, 2025

Trump Wants To Preserve Medicaid By “Loving And Cherishing It” On Friday, President Donald Trump promised to “love and cherish” Social Security, Medicare, and Medicaid. Notice Medicaid made it to the earlier list of protected programs. Trump continued: “We’re not going to do anything with that unless we can find some abuse or waste. The people won’t be affected. It will only be more effective and better.” A sea change for Trump? Perhaps. But let’s not get too hopeful from one press statement. See my blog today on some interesting developments on the healthcare front. Trends suggest healthcare cuts may not be as deep as once suspected during the budget reconciliation process: https://www.healthcarelabyrinth.com/will-medicaid-and-the-affordable-care-act-see-huge-cuts/ #medicaid #aca #obamacare #exchanges #trump #congress #budgetreconciliation https://www.politico.com/live-updates/2025/01/31/congress/trump-love-and-cherish-medicaid-00201893 Medicare Advantage Risk Adjustment Reform While I disagree with some of the overpayment numbers quoted in this Health Affairs Forefront blog, I find interesting the authors’ position on tackling

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Will Medicaid and the Affordable Care Act See Huge Cuts?

While cuts will occur, things could be looking a bit better for Medicaid and the Exchanges In a series of blogs just before and after Donald Trump retook office, I speculated that, while there would be spending reductions impacting healthcare, I did not foresee a massive revamp in healthcare programs, specifically for the Affordable Care Act (ACA) and Medicaid. Now that we are about two weeks into the new administration and a fully GOP-controlled Congress, I felt it might be good to update readers on this all-important issue. As you know, I am a pro-coverage Republican. I think reasonably robust coverage is important for the health of our nation and to reduce costs in the future. So, based on some happenings in the past month or so, here are some of the reasons to think healthcare may not be impacted as much as one would think as the budget reconciliation

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