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United Reports Financial News; Big Plans Tighten Belts Investors cheered news from UnitedHealth Group that its efforts to get back to margins are working. United raised its full-year guidance Tuesday when announcing its Q3 results. United reported that net earnings fell 59.4% to $2.54 billion and earnings from operations dropped 50.4% to $4.31 billion. Revenue grew 12.2% to $113.16 billion. But these figures beat Wall Street expectations. United’s strategy has been to massively retrench in both Medicare Advantage (MA) and standalone Part D (PDP). United expects all its government lines of business to contract – MA, PDP, Medicaid, and the Exchanges. It expects to shed 600,000 in MA and has expanded some markets in the Exchanges but exited less profitable ones. Utilization and medical expense continues to be a challenge as its medical loss ratio was just short of 90% across all business lines. However, revenues from services entity Optum

Cigna’s Express Scripts Is Eliminating Rebates Spurred on by demands from the Trump administration to reform, Cigna’s Express Scripts pharmacy benefits manager (PBM) is phasing out prescription drug rebates for brand drugs. Rebates are issued by brand drug makers and usually do not go to consumers at the point of sale, causing brand drugs to have a high cost at the pharmacy. The rebates are issued by Big Pharma to gain preferred placement on drug formularies. Cigna will eliminate rebates in many of its commercial health plans in 2027. The phaseout will expand to Express Scripts clients starting in 2028 as the default option. The PBM’s phaseout program could mean a major transformation of the PBM industry, moving billions of dollars to offset consumer costs at the expense of rebates to insurers and employers as well as some amounts retained by PBMs. The new model will save members an average

Bipartisan Support For 340B Reform Senators on both sides of the political aisle expressed support for reforming the 340B drug discount program at a Senate HELP committee hearing today. While some expressed urgency for reform, others said that more caution needs to occur with reform to ensure rural facilities are not hurt. While hospitals have defended their use of the discounts over the years, independent studies question whether discounts are used to benefit the needy and that pricing at 340B-eligible hospitals can be more than at those ineligible for the program. In addition, many say that non-profit hospitals get far more benefit in tax exemptions than given back to poor Americans and charity care. Senators championed transparency around how revenue is generated in the program and how it is spent as well as more audit dollars. As well, senators want hospitals’ and other facilities’ aggressive debt collection practices curbed and

Molina Reels From Medical Expense Molina Healthcare reported Q3 financials and cut its 2025 earnings guidance for the third time this year. It is citing high medical costs particularly in its Exchange line of business. Molina is not the first to report the Exchange medical trend concern. The impacts will only be worse in 2026 if Exchange credits expire, risk increases, and enrollment drops. While Molina revenues beat analyst expectations, the plan missed on earnings. Molina is a Medicaid- and Exchange- dominant health plan with some Medicare Advantage (MA) lives. Molina posted a very-high medical loss ratio (MLR) of 92.6% in the quarter, up from 89.2% at the same time last year. Exchange plans hit a 95.6% MLR, up from 73% same time last year. Medicaid margins were strong but pressured from continued utilization. MA sees high utilization as well. In other news, a mix of Exchange pullouts and some expansions (surprisingly).

Employer Family Coverage Hits $27,000 A Year Healthcare policy group KFF finds from its annual employer survey that family premiums for employer-sponsored health insurance reached an average of $26,993 this year. On average, workers contribute $6,850 annually to the cost of family coverage. Family premiums increased 6%, or $1,408, from last year. KFF says the cumulative increase in family premiums is 26% over the past five years. KFF finds that more workers are in HSA-Qualified Plans as average deductibles have reached $1,886 per year. Additional articles: https://thehill.com/policy/healthcare/5567473-health-insurance-costs-rise-2025/?tbref=hp and https://www.healthaffairs.org/content/forefront/annual-family-premiums-employer-coverage-rise-6-2025-nearing-27-000-workers-paying-6 and https://www.kff.org/health-costs/perspectives-from-employers-on-the-costs-and-issues-associated-with-covering-glp-1-agonists-for-weight-loss/ and https://www.kff.org/affordable-care-act/annual-family-premiums-for-employer-coverage-rise-6-in-2025-nearing-27000-with-workers-paying-6850-toward-premiums-out-of-their-paychecks/ and https://www.kff.org/health-costs/2025-employer-health-benefits-survey/ (Some articles may require a subscription.) #employercoverage #healthcare #coverage https://www.fiercehealthcare.com/payers/new-care-vs-health-insurance-average-family-job-based-coverage-hits-27k ICHRAs Catching Fire But Jury Still Out Three articles on the major interest by employers in so-called ICHRAs, which allow employers to subsidize individual purchases in the Exchanges via health reimbursement accounts. Centene, the nation’s biggest Exchange insurer, and Oscar Health are bullish. Uptake is

Elevance Reports Good News But Cautions On Medicaid Elevance Health reported relatively good financial news for Q3 but warned investors about challenges in the Medicaid market. Ongoing eligibility determinations as well as changes to state programs are increasing the acuity of its membership. The company said its Medicaid margins will drop 125 basis points year over year in 2026 due to the eligibility changes and high utilization. This is before widescale reductions take place under the One Big Beautiful Bill Act (OBBBA). Insurers have complained that state Medicaid rates have not recognized actual costs after post-pandemic policy shifts in enrollment. The other major moving part is the expiration of the enhanced Exchange subsidies, which could leave a sicker cohort and increased risk and costs in that line as well. Elevance also trimmed its Medicare Advantage (MA) footprint to stabilize that line. Its Carelon services entity did not meet investor expectations.

11th Vote To Reopen Government Voted Down By Democrats Senate Democrats voted against reopening the federal government for the 11th time Monday, making the government shutdown continue. The chamber voted 50-43 on the House-passed continuing resolution, which needed 60 votes to pass. The same three Democratic caucusing senators voted with Republicans and one debt-and-deficit-hawk Republican voting with Democrats. At the same time, Senate Majority Leader John Thune, R-SD, said the government shutdown has dragged on for so long that the GOP-controlled House may need to come back to Washington to pass a new stopgap funding bill. There are just 4 weeks left on the measure passed by the House and failing in the Senate. And Rep. Chip Roy, R-TX, floated the use of the “nuclear option” to end the shutdown and get around Senate filibuster rules that require a 60-vote majority to pass a bill. Thune opposes the idea. Thune is