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UnitedHealth Group Reports Lower Margins While revenue was up for the year, UnitedHealth Group reported lower annual margins due to high medical expense. Its stock dropped on the news. United is the largest insurer and biggest integrated healthcare company in the nation. Its medical loss ratio (MLR) grew to 87.6% across its lines of business in Q4. Its earnings were still above estimates. United CEO Andew Witty also said he would ease prior authorizations (PAs) and work with policymakers to overhaul processes. And faced with threats of major regulation of its pharmacy benefits manager (PBM), OptumRx, the CEO also committed to passing through to plans and employer groups 100% of drug manufacturer rebates. Many will be skeptical of the significance of this gesture given PBMs receive many forms of revenue and could easily find ways to maintain current levels of profit streams. Additional articles: https://www.modernhealthcare.com/insurance/unitedhealth-andrew-witty-prior-authorization and https://www.modernhealthcare.com/insurance/unitedhealth-group-earnings-call-share-price-andrew-witty-medical-costs-revenue and https://www.healthcaredive.com/news/unitedhealth-unh-2024-record-revenue/737477/ (Some

Overall Record Enrollment in ACA Programs As discussions are opening up in 2025 on whether enhanced premium subsidies are extended or not, the Kaiser Family Foundation (KFF) released a new analysis that said in 2024 Affordable Care Act (ACA) enrollment was 44 million. This includes federal and state Exchange Marketplaces, Medicaid expansions (ten states have not expanded), and the Basic Health Plan (in a small number of states). In 2024, Exchange Marketplace enrollment hit a record of 21.4 million people. Medicaid expansion enrollment was 21.3 million in 2024. Basic Health Plan enrollment in 2024 was 1.3 million. Exchange enrollment in 2025 will hit at least 24 million, so those helped via the ACA will actually be about 47 million. These gains could be reduced over the next several years if the enhanced rebates expire at the end of 2025, if the Exchange benefits and subsidies are changed in other ways,

Outgoing Biden FTC Fires Another Shot At PBMs CVS Caremark, Express Scripts and OptumRx – the Big 3 pharmacy benefits managers (PBMs) — dramatically mark up specialty generic drugs to affiliated pharmacies, according to a new report from the Federal Trade Commission (FTC). This is the second of two scathing reports. The FTC analyzed 51 specialty generic drugs from 2017 to 2022 and found that the PBMs’ affiliated pharmacies acquired $7.3 billion in excess revenue when compared to the National Average Drug Acquisition Cost (NADAC), an estimate of what it costs a pharmacy to acquire a drug. Further, the report says the conclusion could be an underestimation. PBMs generally defended themselves by saying that the report is misleading because it is based on a subset of drugs, that clients not PBMs choose networks, and they bring many savings to the system. But the report does show that PBM-affiliated pharmacy dispensing

MA Pay Hike Inadequate; Physicians Upset Health plans stocks did well on the news that Medicare Advantage (MA) rate hikes would improve in 2026, but many are still calling the increase inadequate and hope the incoming Trump administration will offer more relief. Advocates for MA are saying individual plan offerings will still have to decrease in 2026 after a major contraction in 2025. See my blog today digesting the announcement: https://www.healthcarelabyrinth.com/calling-all-plans-advance-notice-released-for-2026-ma-and-part-d-rates-and-other-policies/ . In related news, physicians are very upset that health plans will see an increase while they will see a fifth year of reductions. Docs feel plans are getting preferential treatment. I see the docs’ point. In other news, the Centers for Medicare and Medicaid Services (CMS) want to continue a premium stabilization program for standalone Part D (PDP) plans. A spike in premiums would have occurred without the program. Republicans think the program could be extra-legal (as I

2026 MA Proposed Rate Announced The outgoing Biden administration has released its Advance Notice for 2026 rates and other policy changes. I quickly reviewed the 180-page Advance Notice, the CMS Fact Sheet, and CMS Press Release. Here are some highlights and Healthcare Labyrinth will have more information on rates and Star changes next week. My summary: The announcement is progress for MA plans and will be a bit of a relief for insurers and investors. But this still is a very skimpy increase given all the MA world is facing. It could mean a third year in MA benefit cuts. Details: — CMS says MA rates go up by 4.33%. But plans will take issue with including a risk score trend of 2.1% in the calculation. Plans will say they will get closer to a 2.23% because plans do not count the coding increase as a real revenue increase. They