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Medicare Advantage Deductibles Surged in 2025 A survey by online broker eHealth finds that the average deductible for a Medicare Advantage (MA) plan in 2025 more than doubled to $315. The average deductible for MA plans during the enrollment period was $315, compared to $132 in 2024, or an increase of 139%. Premiums decreased from $9 per month to $5 per month, but MA plans clearly had to save by increasing deductibles and cost-sharing as well as reducing benefits and footprints. In other news, Becker’s also reports on the fastest-growing non-profit Blue Cross and Blue Shield plans in terms of MA enrollment. Chartis says Blue Cross Blue Shield non-profit plans accounted for around 30% of MA enrollment growth in 2025. That number does not include for-profit Elevance Health, one of the big national plans which is also a Blues licensee. Big BCBS plan gainers were BCBSMI, Highmark, and Horizon. Chartis also

Hard-Hitting Study Could Drive Medicaid Budget Cuts A study by the Paragon Health Institute and the Economic Policy Innovation Center could help drive certain cuts adopted by Republicans during the budget reconciliation process. The study focuses in on California and various ways the authors say the Golden State effectively exploits matching rules and launders money to fund its state share at the expense of the federal Medicaid budget. It also indicates that the schemes provide dollars to cover undocumented immigrants, even though federal law bars enrollment in Medicaid. The GOP in Congress is known to want to stay away from explicit coverage reductions in Medicaid. But it is looking at reining in the amount states are demanding in match as well as eliminating or at least reducing the use of provider taxes for state match. Study: https://paragoninstitute.org/wp-content/uploads/2025/03/California-Money-Laundering-Scheme_FOR-RELEASE_V3.pdf #medicaid #healthcare #coverage #budgetreconciliation https://thefederalist.com/2025/03/24/red-states-are-paying-for-californias-illegal-aliens-health-care GLP-1 Spending Outpaces Specialty Drugs Spending on GLP-1

Trump Aligned Think Tank Wants Drug Price Reductions America First Policy Institute (AFPI), a conservative think tank friendly with Donald Trump, says the administration should bring back Trump 45’s international reference pricing policy for drugs across federal health programs and in the commercial market. So far, the Trump administration has firmly backed the Medicare drug price law. The think tank says there are many ways the pricing could be implemented, including via the drug law. The push for commercial application is watershed. AFPI also recommends the Trump administration restrict drug makers’ ability to charge lower prices internationally than in America and use its trade negotiation power to press countries to stop using so-called “freeloading” policies. (Article may require a subscription.) #drugpricing #trump #ira #branddrugmakers https://insidehealthpolicy.com/inside-drug-pricing-daily-news/trump-aligned-think-tank-calls-admin-bring-back-mfn-policy Surprise Nomination For CDC Director In a surprise, Donald Trump announced that he will nominate Susan Monarez to lead the Centers for Disease Control and

Former Rep. Burgess Leading Contender For CDC Chief Former Representative Michael Burgess, M.D., R-TX, is a top choice for Centers for Disease Control and Prevention (CDC) director. Former Rep. Dave Weldon’s nomination was pulled over vaccine skepticism. Burgess, 74, practiced obstetrics and gynecology before going to Congress in 2003. He chose not to seek re-election in 2024. He is known as a major health policy wonk, supported COVID vaccination, and was an advocate for providers. At the same time, he is a conservative and not in favor of major expansion of government programs. He led the House’s Energy and Commerce Subcommittee on Health. He also headed the GOP Doctor’s Caucus. Another name that has been floated is Florida Surgeon General Joseph Ladapo, M.D., who is an ardent vaccine skeptic and would be extremely controversial. #cdc #trump #congress #nominations  https://www.fiercehealthcare.com/regulatory/former-rep-michael-burgess-md-likely-next-cdc-director-nomination-report First 60 Days Of Trump 47 Healthcare Modern Healthcare has a

OptumRx Rolls Out Transparent Reimbursement OptumRx says it is rolling out a new cost-based reimbursement model for pharmacies. It says it expects the change to be a positive one for the more than 24,000 independent and community pharmacies as well as members. Optum said it will begin to roll out the updated models now and intends to have a full implementation in place by January 2028.  The model will reimburse pharmacies more for dispensing brand-name medicines to address longstanding complaints that expensive prescriptions are losing money for drugstores. The model recognizes that with the penetration of generics, some work must be done to deal with the brand reimbursement problem. This will help stocking of brand drugs. Pharmacists are skeptical and feel this is an effort to forestall passage of pharmacy benefits manager (PBM) reform. Additional articles: https://www.modernhealthcare.com/insurance/unitedhealth-optumrx-brand-name-drugs and https://insidehealthpolicy.com/inside-drug-pricing-daily-news/new-optum-rx-pharmacy-pay-model-met-skepticism (Some articles may require a subscription.) #drugpricing #pbms https://www.fiercehealthcare.com/payers/optum-rx-overhaul-pharmacy-reimbursement-models C-SNPs Growth

Cigna Closes $3.3 Billion Deal To Sell MA Business Cigna officially closed its $3.3 billion sale of its Medicare line of business to Health Care Service Corporation (HCSC). The deal includes Medicare Advantage (MA) lives, Medicare Part D lives, its Medicare supplement business, and its CareAllies physician ownership. HCSC jumps to 950,000 members from about 240,000 members. Cigna actually grew MA from about 600,000 to 700,000 in the past year. Cigna CEO David Cordani was known to be frustrated with the lack of profitability in the MA line and wants to focus on services entity Evernorth and the commercial insurance line. In other news, United’s Optum Rx pharmacy benefits manager (PBM) said it would eliminate up to 25% of reauthorizations, initially focusing on 80 drugs. This amounts to 10% of overall prior authorizations. Additional articles: https://www.fiercehealthcare.com/payers/cigna-closes-33b-sale-medicare-plans-hcsc and https://www.beckerspayer.com/m-and-a/cigna-hcsc-close-3-3b-medicare-advantage-sale/ and https://www.fiercehealthcare.com/payers/optum-rx-reduce-reauthorizations-80-drugs and https://www.modernhealthcare.com/insurance/optumrx-drug-prior-authorization and https://www.healthcaredive.com/news/optum-rx-eliminate-prior-authorizations/742910/ and https://www.beckerspayer.com/payer/optum-rx-to-eliminate-prior-authorization-for-80-drugs/ (Some articles may require

Trump Administration Sides With Hospitals Over Drug Makers in 340B Lawsuit The Department of Health and Human Services (HHS) has filed for summary judgment in its favor regarding lawsuits on the 340B program, siding with hospitals over drug makers. This is consistent with the Biden administration. While I am not a fan of brand drug makers, it is clear that hospitals and some other providers are abusing the intent of the program. Trump is on the wrong side of this policy issue. #340b #drugpricing #branddrugmakers https://www.fiercehealthcare.com/ai-and-machine-learning/rfk-jrs-hhs-picks-biden-admins-legal-fight-against-340b-rebates Rising Hospital Margins Hospitals across the nation logged a monthly median operating margin of 4.4%, up from 3.7% in December and 2.1% reported for all of 2024. #hospitals #margins https://www.fiercehealthcare.com/providers/hospitals-kick-2025-modest-operating-margin-gains-high-inpatient-revenue MedPAC Wants Medicare Provider Rate Hikes MedPAC, the congressional policy arm, has recommended tying the rate of physician and other health professionals’ payment increases in 2026 to the Medicare Economic Index minus 1 percentage

Major Medicare Advantage Advocacy Group Launches Ad Campaign Better Medical Alliance (BMA), a prominent Medicare Advantage (MA) advocacy group, has launched a seven-figure digital ad campaign in an effort to avoid MA cuts and boost the proposed 2026 rate increase. Not counting risk score trends, MA rates saw a decline in 2024 and 2025. The Biden administration proposed just a 2.3% hike for 2026. This would lead to a third year of benefit cutbacks and geographic footprint reductions. The reductions have been caused by a new risk model that takes about 7% out of rates overall (it is being phased in over three years through 2026) as well as reductions in medical education funding. BMA notes that both Milliman and PwC estimated medical cost trends in MA increased by 8% from 2023 to 2024. The trend continues into 2025 with the return of utilization. Plans are also facing higher costs

Oz Dodges Medicaid Cuts But Signals Openness On MA Reductions Dr. Mehmet Oz, nominee to be administrator of the Centers for Medicare and Medicaid Services (CMS), seems well placed to be confirmed. In a hearing, he dodged most questions on Medicaid cuts but signaled that he might favor reductions to Medicare Advantage (MA) overpayments. I have been saying this for some time now. Oz said he is in favor of work requirements for Medicaid and removing undocumented individuals. He did not defend the Affordable Care Act (ACA) enhanced premium tax credits set to expire in 2025. Oz appeared to agree with Sen. Elizabeth Warren, D-MA, and others at several points in the hearing that the MA program needs better reform and oversight, especially on payments. Even Sen. HELP Chairman Bill Cassidy, R-LA, appeared to agree and also raised denial of care by plans, on which Oz concurred. Oz also said

MedPAC Repeats Dubious Overpayment Number In Report MedPAC, the congressional policy arm for Medicare, again has published a dubious overpayment number in a report to Congress. It says the federal government will spend $84 billion more in 2025 on Medicare Advantage (MA) enrollees than if they were enrolled in the traditional fee-for-service (FFS) program. This is about 20% more. This is slightly lower than MedPAC reported in 2024.  MedPAC says two factors accounting for the majority of overpayments to MA plans are risk score coding intensity and favorable selection. It says risk scores for MA enrollees will be around 16% higher in MA vs. FFS, which accounts for $40 billion. It says that $44 billion is favorable selection. Many MA proponents and I do not buy the favorable selection number or all of the risk score coding number. But I have admitted that some plans take advantage of risk adjustment and