A busy year in healthcare with insurer woes, a new president, and a decidedly different healthcare policy approach.
As is my tradition at year’s end, I reflect back on all that occurred in healthcare in the year. It was a big year in healthcare and the new administration portends another massive one next year. I will have my 2026 healthcare predictions blog later this week.
So, here are the major healthcare happenings from 2025. You can go to various blogs at the blog tab of this website to learn more.
Presidential transition
The year began with a presidential transition, with Joe Biden exiting the White House and Donald Trump returning after four years in the political wilderness. Trump has taken a decidedly different approach to healthcare coverage, but at the same time has shocked some with efforts to reduce drug pricing and coercing definitive concessions from Big Pharma.
Trump convinced Republicans to give him several controversial healthcare appointments, including Robert K. Kennedy Jr. to lead all of healthcare and Dr. Mehmet Oz to lead Medicare, Medicaid, and the Exchanges. The Department of Government Efficiency (DOGE) started with a bang (Elon Musk with a chainsaw in hand) but ended with a whimper (Trump and Musk had a high-profile breakup). But DOGE led to reductions at healthcare agencies, including staff as well as important science and healthcare research grants.
The One Big Beautiful Bill Act (OBBBA)
It took about half a year for the Republicans to pass their hallmark tax commitment known as the One Big Beautiful Bill. The bill was centered on extending previous tax cuts as well as adding to them. The final bill increases outyear deficits by $4.1 trillion including interest over ten years. The GOP focused spending reductions on Medicaid and the Exchanges to the tune of about $1.1 trillion in cuts over ten years. These came in the form of Medicaid work requirements, limits and a phasedown of revenue-raising Medicaid provider taxes, limiting Medicaid state-directed provider payments, and major enrollment reductions and restrictions in both Medicaid and the Exchanges. The bill could mean about 15 million lose coverage.
Government shutdown
The government shut down for a record 43 days principally because Democrats held out for an extension of the enhanced premium subsidies in the Exchanges. These were passed during the COVID pandemic and will sunset as of December 31. No deal was reached on an extension, although discussions continue between moderates on both sides of the aisle in both the House and Senate.
Drug price reform and tariffs
President Trump came out swinging early on drug price reform. On Super Bowl Sunday he articulated his frustration with high drug prices compared with other nations. He followed this with several executive orders to remake and make transparent the drug supply channel as well as institute most-favored nation (MFN) pricing. As well, he announced his intention to place major tariffs on brand drugs due to price inequities and to encourage domestic manufacturing and investment.
Since then, Trump has gained price concessions from over a dozen brand drug makers, which will give Medicaid MFN pricing, massively reduce self-pay pricing, and theoretically mean MFN for all new drugs.
He proposed a rule that would bring MFN to Medicare and announced a Part B and Part D model to begin the process.
As part of his efforts, the president announced his intention to expand access to GLP-1 weight-loss drugs, including expanding access to obesity alone and reducing co-pays in Medicare to $50 per month.
In another development, after the administration demanded pharmacy benefits managers (PBMs) end brand drug rebates in drug pricing, one of the big 3 PBMs, Cigna’s Express Scripts, announced it would slowly begin eliminating rebates and migrating to a net price strategy.
Insurer meltdown
The financial meltdown of insurers continued and intensified in 2025. CVS Health and Humana had signs of financial chaos in 2024 and spent the year retooling. Molina and Centene also reported woes. Normally shatter-proof UnitedHealth Group, the largest integrated healthcare company, announced major financial problems. Some accused it of misleading investors as to the extent of its woes. Its president resigned and a previous CEO took charge. Only Cigna seemingly escaped the financial crisis.
The industry seems to be doing better and meeting investor expectations as it digs out of a financial abyss. But huge inflation (running at 6% to 9% annually for the past few years in the employer world as well as 10% now in Medicare) as well as Medicaid and Exchange cutbacks will mean a rocky recovery in 2026 and beyond.
Insurers caved to Trump administration demands to significantly rein in the use of prior authorization (PA). Big plans and regional insurers announced multi-year voluntary PA-limitation efforts to avoid further government regulation.
Vertical integration gained scrutiny on Capitol Hill.
Medicare Advantage (MA)
Medicare Advantage profitability plummeted and insurers continued to retrench by reducing benefits, products, and footprints. Notwithstanding all this, MA enrollment continued to grow, if at a slower pace. The retrenchment continued for 2026 products, and some have predicted a contraction in MA enrollment. But growth held up even in late 2025.
Other major trends in MA:
- At his confirmation hearings, Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz committed to major PA changes as well as to solve the risk adjustment (RA) issue.
- Oz announced a major risk adjustment data validation (RADV) initiative to recover overpayments from plans. However, a federal court struck down the base rule that governs such audits.
- At the end of the year, the administration proposed major Star Rating program changes, including eliminating about a dozen measures to make achievement tougher as well as to stop the Excellent Health Outcomes for All (EHO4all) health equity reward going into effect in Star Year 2027. Star ratings have dropped three years in a row (2023, 2024 and 2025) and barely stabilized in 2026, taking billions out of the funding stream as well. Average Star scores sit at a near 10-year low.
- After major rate cuts in 2024 and 2025, an over 5% rate hike was announced for 2026. A healthy increase but still concerning given major cost hikes ongoing in MA.
- While plans realigned in MA overall, major investments were made in Special Needs Plan (SNP) products and enrollment. In 2026, SNP products grew from one quarter of all plans to about a third. SNP enrollment growth is about 57% of all MA growth from February to December. Since October 2024 (when the 2025 enrollment season began), SNPs have grown by about 752K.
Healthcare coverage innovations emerge.
A PwC report predicted that over $1 trillion will be spent annually in ten years on a digital transformation in healthcare and the advent of personalized healthcare. The year saw primary care concierge healthcare and digital technology grow. The OBBBA allowed Health Savings Accounts (HSAs) to cover Direct Primary Care. Healthcare reimbursement ICHRAs expanded, allowing employers to pay for employees’ individual and family coverage on the Exchanges. Bronze and catastrophic plans now are deemed high-deductible health plans to allow HSA pairing. CMS also announced a number of new tech-based models to improve disease state monitoring, lower costs, and improve outcomes.
Acronyms galore
There was a cornucopia of healthcare acronyms, models, and pilots introduced 2025. We have talked about some of the following in the Healthcare Labyrinth Newsfeed, Blog and Podcast this year – DOGE, MAHA, EHO4all, TEAM, OBBBA, IOTA, WISeR, AHEAD, GENEROUS, GLOBE, GUARD, ACCESS, TEMPO, ELEVATE, LEAD, GUIDE, BALANCE, and more. I will have a blog soon explaining some of these.
Happy New Year!
#healthcare #coverage #healthcarereform #healthinsurance
— Marc S. Ryan
