Category Archives: High Prices

ACA premiums set to spike 

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, ACA, ACA Premiums, Deferred Healthcare, Health Insurance Coverage Adequacy, Health Policy, Healthcare Reform, High Premiums, High Prices, Medicaid, Uncompensated Care, Underinsured, Uninsured • Tagged , , , , • Leave a comment

https://nxslink.thehill.com/view/6230d94bc22ca34bdd8447c8ofavw.mnb/3a085f61

People who buy health insurance through the Affordable Care Act (ACA) are set to see a median premium increase of 18 percent, more than double last year’s 7 percent median proposed increase, according to an analysis of preliminary filings by KFF. 

The proposed rates are preliminary and could change before being finalized in late summer. The analysis includes proposed rate changes from 312 insurers in all 50 states and DC. 

It’s the largest rate change insurers have requested since 2018, the last time that policy uncertainty contributed to sharp premium increases. On average, ACA marketplace insurers are raising premiums by about 20 percent in 2026, KFF found. 

Insurers said they wanted higher premiums to cover rising health care costs, like hospitalizations and physician care, as well as prescription drug costs. Tariffs on imported goods could play a role in rising medical costs, but insurers said there was a lot of uncertainty around implementation, and not many insurers were citing tariffs as a reason for higher rates. 

But they are adding in higher increases due to changes being made by the Trump administration and Republicans in Congress. For instance, the majority of insurers said they are taking into account the potential expiration of enhanced premium tax credits. 

Those subsidies, put in place during the COVID-19 pandemic, are set to expire at the end of the year, and there are few signs that Republicans are interested in tackling the issue at all.    

If Congress takes no action, premiums for subsidized enrollees are projected to increase by over 75 percent starting in January 2026, according to KFF. 

But some states are pushing back.  

Arkansas Gov. Sarah Huckabee Sanders (R) on Wednesday called on the state’s insurance commissioner to disapprove the proposed increases from Centene and Blue Cross Blue Shield. The companies filed increases of up to 54 percent and 25.5 percent, respectively, she said.  

“Arkansas’ Insurance Commissioner is required to disapprove of proposed rate increases if they are excessive or discriminatory, and these are both,” Huckabee Sanders said in a statement.

“I’m calling on my Commissioner to follow the law, reject these insane rate increases, and protect Arkansans.”  

As Americans Struggled, Health Insurers Made a Record-Breaking $71.3 Billion in Profits

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Health Insurance Industry, Health Policy, Healthcare Reform, High Premiums, High Prices, Monopoly, Monopoly Behavior, Profit, Profit Margin, Profit Model, Profit Motive • Tagged , , , , • Leave a comment
https://healthcareuncovered.substack.com/p/as-americans-struggled-health-insurers?utm_source=post-email-title&publication_id=255152&post_id=170288533&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

Ahead of my Congressional testimony last week before the Senate HELP committee, I compiled data on the profits, revenues and CEO compensations of big health insurers in 2024. The curiosity from senators on both sides of the aisle signaled, to me, that lawmakers are as interested as I’ve ever seen in the industry’s rampant profiteering.

What I found was that the seven biggest publicly traded health insurance companies collectively made $71.3 billion in profits, up more than half a billion dollars from 2023. All while millions of Americans continued to skip their medications, rationed insulin and delayed care due to insurers’ out-of-pocket demands.

Let’s break it down.

You won’t be surprised to learn that shareholders are not the only ones benefiting from the care-restricting barriers insurers have erected to boost profits. The CEOs of those seven companies took home a combined $146.1 million in 2024 compensation. That’s enough to cover annual premiums for thousands of American families.

Here’s what the top brass made:

Meanwhile, patients across the country report increasing out-of-pocket costs, more aggressive prior authorizations and narrower provider networks. But for these executives, the real measure of success is how high they can push their stock prices and not how many people can afford to see a doctor.

So, What’s Driving the Revenue Surge?

One word: Gouging.

Insurers continued to jack up premiums for their commercial customers and overcharge the government. Despite watchdog warnings, Uncle Sam continues to pour money into private Medicare Advantage plans even as audits and investigations uncover widespread fraud and upcoding. And Medicaid managed care is a gold mine, too. These insurers now dominate state Medicaid contracts and can quietly extract billions through behind-the-scenes ownership of pharmacies, PBMs and providers.

It’s not just health insurance anymore — it’s a monopolized empire.

All that said, to the dismay of shareholders, the big seven insurers have had to admit that so far in 2025, they’ve paid more medical claims than they had expected, which means their profits were down somewhat during the first months of the year. I’ll shed more light on that in a future post. No need for you to shed any tears for them, though, because we’re still talking billions and billions in profits.

So if you’re wondering why your premiums, deductibles and costs at the pharmacy counter keep going up — just look at those 2024 numbers. We all paid more for health insurance and got less for the hard-earned money we had to shovel out for our “coverage.” 

And expect even more financial pain (and difficulty getting the care you need) as these companies do all they can to get their profit margins back to where Wall Street wants them.

Tariffs drive health plan premium hikes

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Insurance Premiums, High Cost Therapies, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Out of Pocket Expenses, Underinsured, Uninsured • Leave a comment

https://www.axios.com/2025/06/18/tariffs-health-insurance-premium-hikes

Health insurers are starting to notify states that tariffs will drive up the premiums they plan to charge individual and small group market enrollees next year.

Why it matters: 

The Trump administration’s trade policy is adding another layer of uncertainty for health costs as Congress considers Medicaid cuts and is expected to sunset enhanced subsidies for Affordable Care Act coverage.

  • “There are sort of a perfect storm of factors that are driving prices up,” said Sabrina Corlette, research professor at Georgetown’s Center on Health Insurance Reforms.

The big picture: 

Health insurers calculate monthly premiums in advance of each year based on the expected price of goods and services and projected demand for them.

  • Tariffs announced by President Trump are expected to drive up the cost of prescription drugs, medical devices and other medical products and services. Some of that difference ultimately would be passed down to enrollees.

Where it stands: 

A handful of health insurers administering individual and small group plans have already explicitly told state regulators that tariffs are forcing plans to raise enrollee premiums more than they otherwise would next year, KFF policy analyst Matt McGough wrote in an analysis published Monday.

  • Independent Health Benefits Corporation told New York regulators in a filing last month that it plans to raise premiums for its individual market enrollees 38.4% next year.
  • About 3% of that is directly due to tariffs, based on projections of how much they’ll increase drug prices and the use of imported drugs, Frank Sava, a spokesperson for Independent Health, told Axios.
  • Similarly, UnitedHealthcare of Oregon said in a filing that nearly 3% of its planned 19.8% premium increase for small group enrollees next year is due to uncertainty around tariffs, particularly on how they’ll affect pharmaceutical prices.

Insurers “don’t have any historical precedent or data to project what this is going to mean for their business and health costs,” McGough said to Axios. “I think it really makes sense that they’re trying to hedge their bets.”

  • Insurers can’t change their premiums throughout the year. But if health plans do overshoot their premium estimates in rate filings, they have to pay enrollees back the difference in rebates.
  • While there may be a competitive advantage to keeping premiums lower, there isn’t really a way for insurers to make up for extra unplanned costs after the fact.

Yes, but: 

Some insurers indicated that while they’re keeping a close eye on tariff-related impacts, they aren’t baking them into their premium rates yet.

  • “There is uncertainty around inflation and the economy due to possible tariffs however we did [not] put anything for this in this filing,” Kaiser Foundation Health Plan of the Northwest’s report to Oregon reads.
  • State regulators can also push back on insurers’ premium calculations before they’re finalized, McGough noted.

What we’re watching: 

While some states have earlier deadlines, insurers have to submit their 2026 ACA marketplace plan rates to the federal regulators by July 16, and proposed rates will be posted by August 1.

  • That’s when we’ll get a better picture of how seriously tariffs are concerning health insurers.

Cost to insure a family tops $35,000

Posted on by • Posted in Employee Raise, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Insurance Premiums, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Out of Pocket Expenses, Outpatient Care, Pharmaceutical Industry, Underinsured, Uninsured • Leave a comment
https://www.axios.com/newsletters/axios-markets-e4750590-4132-11f0-a0c6-ad012ea165ba.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business

The cost to cover a family of four through workplace insurance now exceeds $35,000, nearly triple what it cost 20 years ago as annual growth in health costs have far outpaced wages.

The big picture: 

Growing pharmacy and outpatient facility costs drove most of the increase, which includes employee and employer shares, according to the 2025 Milliman Medical Index.

  • Employers have been wary of passing health cost hikes to workers in a tight labor market, but the rising demand for costly care may force a reckoning.

State of play: 

The $35,119 annual cost to cover a hypothetical family of four this year factors in drug costs, inpatient and outpatient care, and professional services, along with an “other” category that includes home health, ambulance transport, medical equipment and prosthetics.

  • A year of health care cost a family of four $12,214 in 2005, the year Milliman launched the index. The 20-year cumulative gain of 188% outpaced the 84% growth in wages over the same time.
  • Health costs have increased about 6% per year on average over the past two decades, according to Milliman, compared with an average inflation rate of 2.5% over that time.

Between the lines: 

Employers in 2025 still shoulder 58% of employee health care costs, but their share has shrunk since 2005, when it was more than 60%.

Reality check: 

Health care costs vary significantly by age, geography and pharmacy rebate arrangements.

  • Milliman calculates family cost based on a family with a 47-year-old male, 37-year-old female, and children ages 4 and under 1.
  • This was a “mathematically average” family in 2005, and Milliman continues to use that formula to keep data comparable year-to-year.
  • The firm has an online tool that allows readers to input other family configurations to see their estimated 2025 health care costs.

The analysis is based on Milliman’s proprietary research tools and analyzes commercial claims data. The family cost figure reflects nationwide average negotiated provider fees and average PPO benefit levels.

Broken Promises: How Employer Health Plans Are Leaving Millions Underinsured and in Debt

Posted on by • Posted in Affordability, Health Insurance Coverage Adequacy, Health Insurance Denial, Health Insurance Industry, Health Policy, Healthcare Reform, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Out of Pocket Expenses, Out-of-Network, Profit, Profit Motive, State of the Union, Underinsured, Uninsured • Leave a comment
https://healthcareuncovered.substack.com/p/broken-promises-how-employer-health?utm_source=post-email-title&publication_id=255152&post_id=153032192&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

A few weeks ago The Commonwealth Fund, a philanthropic organization in New York City, which keeps tabs on health care trends, released an ominous study signaling that the bedrock of the U.S. health system is in trouble.

The study found that the employer insurance market, where millions of Americans have received good, affordable coverage since the end of World War II, could be in jeopardy. The continuing rise in the costs of medical care, and the insurance premiums to pay for it, may well cause employers to make cutbacks, leaving millions of workers uninsured or underinsured, often with no way to pay for their care and the prospect of debt for the rest of their lives. 

Indeed the Fund revealed that 23% of adults in the U.S. are underinsured, meaning that though they were covered by health insurance, high deductibles and coinsurance made it difficult or impossible to pay for the care they needed.

“They have health plans that don’t provide affordable access to care,” said Sara Collins, senior adviser and vice president at the Fund. “They have out-of-pocket costs and deductibles that are high relative to their income.”

This predicament has forced many to assume medical debt or skip needed care. The Fund found that as many as one-third of people with chronic conditions like heart failure and diabetes reported they don’t take their medication or fill prescriptions because they cost too much.

Others did not go to a doctor when they were sick, skipping a recommended follow-up visit or test, and did not see a specialist when one was recommended. Nearly half of the respondents reported they did not get care for an ongoing condition because of the cost. Two out of five working-age adults who reported a delay or skipped care told researchers their health problem had gotten worse. Those findings belie the narrative, deployed when changes to the system are discussed, that America has the best health care in the world, and we dare not change it.

The seeds of today’s underinsurance predicament were planted in the 1990s when the system’s players decided remedies were needed to curb Americans’ appetite for medical interventions. 

They devised managed care, with its HMOs, PPOs, insurance company approvals, and other restrictions that are with us today. But health care is far more expensive than it was in the ’90s, leaving patients to struggle to pay the higher prices, or, as the study shows, go without needed care. 

Perhaps one of the study’s most striking findings is that a vast majority of underinsured workers had employer insurance plans, which over the decades had provided good coverage. Researchers concluded that recent cost containment measures were simply shifting more costs to workers through higher deductibles and coinsurance.

I checked in with Richard Master, the CEO of MCS Industries in Easton, Pennsylvania. We’ve talked over the years about the rising cost of health insurance for his 91 workers who make picture frames and wall decorations. This year, he was expecting a 5 to 6% increase in insurance rates.

A family plan now costs more than $39,000, he said, adding that “29% of people with employee plans are underinsured and have high out-of-pocket costs.”

To help reduce his own costs, he told me he has put in place a high-deductible plan and was setting up health saving accounts that allow him to give a sum of money to each worker to use for their medical expenses.

As health insurance premiums continue to rise, more employers will likely heap more of those rising costs onto workers, many of whom will inevitably have a tough time paying for them.

Every time there has been a hint in the air that maybe, just maybe, America might embrace a universal system like peer nations across the globe that offer health care to all their citizens, the special interests—doctors, hospitals, insurers, employers, and others that benefit financially from the current system have snuffed out any possibility that might happen, worried that such a system could affect their profits.

For as long as I can remember, the public has been told America has the best health care system in the world. Major holes in our system exposed by The Commonwealth Fund belie that assumption.

The Presidential Debate will Frustrate Healthcare Voters

Posted on by • Posted in 2024 Election Issues, ACA, Antitrust, Competition, Health Insurance Industry, Health Policy, Healthcare Reform, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Market Consolidation, Market Power, Monopoly, Monopoly Behavior, Pharmaceutical Industry, State of the Union • Leave a comment
The Presidential Debate will Frustrate Healthcare Voters

Tomorrow night, the Presidential candidates square off in Philadelphia. Per polling from last week by the New York Times-Siena, NBC News-Wall Street Journal, Ipsos-ABC News and CBS News, the two head into the debate neck and neck in what is being called the “chaos election.”

Polls also show the economy, abortion and immigration are the issues of most concern to voters. And large majorities express dissatisfaction with the direction the country is heading and concern about their household finances.

The healthcare system per se is not a major concern to voters this year, but its affordability is. Out-of-pocket costs for prescription drugs, insurance premiums and co-pays and deductibles for hospitals and physician services are considered unreasonable and inexplicably high. They contribute to public anxiety about their financial security alongside housing and food costs. And majorities think the government should do more by imposing price controls and limiting corporate consolidation.

That’s where we are heading into this debate. And here’s what we know for sure about the 90-minute production as it relates to health issues and policies:

  • Each candidate will rail against healthcare prices, costs, and consolidation taking special aim at price gouging by drug companies and corporate monopolies that limit competition for consumers.
  • Each will promise protections for abortion services: Trump will defer to states to arbitrate those rights while Harris will assert federal protection is necessary.
  • Each will opine to the Affordable Care Act’s future: Trump will promise its repeal replacing it “with something better” and Harris will promise its protection and expansion.
  • Each will promise increased access to behavioral health services as memories of last week’s 26-minute shooting tirade at Apalachee High School fade and the circumstances of Colt Gray’s mental collapse are studied.
  • And each will promise adequate funding for their health priorities based on the effectiveness of their proposed economic plans for which specifics are unavailable.

That’s it in all likelihood. They’re unlikely to wade into root causes of declining life expectancy in the U.S. or the complicated supply-chain and workforce dynamics of the industry. And the moderators are unlikely to ask probative questions like these to discover the candidate’s forethought on matters of significant long-term gravity…

  • What are the most important features of health systems in the world that deliver better results at lower costs to their citizens that could be effectively implemented in the U.S. system?
  • How should the U.S. allocate its spending to improve the overall health and well-being of the entire population?
  • How should the system be funded?

My take:

I will be watching along with an audience likely to exceed 60 million. Invariably, I will be frustrated by well-rehearsed “gotcha” lines used by each candidate to spark reaction from the other. And I will hope for more attention to healthcare and likely be disappointed.

Misinformation, disinformation and AI derived social media messaging are standard fare in winner-take-all politics.

When used in addressing health issues and policies, they’re effective because the public’s basic level of understanding of the health system is embarrassingly low: studies show 4 in 5 American’s confess to confusion citing the system’s complexity and, regrettably, the inadequacy of efforts to mitigate their ignorance is widely acknowledged.

Thus, terms like affordability, value, quality, not-for-profit healthcare and many others can be used liberally by politicians, trade groups and journalists without fear of challenge since they’re defined differently by every user.

Given the significance of healthcare to the economy (17.6% of the GDP),

the total workforce (18.6 million of the 164 million) and individual consumers and households (41% have outstanding medical debt and all fear financial ruin from surprise medical bills or an expensive health issue), it’s incumbent that health policy for the long-term sustainability of the health system be developed before the system collapses. The impetus for that effort must come from trade groups and policymakers willing to invest in meaningful deliberation.

The dust from this election cycle will settle for healthcare later this year and in early 2025. States are certain to play a bigger role in policymaking: the likely partisan impasse in Congress coupled with uncertainty about federal agency authority due to SCOTUS; Chevron ruling will disable major policy changes and leave much in limbo for the near-term.

Long-term, the system will proceed incrementally. Bigger players will fare OK and others will fail. I remain hopeful thoughtful leaders will address the near and long-term future with equal energy and attention.

Regrettably, the tyranny of the urgent owns the U.S. health system’s attention these days: its long-term destination is out-of-sight, out-of-mind to most. And the complexity of its short-term issues lend to magnification of misinformation, disinformation and public ignorance.

That’s why this debate will frustrate healthcare voters.

PS: Congress returns this week to tackle the October 1 deadline for passing 12 FY2025 appropriations bills thus avoiding a shutdown. It’s election season, so a continuing resolution to fund the government into 2025 will pass at the last minute so politicians can play partisan brinksmanship and enjoy media coverage through September. In the same period, the Fed will announce its much anticipated interest rate cut decision on the heals of growing fear of an economic slowdown. It’s a serious time for healthcare!

Are Employers Ready to Move from the Back Bench in U.S. Healthcare?

Posted on by • Posted in Cost Management, Cost Transparency, Employee Benefits, Employer-Based Health Insurance, Employer-Sponsored Commercial Health Insurance, Employers, Health Insurance Self Funded, Healthcare Reform, High Drug Prices, High Premiums, High Prices, High Risk Employees, Medicaid, Medicare, Medicare Advantage, Out of Pocket Expenses • Leave a comment
Are Employers Ready to Move from the Back Bench in U.S. Healthcare?

This year, 316 million Americans (92.3% of the population) have health insurance: 61 million are covered by Medicare, 79 million by Medicaid/CHIP and 164 million through employment-based coverage. By 2032, the Congressional Budget Office predicts Medicare coverage will increase 18%, Medicaid and CHIP by 0% and employer-based coverage will increase 3.0% to 169 million. For some in the industry, that justifies seating Medicare on the front row for attention. And, for many, it justifies leaving employers on the back bench since the working age population use hospitals, physicians and prescription meds less than seniors.  

Last week, the Business Group on Health released its 2025 forecast for employer health costs based on responses from 125 primarily large employers surveyed in June: Highlights:

  • “Since 2022, the projected increase in health care trend, before plan design changes, rose from 6% in 2022, 7.2% in 2024 to almost 8% for 2025. Even after plan design changes, actual health care costs continued to grow at a rate exceeding pre-pandemic increases. These increases point toward a more than 50% increase in health care cost since 2017. Moreover, this health care inflation is expected to persist and, in light of the already high burden of medical costs on the plan and employees, employers are preparing to absorb much of the increase as they have done in recent years.”.
  • Per BGH, the estimated total cost of care per employee in 2024 is $18,639, up $1,438 from 2023. The estimated out-of-pocket cost for employees in 2024 is $1,825 (9.8%), compared to $1,831 (10.6%) in 2023.

The prior week, global benefits firm Aon released its 2025 assessment based on data from 950 employers:

  • “The average cost of employer-sponsored health care coverage in the U.S. is expected to increase 9.0% surpassing $16,000 per employee in 2025–higher than the 6.4% increase to health care budgets that employers experienced from 2023 to 2024 after cost savings strategies. “
  • On average, the total health-plan cost for employers increased 5.8% to $14,823 per employee from 2023 to 2024: employer costs increased 6.4% to 80.7% of total while employee premiums increased 3.4% increase–both higher than averages from the prior five years, when employer budgets grew an average of 4.4% per year and employees averaged 1.2% per year.
  • Employee contributions in 2024 were $4,858 for health care coverage, of which $2,867 is paid in the form of premiums from pay checks and $1,991 is paid through plan design features such as deductibles, co-pays and co-insurance.
  • The rate of health care cost increases varies by industry: technology and communications industry have the highest average employer cost increase at 7.4%, while the public sector has the highest average employee cost increase at 6.7%. The health care industry has the lowest average change in employee contributions, with no material change from 2023: +5.8%

And in July, PWC’s Health Research Institute released its forecast based on interviews with 20 health plan actuaries. Highlights:

  • “PwC’s Health Research Institute (HRI) is projecting an 8% year-on-year medical cost trend in 2025 for the Group market and 7.5% for the Individual market. This near-record trend is driven by inflationary pressure, prescription drug spending and behavioral health utilization. The same inflationary pressure the healthcare industry has felt since 2022 is expected to persist into 2025, as providers look for margin growth and work to recoup rising operating expenses through health plan contracts. The costs of GLP-1 drugs are on a rising trajectory that impacts overall medical costs. Innovation in prescription drugs for chronic conditions and increasing use of behavioral health services are reaching a tipping point that will likely drive further cost inflation.”

Despite different methodologies, all three analyses conclude that employer health costs next year will increase 8-9%– well-above the Congressional Budget Office’ 2025 projected inflation rate (2.2%), GDP growth (2.4% and wage growth (2.0%).  And it’s the largest one-year increase since 2017 coming at a delicate time for employers worried already about interest rates, workforce availability and the political landscape.

For employers, the playbook has been relatively straightforward: control health costs through benefits designs that drive smarter purchases and eliminate unnecessary services. Narrow networks, price transparency, on-site/near-site primary care, restrictive formularies, value-based design, risk-sharing contracts with insurers and more have become staples for employers. 

But this playbook is not working for employers: the intrinsic economics of supply-driven demand and its regulated protections mitigate otherwise effective ways to lower their costs while improving care for their employees and families.

My take:

Last week, I reviewed the healthcare advocacy platforms for the leading trade groups that represent employers in DC and statehouses to see what they’re saying about their take on the healthcare industry and how they’re leaning on employee health benefits. My review included the U.S. Chamber of Commerce, National Federal of Independent Businesses, Business Roundtable, National Alliance of Purchaser Coalitions, Purchaser Business Group on Health, American Benefits Council, Self-Insurance Institute of America and the National Association of Manufacturers.

What I found was amazing unanimity around 6 themes:

  • Providing health benefits to employees is important to employers. Protecting their tax exemptions, opposing government mandates, and advocating against disruptive regulations that constrain employer-employee relationships are key.
  • Healthcare affordability is an issue to employers and to their employees, All see increasing insurance premiums, benefits design changes, surprise bills, opaque pricing, and employee out-of-pocket cost obligations as problems.
  • All believe their members unwillingly subsidize the system paying 1.6-2.5 times more than what Medicare pays for the same services. They think the majority of profits made by drug companies, hospitals, physicians, device makers and insurers are the direct result of their overpayments and price gauging.
  • All think the system is wasteful, inefficient and self-serving. Profits in healthcare are protected by regulatory protections that disable competition and consumer choices.
  • All think fee-for-service incentives should be replaced by value-based purchasing.
  • And all are worried about the obesity epidemic (123 million Americans) and its costs-especially the high-priced drugs used in its treatment. It’s the near and present danger on every employer’s list of concerns.

This consensus among employers and their advocates is a force to be reckoned. It is not the same voice as health insurers: their complicity in the system’s issues of affordability and accountability is recognized by employers. Nor is it a voice of revolution: transformational changes employers seek are fixes to a private system involving incentives, price transparency, competition, consumerism and more.

Employers have been seated on healthcare’s back bench since the birth of the Medicare and Medicaid programs in 1965. Congress argues about Medicare and Medicaid funding and its use. Hospitals complain about Medicare underpayments while marking up what’s charged employers to make up the difference. Drug companies use a complicated scheme of patents, approvals and distribution schemes to price their products at will presuming employers will go along. Employers watched but from the back row.

As a new administration is seated in the White House next year regardless of the winner, what’s certain is healthcare will get more attention, and alongside the role played by employers. Inequities based on income, age and location in the current employer-sponsored system will be exposed. The epidemic of obesity and un-attended demand for mental health will be addressed early on. Concepts of competition, consumer choice, value and price transparency will be re-defined and refreshed. And employers will be on the front row to make sure they are.

For employers, it’s crunch time: managing through the pandemic presented unusual challenges but the biggest is ahead. Of the 18 benefits accounted as part of total compensation, employee health insurance coverage is one of the 3 most expensive (along with paid leave and Social Security) and is the fastest growing cost for employers.  Little wonder, employers are moving from the back bench to the front row.

Campaign 2024 and US Healthcare: 7 Things we Know for Sure

Posted on by • Posted in 2024 Election Issues, Abortion, Abortion Pill, Abortion Rights, ACA, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Health System, Healthcare Reform, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Hospital, Hospital Industry, Medicaid, Medicaid Eligibility, Medicaid Expansion, Medicaid Funding, Medical Debt, Medicare, Medicare Advantage, Roe v. Wade • Leave a comment
Campaign 2024 and US Healthcare: 7 Things we Know for Sure

Over the weekend, President Biden called it quits and Democrats seemingly coalesced around Vice President Harris as the Party’s candidate for the White House. While speculation about her running mate swirls, the stakes for healthcare just got higher. Here’s why:

A GOP View of U.S. Healthcare

Republicans were mute on their plans for healthcare during last week’s nominating convention in Milwaukee. The RNC healthcare platform boils down to two aims: ‘protecting Medicare’ and ‘granting states oversight of abortion services.  Promises to repeal and replace the Affordable Care Act, once the staple of GOP health policy, are long-gone as polls show the majority (even in Red states (like Texas and Florida) favor keeping it. The addition of Ohio Senator JD Vance to the ticket reinforces the party’s pro-capitalism, pro-competition, pro-states’ rights pitch.

To core Trump voters and right leaning Republicans, the healthcare industry is a juggernaut that’s over-regulated, wasteful and in need of discipline. Excesses in spending for illegal immigrant medical services ($8 billion in 2023), high priced drugs, lack of price transparency, increased out-of-pocket costs and insurer red tape stoke voter resentment. Healthcare, after all, is an industry that benefits from capitalism and market forces: its abuses and weaknesses should be corrected through private-sector innovation and pro-competition, pro-consumer policies.

A Dem View of Healthcare

By contrast, healthcare is more prominent in the Democrat’s platform as the party convenes for its convention in Chicago August 19. Women’s health and access to abortion, excess profitability by “corporate” drug manufacturers, hospitals and insurers, inadequate price transparency, uneven access and household affordability will be core themes in speeches and ads, with a promise to reverse the Dobb’s ruling by the Supreme Court punctuating every voter outreach.

Healthcare, to the Democratic-leaning voters is a right, not a privilege.

Its majority think it should be universally accessible, affordable, and comprehensive akin to Medicare. They believe the status quo isn’t working: the federal government should steward something better.

Here’s what we know for sure:

  1. Foreign policy will be a secondary focus. The campaigns will credential their teams as world-savvy diplomats who seek peace and avoid conflicts. Nationalism vs. globalism will be key differentiator for the White House aspirants but domestic policies will be more important to most voters.
  2. Healthcare reform will be a more significant theme in Campaign 2024 in races for the White House, U.S. Senate, U.S. House of Representatives and Governors. Dissatisfaction with the status quo and disappointment with its performance will be accentuated.
  3. The White House campaigns will be hyper-negative and disinformation used widely (especially on healthcare issues). A prosecutorial tone is certain.
  4. Given the consequence of the SCOTUS’ Chevron ruling limiting the role and scope of agency authority (HHS, CMS, FDA, CDC, et al), campaigns will feature proposed federal & state policy changes and potential Cabinet appointments in positioning their teams. Media speculation will swirl around ideologues mentioned as appointees while outside influencers will push for fresh faces and new ideas.
  5. Consumer prices and inflation will be hot-button issues for pocketbook voters: the health industry, especially insurers, hospitals and drug companies, will be attacked for inattention to affordability.
  6. Substantive changes in health policies and funding will be suspended until 2025 or later. Court decisions, Executive Orders from the White House/Governors, and appointments to Cabinet and health agency roles will be the stimuli for changes. Major legislative and regulatory policy shifts will become reality in 2026 and beyond. Temporary adjustments to physician pay, ‘blame and shame’ litigation and Congressional inquiries targeting high profile bad actors, excess executive compensation et al and state level referenda or executive actions (i.e. abortion coverage, price-containment councils, CON revisions et al) will increase.
  7. Total healthcare spending, its role in the economy and a long-term vision for the entire system will not be discussed beneath platitudes and promises. Per the Congressional Budget Office, healthcare as a share of the U.S. GDP will increase from 17.6% today to 19.7% in 2032. Spending is forecast to increase 5.6% annually—higher than wages and overall inflation. But it’s too risky for most politicians to opine beyond acknowledgment that “they feel their pain.”

My take:

Regardless of the election outcome November 5, the U.S. healthcare industry will be under intense scrutiny in 2025 and beyond. It’s unavoidable.

Discontent is palpable. No sector in U.S. healthcare can afford complacency. And every stakeholder in the system faces threats that require new solutions and fresh voices.

Stay tuned.

The CBO Health Insurance Status Report: Four Reasons it’s Overly Optimistic

Posted on by • Posted in 2024 Election Issues, Congressional Budget Office (CBO), Health Insurance Coverage Adequacy, High Cost of Living, High Cost Therapies, High Premiums, High Prices, Medicaid, Medicaid Eligibility, Medicaid Expansion, Medical Debt, Medicare, Out of Pocket Expenses, Underinsured, Uninsured • Leave a comment
The CBO Health Insurance Status Report: Four Reasons it’s Overly Optimistic

In the Congressional Budget Office’ latest report on the status of health insurance coverage from the 2023 National Health Interview Survey released last week, a cautiously optimistic picture of coverage is presented:

  • “In 2023, 25.0 million people of all ages (7.6%) were uninsured at the time of interview. This was lower than, but not significantly different from 2022, when 27.6 million people of all ages (8.4%) were uninsured. Among adults ages 18 64, 10.9% were uninsured at the time of interview, 23.0% had public coverage, and 68.1% had private health insurance coverage.
  • The percentage of adults ages 18-64 who were uninsured in 2023 (10.9%) was lower than the percentage who were uninsured in 2022 (12.2%).
  • Among children ages 0–17 years, 3.9% were uninsured, 44.2% had public coverage, and 54.0% had private health insurance coverage.
  • The percentage of people younger than age 65 with exchange-based coverage increased from 3.7% in 2019 to 4.8% in 2023.”

That represents the highest level of coverage in modern history. Later, it adds important context: The percentage of adults ages 18–64 who were uninsured decreased between 2019 and 2023 for all family income groups shown except for adults in families with incomes greater than 400% FPL. Notably, a period in which the Covid-19 pandemic prompted federal government’s emergency funding so households and businesses could maintain their coverage.

  • “Among adults with incomes below 100% FPL, the percentage who were uninsured in 2023 (20.2%) was lower than, but not significantly different from, the percentage who were uninsured in 2022 (22.7%).
  • Among adults with incomes 100% to less than 200% FPL, the percentage who were uninsured decreased from 22.3% in 2022 to 19.1% in 2023.
  • Among adults with incomes 200% to 400% FPL, the percentage who were uninsured decreased from 14.2% in 2022 to 11.5% in 2023.
  • No significant difference was observed in the percentage of adults with incomes above 400% FPL who were uninsured between 2022 (4.1%) and 2023 (4.3%).”
  • In 2023, among adults ages 18–64, the percentage who were uninsured was highest among health insurance coverage of any type was higher for those with higher household income but decreased coverage in 2023 correlated to ethnicity, non-expansion of state Medicaid programs: From 2019 to 2023.”
  • And decreases in the ranks of the uninsured were noted across all ethnic groups:
    • Among Hispanic adults, from 29.7% to 24.8%
    • Among Black non-Hispanic adults, from 14.7% to 10.4% in 2023
    • Among White non-Hispanic adults, decreased from 10.5% to 6.8%
    • Among Asian non-Hispanic adults, from 8.8% to 4.4% in 2023.

The New York Times noted “The drops cut significantly into gaps between ethnic groups. The uninsured rate among Black Americans, for example, was almost 8% higher than for white Americans in 2010, and was only 4%higher in 2022. The data points to the broad effects of the Affordable Care Act, the landmark law President Barack Obama signed in 2010 that created new state and federal insurance marketplaces and expanded Medicaid to millions of adults. National uninsured rates have continued to drop in recent years, hitting a record low in early 2023.”

But the report also flags a reversal of the trend: “The uninsured share of the population will rise over the course of the next decade, before settling at 8.9% in 2034, largely as a result of the end of COVID-19 pandemic–related Medicaid policies, the expiration of enhanced subsidies available through the Affordable Care Act health insurance Marketplaces, and a surge in immigration that began in 2022. The largest increase in the uninsured population will be among adults ages 19–44. Employment-based coverage will be the predominant source of health insurance, and as the population ages, Medicare enrollment will grow significantly. After greater-than-expected enrollment in 2023, Marketplace enrollment is projected to reach an all-time high of twenty-three million people in 2025.”

My take:

A close reading of this report suggests its forecast might be overly optimistic. it paints a best-case picture of health insurance coverage that under-estimates the realities of household economics and marketplace trends and over-estimates the value proposition promoted by health insurers to their customers. My conclusion is based on four trends that suggest coverage might slip more than the report suggests:

  1. The affordability of healthcare insurance is increasingly problematic to lower- and middle-income households who face inflationary prices for housing, food, energy and transportation. The CBO report verifies that household income is key to coverage and working age populations are most-at risk of losing its protections. Subsidies to fund premiums for those eligible, employer plans that expose workers to high deductibles and increased non-covered services are likely to push fewer to enroll as premiums become unaffordable to working age adults and unattractive to their employers. As outlined in a sobering KFF analysis, half of the adult population is worried about the affordability of their healthcare—and that includes 48% who have health insurance. And wages in the working age population are not keeping pace with prices for food, shelter and energy, leaving healthcare expenses including their insurance premiums and out-of-pocket obligations at greater risk.
  2. The value proposition for health insurance coverage is eroding among employers, consumers and lawmakers. To large employers that provide employee insurance, medical costs are forcing benefits reduction or cessation altogether. Insurance has not negated their medical costs. To small employers, it’s an expensive bet to recruit and keep their workforce. To government sponsors (i.e. Medicare, Medicaid, VHA, et al), insurance is a necessary but increasingly expensive obligation with growing dependence on private insurers to administer their programs. State and federal regulators are keen to limit public spending and address disparities in their public insurance programs. All recognize that private insurers play a necessary role in the system and all recognize that confidence in health insurance protections is suspect. Thus, increased regulation of private insurers is likely though unwelcome by its members.
  3. Public funding for government payers will be increasingly limited increasing insurer dependence on private capital for sustainability and growth. Funding for Medicare, Medicaid, Veterans and Military Health, Public Health et al are dependent on appropriations and tax collections. All are structured to invite private insurer participation: all are seeing corporate insurers seize market share from their weaker competitors. The issues are complex and controversial as evidenced by the ongoing debates about fairness in Medicare Advantage and administration of Medicaid expansion among others. And polls indicate widespread dissatisfaction with the system and lack of confidence in its insurers, hospitals, physicians or the government to fix it.
  4. Access to private capital for private health insurers is shrinking enabling corporate insurers to play bigger roles in financing and delivering services. Private investments in healthcare services (i.e. hospitals, physicians, clinics) has slowed and momentum has shifted from sellers to buyers seeking less risk and higher returns. Capital deployment by corporate insurers i.e. UHG, HUM et al has resulted in vertically-integrated systems of health inclusive of physician services, drug distribution, ASCs and more. And funding for AI-investments that lower their admin costs and increase their contracting leverage with providers is a strategic advantage for corporate insurer that operate nationally at scale. Unless the federal government bridles their growth (which is unlikely), corporate insurers will control national coverage while others fail.

Thus, no one knows for sure what coverage will be in 2034 as presented in the CBO report. Its analysis appropriately considers medical inflation, population growth and an incremental shift to value-based purchasing in healthcare, but it fails to accommodate highly relevant changes in the capital markets, corporate insurer shareholder interests and voter sentiment.

P.S. This is an important week for healthcare: Today marks the two-year anniversary of the Supreme Court’s Dobbs decision that overturned Roe v. Wade, ending the constitutional right to an abortion that pushed reproductive rights to states.

And Thursday in Atlanta, President Joe Biden and former President Donald Trump will make history in the first presidential debate between an incumbent and a former president.

Reproductive rights will be a prominent theme along with immigration and border security as wedge issues for voters.

The economy and inflation are the issues of most consequence to most voters, so unless the campaigns directly link healthcare spending and out of pocket costs to voter angst about their household finances, not much will be said.

Notably, half of the U.S. population have unpaid medical bills and medical debt is directly related to their financial insecurity. Worth watching.

Handicapping the Players in the Quest for Healthcare Affordability

Posted on by • Posted in 2024 Election Issues, Affordability, Health Insurance Industry, Health System, Healthcare Reform, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Medical Debt, Out of Pocket Expenses, Pharmaceutical Industry, Physician, Private Equity, Retail Healthcare • Leave a comment
Handicapping the Players in the Quest for Healthcare Affordability

As campaigns for November elections gear up for early voting and Congress considers bipartisan reforms to limit consolidation and enhance competition in U.S. healthcare, prospective voters are sending a cleat message to would-be office holders:

Healthcare Affordability must be addressed directly, transparently and now.

Polling by Gallup, Kaiser Family Foundation and Pew have consistently shown healthcare affordability among top concerns to voters alongside inflation, immigration and access to abortion. It is higher among Democratic-leaning voters but represents the majority in every socio-economic cohort–young and old, low and middle income and households with/without health insurance coverage., urban and rural and so on.  

It’s understandable: household economic security is declining: per the Federal Reserve’s latest household finances report:

  • 72% of US adults say they are doing well financially (down from 78% in 2021)
  • 54% say they have emergency savings to cover 3 months expenses ($400)—down from high of 59% in 2015.
  • 69% say their finances deteriorated in 2023. They’re paying more for groceries, fuel, insurance premiums and childcare.
  • Renters absorbed a 10% increase last year and mortgage interest spike has put home ownership beyond reach for 6 in 10 households

Thus, household financial security is the issue and healthcare expenses play a key role. Drug prices, hospital consolidation, price transparency and corporate greed will get frequent recognition in candidate rhetoric. “Reform” will be promised. And each sector in the industry will offer solutions that place the blame on others.

Granted, the U.S. health system lacks a uniform definition of healthcare affordability. It’s a flaw. In the Affordable Care Act, it was framed in the context of an individual’s eligibility for government-subsidized insurance coverage (8.39% adjusted gross income for households between 100% and 400% of the federal poverty level). But a broader application to the entire population was overlooked. Nonetheless, economists, regulators and consumers recognize the central role healthcare affordability plays in household financial security.

Handicapping the major players potential to win the hearts and minds of voters about healthcare affordability is tricky:

  • Each major sector has seen the ranks of its membership decrease and the influence (and visibility) of its bigger players increase. They’re easy targets for industry critics.
  • Each sector is seeing private equity and non-traditional players play bigger roles. The healthcare landscape is expanding beyond the traditional players.
  • Each sector is struggling to make their cases for incremental reforms while employers, legislators and consumers want more. Bipartisan support for anything is a rarity: an exception is antipathy toward healthcare consolidation and lack of price transparency.
  • All recognize that affordability is complicated. Unit cost and price increases for goods and services are the culprit: excess utilization is secondary.

Against this backdrop, here’s a scorecard on the current state of preparedness as each navigates affordability going into Campaign 2024:

SectorAdvantagesDisadvantagesHandicap Score1=Unprepared to5=Well Prepared
HospitalsCommunity presence (employer, safety net)
Economic impact
Influence in Congress
Scale: 30% of spending + direct employment of 52% of physicians
Access to capital		Lack of costs & price transparency Unit costs inflation due to wage, supply chain & admin
Shifting demand for core services.
Low entry barriers for key services
Regulator headwind (state, federal).
Operating, governing culture
Value proposition erosion with employers, pre-Medicare populations
Consumer orientation 		3
PhysiciansConsumer trust
Influence in Congress
Shared savings (Medicare)
Essentiality
Specialization
Access to technology 		Care continuity
Inadequacy of primary care
Disorganization (fragmentation)
Value of shared savings to general population (beyond Medicare)
Culture: change-averse (education, licensing performance measurement, et al)
Data: costs, outcomes 		2
Drug ManufacturersIncreasing product demand
Influence in Congress
Public trust in drug efficacy
Insurance structure that limits consumer price sensitivity to OOP
Potential for AI -enabled discovery, market access
Access to private capital
Congress’ constraint on PBMs		Unit cost escalation
Lack of price transparency
Growing disaffection for FDA
Long-term Basic Research Funding
State Price Control Momentum
Market access
Restrictive Formulary Growth
Transparency in Distributor-PBM business relationships
Public perception of corporate greed 		2
Health InsurersAvailability of claims, cost data
Employer tax exemptions
Growing government market
Plan design: OOP, provider access
Public association: coverage = financial security
Access to private capital  		Escalating premiums
Declining group market
Growing regulatory scrutiny (consolidation, data protection)
Tension with health systems
Value proposition erosion among government, employers, consumers   		4
Retail HealthNon-incumbrance of restrictive regulatory framework
Consumer acceptance
Breadth of product opportunities
Access to private capital
Opportunity for care management (i.e. CVS- Epic)
Operational orientation to consumers (convenience, pricing, et al)
Potential with employers,  		Lack of access, coordination with needed specialty care
Threat of regulatory restraint on growth
Risks associated with care management models   		3

The biggest, investor-owned health insurers own the advantage today. As in other sectors, they’re growing faster than their smaller peers and enjoy advantages of scale and private capital access to fund their growth. A handful of big players in the other sectors stand-out, but their affordability solutions are, to date, not readily active.

In each sector above, there is consensus that a fundamental change in the structure, function and oversight of the U.S. health is eminent. In all, tribalism is an issue: publicly-owned, not for profits vs. investor-owned, independent vs. affiliated, big vs. small and so on.

Getting consensus to address affordability head on is hard, so not much is done by the sectors themselves. And none is approaching the solution in its necessary context—the financial security of a households facing unprecedented pressures to make ends meet. In all likelihood, the bigger, more prominent organizations in their ranks of these sectors will deliver affordability solutions well-above the lowest common denominators that are comfortable for most Thus, health care affordability will be associated with organizational brands and differentiated services, not the sectors from which their trace their origins. And it will be based on specified utilization, costs, outcome and spending guarantees to consumers and employers that are reasonable and transparent.