Last week, during the U.S. Senate and House recess and back-to-school rush, media attention to healthcare was negligible. Healthcare trade media noted impressive earnings for Moderna and Bon Secours and the WSJ Journal announced a Medicare Advantage partnership between Costco and SCAN. No major Executive Orders from the White House or CMS rule changes. No major clinical breakthroughs, vaccine policy changes or lawsuits. But a couple of new reports frame the existential risk facing the industry: spending.
AON forecast for employer health spending: AON forecasts employers will see a 9.5% increase in 2027–the same as this year after increases of 9% in 2025 and 8.5% in 2024.
U.S. National Debt: The national debt officially passed the $40 trillion mark Wednesday, which includes $2 trillion this year. Note: Healthcare spending is a major contributor representing 27% of total federal spending.
The common theme in both is the steady growth of healthcare spending—faster than wages, higher than inflation and GDP growth and increasingly the result of higher prices for drugs, specialty services, facility modernization, technology and administrative overhead.
The industry’s aversion to transparency, protection of its business-to-business economics and dependence on private investment perpetuate four myths that justify its proclivity for uncontested spending:
Myth One: Healthcare utilization is the result of verifiable (true) demand despite evidence that induced demand from financial incentives is significant and unnecessary care widespread.
Myth Two: Healthcare spending above overall economic growth is necessary because demand is increasing though unit price increases for drugs, specialty care and hospital outpatient services exceed demand routinely.
Myth Three: Healthcare spending growth is unavoidable as the population ages, medical problems become more complex and clinical breakthroughs (like GLP-1 obesity drugs) are integrated in the system though the industry enjoys legal protections to insiders that limit competition.
Myth Four: Healthcare spending in the U.S. system is necessary to our performance as the world’s global leader for quality though at least 15 other systems outperform the U.S. in key measures of mortality, morbidity, life expectancy and satisfaction while spending 30-50% less per capita on healthcare.
As the midterm election November 3 nears, affordability and costs of living will be prominent in campaign rhetoric. Polling indicates healthcare costs, especially insurance premiums, prescription drug costs and hospital care, factor heavily in how voters assess promises on the campaign trail. Both parties espouse the need for systemic change in healthcare citing affordability for their reasoning. Three general solutions have found their way into this election cycle:
Price controls imposed selectively by state/federal government applied to hospitals, insurance premiums, physician services and prescription drugs.
Increased competition enacted through mandatory price transparency, constraints on consolidation and incentives based on value (price + outcome) instead of volume.
Government control of healthcare payments (single payer) to providers to align spending with budgets while lowering administrative costs for participation.
The reality is none of these is without risk, and voters are wildly misinformed about all. But there’s no doubt they’ll be on the table as a majority consensus forms around a better system. They’re sick of the status quo. They see little difference between not-for-profit and for-profit operators and want something better. They see healthcare spending increases as the product of an industry that cares about its profit first and everything else second.
Healthcare spending—contributing factors and mitigation– is a topic every organization in healthcare must address candidly and holistically. There should be no delusion that interest will subside anytime soon. Just as consumers are rewarding organizations in financial services, retail, higher education and organized religion that offer “newer, better” alternatives, the healthcare landscape will be re-defined by those that do more than opine about affordability and conduct business as usual.
New data finds rapidly declining satisfaction and trust among Medicare Advantage enrollees, particularly around costs and coverage.
Americans enrolled in Medicare Advantage plans are becoming increasingly less satisfied with their coverage (and increasingly skeptical that their insurers are looking out for them) according to the new 2026 U.S. Medicare Advantage Study from JD Power.
The study found that overall satisfaction with Medicare Advantage plans fell for the second year in a row (dropping 12 points) and has dropped 41 points since 2024. On JD Power’s 1,000-point scale, the average Medicare Advantage plan now scores 611.
JD Power surveyed 14,559 Medicare Advantage health plan enrollees across 12 major markets between January and June. Researchers evaluated insurers on eight parts of the enrollees’ experience, including trust, access to health services, whether plans save them time and money, whether coverage meets their needs, customer service and how well complaints are resolved.
Satisfaction with plans’ ability to help enrollees save time and money fell 51 points. Their level of trust fell 49 points, while satisfaction with whether a plan’s coverage actually met their needs dropped 47 points.
And fewer than half — just 43% — of people enrolled in Medicare Advantage plans strongly agreed that their insurer was a “trusted partner” in their health and wellness.
One of the clearest differences between higher- and lower-performing plans came down to something relatively basic: helping people understand the insurance they just bought.
So, which plans came out on top?
JD Power did not produce one nationwide ranking of every Medicare Advantage insurer. Instead, it compared plans within 12 individual markets. Below the simple version of which insurer scored highest in each:
California: Kaiser Permanente — 665
Florida: UnitedHealthcare — 621
Georgia: UnitedHealthcare — 656
Illinois: Blue Cross Blue Shield of Illinois — 638
Kentucky: Humana — 625
Michigan: Blue Cross Blue Shield of Michigan — 676
New York: Excellus BlueCross BlueShield — 618
North Carolina: UnitedHealthcare — 645
Ohio: Aetna Medicare — 639
Pennsylvania: UPMC For Life — 689
Tennessee: Blue Cross Blue Shield of Tennessee — 690
Texas: Humana — 641
Tennessee’s Blue Cross Blue Shield plan received the highest score of any market winner, at 690, narrowly ahead of Pennsylvania’s UPMC For Life at 689. The results have also been summarized by Becker’s, which published both the highest-rated plans and lowest-rated plans in each market.
The rankings also show how much people’s experiences with national insurance companies can vary from state to state. UnitedHealthcare, for example, finished first in Florida, Georgia and North Carolina and second in Illinois, Kentucky, Texas and some other markets included in the study. Yet its Michigan plan received a score of just 571, making it the lowest-rated plan JD Power measured in that market.
Humana showed an even wider divide. It finished first in Kentucky and Texas, but its New York plan received a score of 554 — the lowest score reported across all 12 markets.
The federal government has also changed how Medicare Advantage plans are evaluated. Earlier this year, the Centers for Medicare & Medicaid Services (CMS) finalized a significant overhaul of its Star Ratings system, which is supposed to measure the quality and performance of Medicare Advantage and Part D plans. Insurers watch the measures closely because they affect bonus payments they receive. CMS claims the changes will simplify the ratings and focus them more heavily on clinical care, health outcomes and patient experience. The changes include eliminating 11 measures — several related to complaints, appeals and call-center performance — and abandoning a planned Health Equity Index reward intended to incentivize better performance for certain enrollees, including people who are low-income, disabled or dually eligible for Medicare and Medicaid. Instead, CMS will retain its older reward system for plans that perform consistently well across measures.
CMS argues that some of the measures being eliminated are administrative, duplicative or do little to distinguish one plan from another, and that trimming them will make Star Ratings more useful to beneficiaries. But the changes have drawn criticism from Democratic lawmakers and Medicare consumer advocates, who argue that CMS is removing some of the very measures that can help hold insurers accountable for how they treat patients.
In an April letter to CMS Administrator Mehmet Oz, Sen. Elizabeth Warren and seven other Democratic senators specifically objected to the removal of administrative measures that track complaints involving the timeliness or accuracy of prior authorization decisions. The senators argued that weakening those measures is particularly concerning at a time when Medicare Advantage insurers are facing scrutiny over care denials and billions of dollars in estimated overpayments from the federal government.
The letter also pointed out that Oz has publicly acknowledged that prior authorization can significantly delay care and erode trust in the health care system, yet CMS is removing some Star Ratings measures related to prior authorization while the administration is simultaneously testing A.I-powered prior authorization in traditional Medicare via the Wasteful and Inappropriate Service Reduction (WISeR) program.
The Medicare Rights Center, an advocacy organization representing Medicare beneficiaries, has criticized CMS’s decision to scrap the Health Equity Index before it ever took effect and return to the previous reward factor. The group also objected to CMS eliminating a requirement that plans notify members midway through the year about supplemental benefits they are eligible for but have not used.
And the rollback extends beyond the Star Ratings themselves. The final rule eliminates requirements for Medicare Advantage utilization-management committees to include a health-equity expert, analyze how their policies affect certain populations and publicly report those analyses.
The Alliance of Community Health Plans, which represents nonprofit regional health insurers, praised CMS for eliminating the Health Equity Index and said the broader Star Ratings changes would shift the program away from “documentation and paperwork” and toward patient experience and health outcomes.
For insurers, there is a lot of money riding on those Star ratings. CMS estimates that Medicare Advantage plans will receivemore than $13 billion in additional federal payments next year — even as the government adjusts how plans are scored (and paid) and results like JD Power’s get released. That is in addition to the $76 billion in overpayments that MedPAC, an independent organization that advises Congress on Medicare issues, says the government is paying Medicare Advantage insurers this year alone.
The JD Power results, however, offer another way of looking at the program: not simply whether insurers are meeting government quality metrics, but whether the people enrolled in their plans actually feel that the coverage is working for them. And by that measure, satisfaction is moving fast in the wrong direction.
Big Insurance has hauled in $500B in profits since 2014— enough to cover extending the enhanced ACA subsidies and leave $150B — yet it’s gone to shareholders and executive bonuses instead of patients.
As open enrollment begins and Congress remains deadlocked on whether to extend the ACA’s enhanced premium subsidies, one question looms large: Where does all the money we pay for health coverage actually go?
It’s a fair question. Premiums and out-of-pocket costs have risen relentlessly over the past decade. Since the Affordable Care Act was fully implemented, the average premium for an ACA marketplace plan has doubled, and the average deductible for a Silver plan has increased by 92%. Every year, families pay more, yet the coverage often feels thinner.
What the Insurers Say
Health insurance companies routinely claim these increases simply reflect rising medical costs and higher utilization. For example, when justifying rate hikes in 2024, Cigna of Texas wrote:
“The increasing cost of medical and pharmacy services and supplies accounts for a sizable portion of the premium rate increases.”
But the financial filings of these same companies tell a different story.
What the Numbers Show
As Wendell Potter recently wrote, from 2014 to 2024 the seven largest publicly traded health insurance companies, UnitedHealth Group, CVS/Aetna, Cigna, Elevance (formerly Anthem), Humana, Centene, and Molina, reported that they collectively made more than half a trillion dollars in profits.
That’s money collected from individuals, employers and taxpayers for health coverage — dollars that didn’t go to medical care but instead flowed to corporate shareholders and executive bonuses. To put this in perspective, those profits alone could fund the enhanced ACA premium subsidies for another ten years, at an estimated cost of $350 billion.
Over the same period, these seven companies spent $146 billion buying back their own stock or, in other words, using premium dollars from patients and employers to boost share prices and executive compensation (the CEOs and many other top executives of big insurers are compensated primarily through stock grants and options).
Stock buybacks don’t lower premiums, expand networks, or improve care. They simply make investors and executives richer. If that same money had been reinvested in enrollees, it could have provided premium-free health coverage to more than 5 million families for an entire year, based on the average employer-sponsored plan cost of $27,000 in 2026.
Lobbying With Our Premium Dollars
Insurers aren’t just rewarding shareholders, they’re also shaping the political system that protects their profits. Since 2014, the seven largest insurers and their trade association, AHIP, have spent $618 million on lobbying.
That’s money that could have been used to lower out-of-pocket costs or improve patient care, but instead it’s spent to influence Congress and federal agencies to maintain the status quo.
The Real Problem — and the Real Solution
As the cost of health insurance continues to climb, politicians debate how to control those costs and expand coverage. But the truth is, there’s already enough money in the system to cover everyone. It’s just being siphoned off by insurance corporations for profits, lobbying, and stock buybacks.
Though some have been calling for less regulation of Big Insurance, that is not the answer and is partly how we ended up in this situation. Right now, Big Insurance is allowed to use premium dollars and tax dollars on things that do nothing to improve anyone’s health – such as stock buybacks and lobbying – instead of on medical care.
Rather than asking families and taxpayers to pay more, it’s time to demand accountability from insurers. At a minimum, they should not be allowed to use premium dollars, or taxpayer dollars, to enrich shareholders through stock buybacks (which wasn’t even legal until the 1980s) or lobby for policies that drive up costs.
If we want to contain health care costs, the first step is simple: Stop the profiteering by Big Insurance.
First-time prescription rejections rose 67% between 2018 and 2024, with nearly half of denied patients receiving no comparable medication within 90 days.
A new study published in JAMA puts hard numbers behind something patients and doctors have been telling me for years: getting a prescription filled increasingly means running an obstacle course of denials, prior authorization forms, and step therapy requirements — and a lot of people never make it through.
Researchers from Johns Hopkins Bloomberg School of Public Health and the American Enterprise Institute analyzed more than 2 million first-time attempts to fill prescriptions for brand-name drugs that have no generic alternative, using pharmacy claims data covering nearly every major insurance market in the country: commercial plans, Medicare, Medicare Advantage, Medicaid, and ACA marketplace plans. The data ran from January 2018 through September 2024.
Here’s what they found:
Rejections are way up. In 2018, insurers turned down 24.3% of first-time fill attempts for these drugs. By 2024, that had jumped to 40.7% — a 67% increase.
Coverage rules are the driver. Overall, 32% of initial attempts were rejected: 14.8% because the drug was excluded from the formulary outright, and 17.2% because it required prior authorization or step therapy — insurer-speak for “try something cheaper first.”
Nearly half of rejected patients got nothing. Of everyone who was turned down, only 38.6% eventually got the original drug within 90 days, and 13% got a different drug in the same class. But 48.4% — essentially half — received no medication in that class at all within three months.
Delays add up. Even patients who eventually got their medicine waited an average of 12.2 days after the initial rejection.
Where you get your coverage matters enormously. Rejection rates were highest in ACA marketplace plans (48.7%) and Medicaid managed care (49.8%) — nearly one in two prescriptions. Traditional Medicare drug plans (24.0%) and Medicare Advantage (19.8%) had noticeably lower rejection rates.
Why this matters
The insurance industry has a ready answer for all of this: prior authorization and step therapy exist to control costs and steer patients toward drugs with the best evidence behind them, not just the most expensive ones. There’s some truth in that — utilization management can reduce unnecessary spending and has, in some cases, nudged prescribing toward cheaper, equally effective alternatives.
But this study makes clear that the tradeoff is not small or hypothetical. When nearly half the people who get turned down simply never receive treatment in that drug class — not “later,” not “with a substitute,” but never, at least within 90 days — that’s not utilization management working as intended but as a barrier that outright blocks care for a huge share of patients, many of whom presumably still need what their doctor originally prescribed.
The study lands in the middle of a real fight over these practices. Federal regulators have been pushing to speed up and standardize prior authorization. Several states have passed laws limiting insurer review times, exempting doctors with track records of low rejection rates from prior authorization requirements altogether, or requiring plans to honor authorizations a patient already has when they switch coverage.
Insurers will point out that some of the increase in rejections reflects more brand-name drugs entering the market during the study period. But that doesn’t explain away the core finding: patients across every type of coverage are hitting more roadblocks, and for close to half of them, the medicine their doctor decided they needed simply never arrives.
Absence of mandatory federal reporting on 340B revenues and expenditures is viewed as the program’s core governance gap, despite existing audit authority focused on duplicate discounts and diversion.
Eligibility criteria tied to disproportionate Medicaid/uninsured volume remain contested, with examples showing large academic systems generating far more 340B margin than charity-care outlays compared with public safety-net hospitals.
Use of savings ranges from keeping small hospitals solvent to subsidizing high-cost service lines, yet lack of spending requirements can incentivize expansion in affluent markets and shift costs to payers.
Manufacturers are criticized for contract-pharmacy restrictions and demands for claims data, while also allegedly pricing 340B discounts into list prices; limited HRSA rulemaking authority perpetuates litigation.
Does the 340B program help hospitals provide care and other services to low-income patients? Or has the program grown beyond what was initially intended, with undeserving institutions taking advantage of it?
Two industry leaders addressed these questions and more during a webinar sponsored by Managed Healthcare Executive, Drug Topics and the Pharmacy Benefit Management Institute.
Tom Kraus, J.D., chief advocacy officer and vice president of government relations at the American Society of Health-System Pharmacists, argued in favor of the program’s value to patients. “Hospitals are still operating on incredibly thin margins across the board. The average is around 1%; almost half are operating at negative margins. It’s just not true that they’re somehow getting rich off this. They’re using it to provide patient care in communities that need it and to patients that need it.”
But Shawn Gremminger, president and CEO of the National Alliance of Healthcare Purchaser Coalitions, said the program has “grown out of control, and it doesn’t have the guardrails it needs. What 340B has tried to accomplish is absolutely valid; I fully support it. But it’s plainly obvious to anybody that the time is now for Congress and policymakers to get together and say we can make this program actually work.”
The 340B program allows qualifying hospitals and other providers, such as federally qualified health centers, to purchase medications at discounted rates from drug manufacturers and use the difference between the discounted price and the reimbursement from commercial insurers and other payers to fund patient care services.
The 340B program generated roughly $100 billion in discounted drug purchases last year, growing 23%, compared with less than 10% growth in overall U.S. prescription drug spending.
Since its implementation in 1992, more than half of U.S. hospitals participate in the program.
The Health Resources & Services Administration (HRSA), which oversees the 340B program, is currently reviewing comments and determining next steps for a pilot 340B rebate program for drugs that were part of the Inflation Reduction Act’s Medicare Drug Price Negotiation Program.
Here are four key takeaways from the webinar:
1: Transparency and oversight
There is no federal requirement that hospitals report how much 340B revenue they collect or how they spend it. Gremminger argued that this absence of reporting is the program’s central flaw. “The underlying problem with 340B is it creates economic distortions,” he said. “The program is so problematic because it has virtually no oversight. The Health Resources and Services Administration, which oversees nominally 340B, has been found by courts to have basically no ability to actually create rules.”
Gremminger said payers want to know how much hospitals make and what they do with the money. He pointed to states, such as Minnesota, that are beginning to require covered entities to report this information.
Kraus countered that HRSA and manufacturers already have audit authority when there is a specific concern, such as a suspected duplicate discount, and that 340B dollars are not separately traceable once they reach a hospital’s books.
2: What counts as a safety net hospital?
Much of the debate centered on which hospitals should qualify for participation in the program. Gremminger cited Minnesota data showing that M Health Fairview, the University of Minnesota’s academic medical center, netted more than $300 million in 340B revenue last year while providing about $17 million in charity care, compared with Hennepin Healthcare, a public safety-net hospital that made roughly $100 million in 340B revenue against $107 million in charity care. He argued dollars are flowing disproportionately to large, financially healthy systems rather than the rural and community providers the program was designed to protect.
Kraus said that hospitals in the program already treat a disproportionate share of Medicaid and uninsured patients to qualify. “The states have said payers should pay the normal rate, and they want the clinic or hospital to be able to use those dollars to subsidize care in their communities. I think that’s like a reasonable decision that states can make, and I think from my perspective, it helps us provide care to patients.”
3: What services should 340B dollars fund?
Kraus maintained that the law implies, though does not strictly require, that 340B savings support safety net care and noted three-quarters of small participating hospitals use the savings simply to stay open. Additionally, he said large academic centers often house the trauma centers, cancer centers, and emergency departments that require substantial, ongoing subsidy.
“At the end of the day, the program exists in order to subsidize the care of patients by allowing providers to purchase at a lower cost and sell to payers at a higher cost, which is the contracted rate. The program’s not designed to subsidize payers; it’s designed to subsidize providers so that they can survive.”
Gremminger said the lack of any spending requirement means some systems reinvest the 340B margin into facilities in higher-income, better-insured markets rather than expanding services for low-income patients, calling that an economic distortion that raises costs for employers, taxpayers, and working families through reduced Medicaid rebates and higher commercial pricing.
4: Pharma’s role in drug pricing
Both panelists were critical of drug manufacturers, although for different reasons. Kraus said pharmaceutical companies, which he noted operate on roughly 40% margins compared with hospitals’ roughly 1%, have pursued restrictions on contract pharmacy arrangements that have ended up in litigation. Manufacturers such as Eli Lilly are now requiring covered entities to turn over claims data as a condition of receiving discounts, which he characterized as a “fishing expedition” rather than a targeted integrity effort.
Gremminger agreed pharma bears responsibility for high drug prices because companies simply prices 340B’s cost into list prices, which he argued undermines any savings the program is meant to generate. Both agreed HRSA lacks the statutory authority for meaningful rulemaking, a gap they said invites continued litigation between manufacturers and hospitals.
The administrations new ACA rules encourage health insurers to offer loans for medical bills instead of addressing the soaring out-of-pocket costs driving Americans into debt.
Most Americans are familiar with UnitedHealth, the largest private health insurer in America – if not because the corporate giant provides their medical coverage, then because of the massive publicity when the CEO of its key subsidiary was assassinated on a Manhattan street in December 2024.
The shooting of Brian Thompson also sparked a nationwide debate over Big Insurance practices, after many came forward with horror stories about their denied claims for urgent medical care or other bad health insurance experiences. Yet there is one thing most Americans do not know about UnitedHealth: It also has a bank.
But a number of physicians did know about Optum Financial by the spring of 2025, and they were not happy. Some doctors said their practices had been forced to borrow money from Optum to deal with a crippling cyberattack on the medical payments system, and Optum then pressured them to quickly repay the money. One New Jersey specialist in pediatric neurology and neurosurgery told The New York Times: “Optum, in my opinion, is acting like a loan shark trying to rapidly collect.”
Now, financially pressed U.S. families might learn what it’s like to owe money to Optum, under a new plan from the Trump administration.
With out-of-pocket medical costs for Americans skyrocketing, new guidelines for the Affordable Care Act marketplace suggest that insurers begin offering loans to patients with sky-high deductibles and unexpected large medical bills, a loan that presumably would be repaid with interest.
“We note that multiyear and 1-year catastrophic plans may be able to offer relief from the high deductible and maximum annual limitation on cost sharing through other mechanisms,” reads the final rule. “For example, issuers of catastrophic plans could consider financing the deductible by providing enrollees a loan.”
Experts say the ACA rules for 2027 and 2028 from the Centers for Medicare & Medicaid Services reveal the administration’s focus on expanding consumer choice and reducing federal outlays while ignoring the core issue: higher out-of-pocket costs.
“They’re putting a lot of stock into the idea that people really want these extremely, extremely high deductibles and out-of-pocket costs,” said Katie Keith, director of the Center for Health Policy and the Law at the Georgetown University Law Center. “And so they’re coming up with all these attempts at workarounds, including things like making your insurance company your bank.”
The New York Times noted that UnitedHealth, with its Optum financial unit, is the one large insurer that’s already equipped to offer loan packages to patients who can’t afford their bills. In addition to its controversial program of loans to physician practices, Optum’s bank currently offers government-approved Health Savings Accounts, or HSAs, which allow patients to set aside pre-tax earnings for future medical bills. A UnitedHealth spokesperson wouldn’t comment to the Times on the new ACA rules.
It’s understandable why the Big Insurance icon wouldn’t be eager to weigh in on a concept that will only fuel consumer anger over the increasing unaffordability of health care. U.S. Rep. Shontel Brown, an Ohio Democrat, weighed in on the Trump administration scheme on the social media platform X by noting this would “supercharge medical debt.” She added: “This could ruin people’s finances, while creating a financial incentive for insurers to deny coverage.”
Indeed, a 2025 report from the health-policy organization KFF found that UnitedHealth had – along with two Blue Cross Blue Shield affiliates – one of the nation’s three highest rates of claims denials for its ACA Marketplace policies. Its reported denial rate of 33% was nearly double the overall national rate of 19%. Now UnitedHealth – which posted more than $12 billion in profits in 2025, the highest of the nation’s insurers – could make even more money from denying claims or raising deductibles and offering loans.
The crisis of high out-of-pocket medical costs in America has been spiraling rapidly since the Trump administration and the Republican-controlled Congress rejected extending enhanced federal subsidies that had made coverage under the ACA, or Obamacare, reasonably affordable.
For millions of Americans, the end of those subsidies – with some consumers getting 2026 monthly premium bills that have more than doubled – has meant shifting to the lowest level of Bronze ACA plans, which come with high annual deductibles. This will mean thousands of dollars in bills for an unexpected major illness.
The soaring premiums have also seen many families joining the growing ranks of the uninsured. One early analysis from KFF predicted that as many as 5.5 million Americans – or about 25% of the peak enrollment – will have dropped their ACA insurance by the end of 2026, The new negative aura around health insurance – higher premiums, higher-out-of-pocket costs for those choosing inferior plans, or those without any coverage at all – is behind a recent report that about one-third of all Americans are cutting routine expenditures or even skipping meals to deal with their rising doctor bills and drug costs.
Instead of continuing the subsidies that had brought a steep rise in ACA enrollment earlier in the decade, the Republican-led government insists it is addressing the growing affordability crisis with new options that dangle lower premiums with the much greater risk of painful out-of-pocket costs in an emergency.
The government’s new ACA rules for 2027 increase the number of people who’d be eligible to buy so-called catastrophic plans that might defray costs for an extreme medical emergency but put consumers on the hook for the costs of most doctor visits or prescriptions. This is on top of new rules that will allow insurers to raise deductibles for the third-tier Bronze plans to $15,600 for individual coverage or $31,200 per family.
The Trump administration hoped to boost catastrophic plans to spike their enrollment as high as 3 million Americans, but Louise Norris, the longtime expert who writes for Healthinsurance.org, noted that a variety of factors have prevented any surge in customers for these high-deductible plans. In some states, she noted, premiums are actually lower for the Bronze plans, and this year, only about 67,000 people have signed up for the catastrophic plans.
Norris said the Trump administration’s idea for insurance-company loans is “that you can pay back that deductible over time, [but] I’m not sure that would really offset those other factors in terms of making those plans appealing.” She added that, “if you don’t qualify for subsidies, and you’re looking for the cheapest plan you can get in a lot of areas, that’s actually going to be a Bronze plan.”
So the government seems determined to make catastrophic insurance popular when American consumers don’t really want it.
Instead, the various schemes in the new ACA rules for 2027 and beyond – pitched with a notion of offering consumers more choices instead of the cost relief that Americans need – are projected to cost a whopping $1.3 billion annually, while it’s projected that two million more people will likely drop their ACA coverage because of the expense.
While the Trump administration and its GOP allies on Capitol Hill own this current crisis, Democrats need to acknowledge their own complicity in the situation.
Democrats in the past have bent to insurers’ demands to make sure all the health plans offered in the ACA marketplace have cost-sharing requirements of some amount and also to allow the out-of-pocket maximum to be unaffordably high for most Americans – especially for people with chronic conditions and those with low incomes.
This year’s midterm election is an opportunity for candidates to promise that health care affordability will be a priority. The centerpiece of such an agenda should be lowering the outrageous out–of-pocket maximums. The Lower Out of Pockets NOW coalition, which I founded, supports a bill sponsored by Massachusetts Democratic U.S. Rep. Jake Auchincloss to extend the Biden-era Medicare prescription drug yearly out-of-pocket maximum of $2,000 (rising to $2,100 this year) to people enrolled in ACA marketplace plans.
Some states already offer innovative cost-control plans. For example, Massachusetts now requires issuers of individual coverage and fully insured group coverage to limit increases in the enrollees’ out-of-pocket costs to the Consumer Price Index inflation rate for the Boston area. For 2027, the cap will be 3.6%. The covered expenses include plan deductibles, copayments and coinsurance bills.
When the idea of loans from insurers like UnitedHealth was reported in The New York Times, an attorney commented on social media that “it’s hard to top this level of dystopia.” This is a wake-up call to focus on the real pathways to affordable health care.
A federal watchdog is renewing the debate over whether private insurers are overutilizing prior authorization to delay patient careNew polling shows how the Trump administration’s approach to health policy could impact the midterm electionsDrugmakers are tweaking GLP-1 formulations, showing that industry still views the drug category as a revenue winner It’s a sweltering day in Washington, and yet Health Brief persists.
Medicare Advantage, operated by private insurance plans, has come under scrutiny. (Jenny Kane/AP)
The Lead Brief:
A new report from a federal watchdog found that three of the nation’s largest Medicare Advantage insurers routinely denied requests for post-acute care services, which could intensify scrutiny of prior authorization practices in the rapidly growing program.The Office of Inspector General for the Department of Health and Human Servicesexamined more than 2,000 prior authorization decisions made in June 2024 by Aetna, UnitedHealthcare and Humana.→ That’s the subject of the latest report from The Post’s Christopher Rowland.The OIG focused on services often needed after a hospital stay, including long-term acute care hospitals and inpatient rehabilitation facilities. Delays or denials can leave patients stuck in hospitals longer than necessary or without access to specialized recovery services.The report found denial rates for long-term acute care hospitals ranged from 70 percent to 80 percent, while denials for inpatient rehabilitation services exceeded 50 percent across all three insurers.
Why it matters:
More than half of Medicare beneficiaries — roughly 35 million people — are now enrolled in Medicare Advantage plans, giving a handful of insurers enormous influence over access to care.“As enrollment in Medicare Advantage continues to grow, so does the urgency and importance of ensuring that [insurance companies] are delivering on the value that the federal government pays them to provide,” the OIG report said.Complaints about Medicare Advantage coverage denials are nothing new, but the report underscores the potential impact they can have.The Centers for Medicare and Medicaid Services, which oversees the Medicare Advantage program,has been working with insurers over the last year to scale back their use of prior authorization.
What to watch:
The report could add fuel to several legislative proposals on Capitol Hill that would require insurers to submit more information about claim denial rates and, for Medicare Advantage plans specifically, additional encounter data related to patient care. The OIG report found for-profit Medicare Advantage organizations denied coverage more frequently than nonprofit plans, a pattern investigators said suggests financial incentives may play a role in utilization management decisions.→ But the report’s data predates pledges that private insurers have made to decrease use of the practice for all consumers. Companies have reported early progress in reducing prior authorization for many services.“This report reflects data from 2024. Since then, health plans have voluntarily eliminated roughly 6.5 million prior authorizations across markets — including more than 15 percent in Medicare Advantage,” said Mary Beth Donahue, president and CEO of the Better Medicare Alliance.Insurers also pointed to previous findings, including ones from the HHS watchdog in 2018, that raised concerns about whether many inpatient rehab facilities met Medicare’s standards or were providing unnecessary care that ultimately harmed patients.“The reports ignore serious, well-documented concerns about wide variations in the cost and quality of post-acute care and skilled nursing facilities,” said Chris Bond, a spokesperson for insurance industry group AHIP.BUT WAIT, THERE’S MORE→
A companion report issued by the OIG also renews scrutiny of insurers’ use of contractors to conduct prior authorization reviews. Investigators found a UnitedHealth Group subsidiary, formerly known as NaviHealth, denied nursing home care more frequently than insurers themselves or other vendors. The subsidiary, which rebranded to Home & Community Care in 2024, has allegedly used an algorithm to determine care needs. The OIG report doesn’t mention the reported algorithm usage. UnitedHealth Group has maintained that coverage decisions are always made by a human, thereby rejecting claims that the algorithms led to improperly denied care. However, the claims are at the center of an ongoing lawsuit filed by the families of deceased Medicare Advantage patients. The inspector general is urging CMS to take action to ensure plans are not improperly denying care. CMS officials told Christopher the agency is examining insurance denials by collecting data through a pilot program and conducting audits. The agency added that it “will continue using its full range of oversight and enforcement tools to identify potential issues, hold plans accountable and strengthen program integrity while protecting beneficiary access to care.
In today’s issue:Hospitals are facing simultaneous payment cuts, new oversight and transparency proposals as policymakers look to rein in health care spendingDemocrats are making the GOP’s tax-and-spending law a centerpiece of their midterm messaging as Republicans pivot to selling its tax cutsA federal judge temporarily blocked Colorado’s first-in-the-nation prescription drug payment cap, handing Amgen an early win… and more.Happy Monday, and welcome back to Health Brief. Hope everyone had a relaxing holiday! Congress isn’t here this week, but the health policy world is showing no signs of slowing down. So let’s get into it. What do you have on your radar?
Speaking of the $900 billion in impending cuts to Medicaid: The One Big Beautiful Bill Act was supposed to be a crowning legislative achievement for Republicans to tout while campaigning in the midterm elections. Among other things: It prevented massive tax increases for most Americans and established a program that allows parents to open investment accounts for children born during President Donald Trump’s second term and receive $1,000 from the government. But the legislation has emerged as a central talking point for the Democratic Party, with congressional Democrats mentioning the law twice as often as Republicans, report Matthew Choi and Clara Ence Morse in The Washington Post newsroom. Democratic candidates are deriding it as the “Big Ugly Bill” and linking the changes it brought to Medicaid and food assistance programs to voters’ anxieties about the cost of living. Republicans, meanwhile, have largely retreated from talking about the law by name, instead opting to emphasize the tax savings and other proposals. Democrats assert that the shift is a sign of the Republican Party’s acknowledgment of the law’s low overall approval. “I don’t care what you call it. It’s what delivers for America,” House Republican Conference Chair Lisa McClain (Michigan) told my colleagues.
Read the full story: “Democrats invoke ‘big, beautiful bill’ far more than Republicans as midterms near. ”INDUSTRY RXA federal judge temporarily blocked Colorado from enforcing a state-set payment cap on a pricey medication for autoimmune disorders called Enbrel, siding with Amgen, the company that makes it, while the lawsuit moves forward. The case centers on whether Colorado’s Prescription Drug Affordability Review Board has the authority to limit what can be reimbursed for a patented drug. The board had determined that Enbrel was unaffordable and set a maximum payment level at roughly 70 percent below Amgen’s wholesale price. The judge found that Amgen is likely to win because an earlier federal appeals court ruling says states cannot impose price caps on patented drugs if doing so conflicts with federal patent law. The court said Congress — not individual states — gets to decide how to balance affordable drug prices with the financial incentives that patents provide for developing new medicines. The judge also agreed that Amgen could suffer “significant harm” if the cap took effect, including weaker negotiating power with wholesalers and contracts that would be difficult to undo later. It rejected the state’s claims that any harm was balanced by carveouts in the law, such as the payment limit applying to employer-based plans. “This is an argument about the scope of damages, not their existence,” the judge wrote.
Why it matters: States across the country have been setting up their own Prescription Drug Affordability Boards (PDABs) in an effort to try and rein in drug costs. Some act as advisory panels that develop policy, while others — including Colorado — are able to set upper payment limits. Enbrel’s price cap became the first in the nation, proving to be a test for other PDABs nationwide.The boards’ overall effectiveness and ability to lower medication prices in the states in which they’ve been established has come into question and became one of the reasons Democratic Gov. Abigail Spanberger (Virginia) vetoed bipartisan legislation to set up a PDAB in the state.“Drug manufacturers took a huge sigh of relief from this decision,” Andrew Twinamatsiko, a director of the Center for Health Policy and the Law at Georgetown Law, tells me.For now, Colorado cannot enforce the payment limit for Enbrel while the lawsuit continues. The ruling does not decide the entire case, but it pauses the state’s price cap until the court reaches a final decision.
What’s next: The court leans on a federal ruling that struck down a pharmaceutical price gouging law in Washington D.C., but Twinamatsiko said that structure of the law — which utilized international reference pricing — is different from how Colorado’s PDAB operates and “there are creative ways” the state could differentiate the two legally.
This week we’re highlighting a trio of stories that shed new light on issues An Arm and a Leg has been tracking closely:
A sharp investigation from our partners KFF Health News on who’s actually filing medical debt lawsuits.
How one state is cracking down on aggressive medical credit card marketing.
Some new, encouraging data suggesting more seniors can afford their medications.
Let’s go!
In at least one state, doctors are now suing patients more than hospitals are
One of the most perplexing realities we’ve come across while reporting on the U.S. health care system (and there are MANY) is this: Hospitals routinely sue their patients over medical debt, yet recoup very little money in the process. So why do they bother?
In fall 2023, we published a two–part investigation with Scripps News and The Baltimore Banner digging into that question.
Since then, we’ve been tracking efforts by advocates, lawmakers, and federal agencies to rein in the most aggressive medical debt collection practices — like destroying a patient’s credit, garnishing their wages, or foreclosing on homes.
And now, in at least one state — Connecticut — KFF Health News and the CT Mirror found that public pressure persuaded many hospitals to stop suing patients over medical debt altogether. Cool!
And recent legislation targeting aggressive medical debt collection practices doesn’t cover non-hospital health care providers. Neither do medical debt protection laws in most other states.
As one Connecticut state senator put it, lawmakers will need to to “go bigger if that’s where the heart of the matter is.”
On a brighter note, Connecticut has passed another law looking out for people facing medical debt…
New rules around CareCredit and other “medical” credit cards
Last week, Governor Ned Lamont signed a bill limiting the aggressive and confusing marketing of medical credit cards inside doctors’ offices and veterinary offices.
Connecticut joins California, Illinois, and New York in passing laws to protect patients from these financial traps.
Health care providers are increasingly pushing medical credit cards as an alternative to in-house payment plans. CareCredit, the biggest player in the field, says these cards are accepted at more than 285,000 locations, including many hospitals.
The appeal for providers is pretty straightforward: Outsourcing billing to a third party reduces administrative burden.
According to Patricia Kelmar, senior director of health campaigns with PIRG, patients frequently don’t understand what they’re agreeing to — whether they’re handed a form at the front desk or an iPad in the exam room.
“It’s just not the place to be looking at terms and conditions,” she says.
As we covered in a previous First Aid Kit, those terms and conditions usually include something scary: deferred interest. In most states, medical debt tied to medical credit cards also isn’t protected by the same consumer laws that cover regular medical debt — New York being the notable exception.
Connecticut’s new law adds meaningful friction that could make it harder for patients to sign up for something they don’t understand:
Health care providers can no longer submit or help fill out applications on a patient’s behalf.
Provider logos are banned from credit card marketing materials, making it clearer the card isn’t affiliated with the doctor or hospital.
Providers can’t charge these cards for services covered by Medicaid.
Kelmar, who’s collecting stories from patients, says it’s a step forward — and a pretty unlikely one, given that Synchrony Financial, which operates CareCredit, is based in Stamford, CT.
Apizza, anyone?
A law from 2022 is making a real difference for seniors
A new study in JAMA finds that legislation capping out-of-pocket prescription costs for seniors has helped many stay on top of their medications.
And, as Undark explains, those good results may be only the beginning. The law was only beginning to phase in during 2024; the full out-of-pocket cap took effect in 2025, and the study’s authors expect even stronger results to follow.
The Trump administration has announced that it will significantly expand access to so-called catastrophic health insurance plans, which are policies with comparatively low monthly premiums but deductibles so high they often leave families effectively uninsured until a medical crisis strikes. CMS described the move as giving Americans “flexibility” and improving access to “affordable healthcare coverage.” But what I call them are “junk plans”.
Back in October, I warned that these plans (often called short-term, limited-duration insurance plans, or STLDIs) were poised for a comeback as enhanced Affordable Care Act subsidies expired and millions of Americans faced sharp premium increases. Well, now these plans are, in fact, a reality.
The Affordable Care Act outlawed most of these junk-style plans because the law requires insurers to cover health care services people need, including prescription drugs, hospitalization, mental health care and maternity care. The ACA also forced insurers to spend most premium dollars on medical care instead of executive compensation, advertising and shareholder returns.
But the ACA never fully solved the deeper affordability crisis in American health care. Premiums have steadily become much too high. Deductibles and other out-of-pocket requirements have put care out of reach for millions as insurers have continued to shift more costs onto patients while simultaneously becoming larger, more powerful and more profitable. The shortcomings of the ACA and the decisions by the President and congressional Republicans have created the perfect opening for catastrophic plans to return.
Affordability’s all the buzz, but Trump’s sweeping payment rule emphasizes consumer choice over cost control.
When families are staring at monthly premiums they can no longer afford, a cheaper option — even one loaded with massive deductibles and coverage gaps — starts looking attractive. That is exactly what insurers are counting on.
In my old job at Cigna, I helped market plans like these. In my book Deadly Spin, I called them what they often really are: “the illusion of coverage.” These policies were designed to look like insurance while minimizing the likelihood insurers would actually have to pay significant claims. Companies like UnitedHealth Group and other insurance and health care conglomerates make enormous profits on catastrophic-style plans because the deductibles are so high and the restrictions so extensive that relatively few claims ever get paid.
Supporters of these plans frame them as “consumer choice.” But choice is a misleading word when many Americans are being financially cornered into skimpier coverage because comprehensive insurance has become unaffordable. People do not think they will get cancer before it happens. No one expects a devasting car crash or for their kid to come down with a confusing illness. The danger with junk plans is that people undoubtedly only discover how weak their coverage is after their lives have already been turned upside down.
And so, both parties in Washington deserve criticism. Republicans are now openly expanding access to catastrophic-style plans. But Democrats also bear responsibility for defending a post-ACA system that still leaves millions of Americans underinsured and financially exposed. Expanding coverage was enormously important. But coverage alone is not enough if using that coverage can still bankrupt you. We need a comprehensive update to the consumer protections in the ACA – expanding junk insurance is not that – and Republicans know better.
The real danger now is that America slowly normalizes a health care system where people are expected to carry insurance cards that offer little meaningful protection until disaster strikes. Once that becomes acceptable, legitimate insurance and junk insurance become indistinguishable.
HENRY KOTULA 