Tag Archives: Health

Medicare Advantage Insurers Face Pennies in Penalties as Seniors Face Delays and Denials

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Even as CMS documents improper denials, ghost networks and unlawful out-of-pocket charges, enforcement remains weak with just $3 million in fines levied in early 2025 against billion-dollar insurers.

Enrolling in Traditional Medicare means paying more upfront to protect against catastrophic costs because Traditional Medicare lacks an out-of-pocket cap, but in return, you get the care your treating physicians recommend you need. In stark contrast, enrolling in Medicare Advantage typically means allowing a for-profit insurer to second-guess your treating physician and inappropriately delay or deny the care you need, forcing you to gamble with your health and, sometimes, your life. What’s worse is that our federal government is rarely willing or able to punish Medicare Advantage insurers for their bad acts. Consequently, Medicare Advantage insurers too often can get away with restricting access to specialists and specialty hospitals and not covering the treatments their enrollees are entitled to.

Penalties on Medicare Advantage insurers that deprive their enrollees of the care they need are few and far between. In the first four months of 2025, the Trump administration imposed more penalties on the insurers in Medicare Advantage than they faced during the entire four years of the Biden administration. Still, it only imposed about $3 million in penalties, reports Rebecca Pifer Parduhn for HealthcareDive. That is tiny relative to the billions in profits of the big insurers.

Most of the penalties the Centers for Medicare & Medicaid Services (CMS) has imposed in the last few years for Medicare Advantage insurer violations are under $50,000. Penalties imposed were for serious offenses, including improper insurer delays and denials of care and insurers requiring people to spend more out of their own pockets than allowed under the law. Centene was hit with the largest penalty of $2 million for charging its enrollees above the out-of-pocket maximum permitted to be charged, in violation of 42 C.F.R. Part 422, Subpart C.

Molina received the second largest penalty of just over $285,000 for its failure to comply with prescription drug coverage requirements. CMS said that Molina’s failure was “systemic and adversely affected, or had the substantial likelihood of adversely affecting, enrollees because the enrollees experienced delayed access to medications, paid out-of-pocket costs for medications, or never received medications.” It’s hard to believe that Molina didn’t substantially benefit financially from its violations even after paying the $285,000 fine.

Susan Jaffe reports for KFF News that over a seven-year stretch between 2016 and 2022, CMS, under both Trump and Biden, did almost nothing to ensure network adequacy for Medicare Advantage enrollees. Moreover, it did very little to penalize the Medicare Advantage insurers CMS identified as operating Medicare Advantage plans with inadequate networks.

After KFF made a Freedom of Information Act request regarding enforcement actions against Medicare Advantage insurers with inadequate networks, CMS turned over just five letters to insurers regarding seven MA plans with inadequate provider networks. Given the widespread reporting of network inadequacy in Medicare Advantage, it’s inconceivable that only seven MA plans had inadequate networks. When questioned as to why CMS took action in so few instances, the agency explained that it is not overseeing all of the more than 3,000 Medicare Advantage plans but conducting “targeted” reviews of Medicare Advantage plan provider networks.

What’s clear is that CMS does not begin to have the resources to oversee more than 3,000 Medicare Advantage plans to ensure they are in compliance with their contractual obligations and delivering the care they are required to. As a result, Medicare Advantage enrollees are left unprotected. Too often, Medicare Advantage plans have “ghost networks,” networks that look good in the provider directory but turn out to include physicians who are out of network. These MA plans might not have enough primary care physicians, mental health providers, specialists, hospitals, nursing homes, rehab facilities or mental health professionals in their networks.

Technically, CMS can prevent insurers with inadequate networks from marketing their Medicare Advantage plans, freeze enrollment, fine them or even terminate the Medicare Advantage plans. But it never has. In its June 2024 report, the Medicare Payment Advisory Commission (MedPAC) wrote: “CMS has the authority to impose sanctions for noncompliance with network adequacy standards but has never done so.” CMS often doesn’t even let Medicare Advantage enrollees know about the inadequacy of the provider network or allow enrollees the ability to disenroll.

For CMS to oversee Medicare Advantage plans effectively and impose sanctions where appropriate it would need far more resources than it currently has. Moreover, penalties would likely need to be non-discretionary or they would be subject to political interference. In addition, to simplify the process and reduce costs, insurers likely would need to be required to offer the same network for all their Medicare Advantage plans in a given community.

Is HCA the Exception or the Rule?

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Is HCA the Exception or the Rule?

Last Tuesday, HCA, the largest investor-owned hospital system, released their Q4 2025 and year-end earnings and they’re impressive. The 190-hospital system reported:

  • Net income of $6.8 billion in 2025, a 17.8% increase year over year.
  • Revenue of $75.6 billion, a 7.1% increase year over year.
  • On a same facility basis, growth in revenue of 6.6%, equivalent admissions of 2.4% and net revenue per equivalent admission of 4.1% versus prior year.
  • For 2026, projected a net income between $6.5 billion and $7 billion and adjusted EBITDA between $15.6 and $16.5 billion on revenue between $76.5 billion and $80 billion.

CFO Mike Marks told the 16 analysts on the investor call “Consolidated adjusted EBITDA increased 12.1% over prior year, and we delivered a 90-basis point improvement in adjusted EBITDA margin. Cash flow from operations was $2.4 billion in the (4th) quarter and $12.6 billion for the year. This represents a 20% increase in operating cash flow in 2025 over full year 2024.”

And CEO Sam Hazen added “Let me add to just the whole resiliency agenda. This is not an episodic event for us. It just happens to be a maturation of what in my estimation is cultural within HCA, and that is being cost effective in finding ways to leverage scale, utilize best practices. Now we have tools… that are in front of us as opportunities to create even more consistency, efficiencies and transparency in the company’s overall cost. And that’s why the program is lining up in a well-timed manner with some of the enhanced premium tax credit challenges.

But we see this program continuing to mature. And as we get more capable at using these tools, it’s going to help us find even more opportunities. But this is not a onetime event. It’s a cultural dynamic in our company around being cost effective, being high quality and finding ways to improve from a process standpoint and a leverage standpoint with our overall scale.”

Shares of HCA closed at $488.27 last week, down from its peak at $527.55 (January27). Per MarketWatch, “shares of HCA Healthcare Inc rose $1.19% to $488.27 Friday on what proved to be an around grim trading session for the stock market, with the S&P Index falling 0.43% to 6939.03 and Dow (DJIA) falling 0.36% to 48,892.47. The stock demonstrated a mixed performance when compared to some of its competitors Friday, as Community Health Systems (CYH) rose 1.26% to $3.21 and Tenet (THC) fell 0.11% to $189.28.”

Hospital stock market analysts are keen to gauge how companies like these are navigating choppy waters for healthcare.  It’s understandable: Healthcare is one of the 11 sectors that comprises the overall S&P 500 and is 9.6% of its weighting. Historically, the healthcare index had beaten the S&P (30-year average 9% vs. 8% overall) but in recent years, it has lagged largely because regulatory policy changes and healthcare budget volatility dampened investor confidence.

Investors are increasingly hedging their bets in healthcare services reasoning even market bell-weathers like HCA face headwinds. And that sentiment has profound impact on operators in not-for-profit health sectors like community and rural hospitals, nursing and home care and ancillary services like EMS, hospice care and others that see their credit-worthiness slipping and costs for debt capital increasing.

My take

HCA is not an exception. It is culturally geared to the business of running hospitals and amassing scale in its markets vis a vis outpatient services and physician relationships. It follows a playbook geared to earnings per share and strategic deployment of capital to optimize its ROC, and it rewards its leaders accordingly. These are not unique to HCA.

And, like other systems, HCA is a lightning rod for critics. Studies have shown for-profit hospitals lean on staffing, aggressive on procurement, concerning to physicians and increasingly problematic to private insurers. Those same studies have shown quality of care to be comparable and charity care to be at or above same-market competitors. But this discipline also enables a higher price to cost ratio, a better payer mix and pruning of clinical services where margins are thin. Again, leverage in payer contracts and high pricing are not unique to the HCA playbook. Some not-for-profit systems have done the same or better.

What’s unique for each system like HCA are 1-the markets in which they enjoy leverage by virtue of scale and 2-the aggressiveness whereby they use their leverage. Ownership status—not for profit vs. investor-owned—matters in some markets and organizations more than others. But market dominance by any system, and how it’s leveraged, is a differentiator.

Case in point: In Asheville NC, HCA’s Mission Health dominates. HCA paid $1.5 billion for the legacy Mission-St. Joseph’s system in 2019. Despite, difficult media coverage and 3 warnings from CMS about quality shortcomings, it’s profitable.

On December 10, 2025, I had quadruple by-pass surgery there. Over the course 2 ED visits in November, the 5-day inpatient stay and post-surgical interactions since, I had the opportunity to see its operations firsthand. The bottom line for me is this: HCA Healthcare is a successful business. It operates Mission aggressively and profitably. Every employee knows it. Staffing is lean. There are no frills. Coordination of care is a crap shoot: connectivity between offices, services, and physicians is limited; price transparency is a joke and care navigation for patients like me is haphazard.  But all say patient care is not compromised as my surgical experience confirmed. Every hospital aspires for the same. All are trying to do more with less.

HCA’s financial success is not the exception in acute care, but it’s certain to draw attention to business practices that enable results like it enjoyed last year across the spectrum of hospital care. And it’s certain to intensify competition between hospitals to get the upper hand.

References in addition to citations in the sections that follow:

HCA faces up to $1.4B hit from ACA, Medicaid headwinds Beckers January 27, 2026 https://www.beckershospitalreview.com/finance/why-hca-says-it-can-navigate-2026-policy-uncertainty

3 healthcare threats that will soon become a crisis too big to solve

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https://www.linkedin.com/pulse/3-healthcare-threats-soon-become-crisis-too-big-solve-pearl-m-d–tfuvc/

Most industries enjoy a luxury that U.S. healthcare does not. In professional services, retail, logistics and software, leaders can respond quickly when conditions change. Companies can shrink or expand the workforce, adopt innovative technologies or reconfigure operations within months.

Healthcare lacks that flexibility. Training new physicians takes a decade, making it difficult to adjust workforce supply to meet changing demand. And unlike other industries, hospitals cannot rapidly cut services or reduce capacity. In fact, most clinical service changes require regulatory approval, turning cost reduction into a multiyear process.

With timelines like these, course correction in healthcare is inherently slow. Problems that might have been manageable persist. And by the time leaders act, threats frequently become too large to reverse.

Three of the nation’s most pressing healthcare problems now face this reality:

Threat 1: The affordability cliff

Over the past 25 years, the nation’s total healthcare spending has climbed from $2 trillion to $5.3 trillion.

Businesses and the government have played “hot potato” in response to these rising costs. Employers slowed wage growth and switched to high-deductible health plans to offset ever-higher premiums. In parallel, Medicare and Medicaid set payment increases below the rising cost of delivering care, driving hospitals and physicians to make up the difference through higher charges in the private market.

The financial impact on families has been devastating. With healthcare costs rising faster than wages, half of Americans say they cannot afford their out-of-pocket expenses should they experienced a major illness.

For businesses, the government and families, these financial challenges are mounting with no relief in sight. In 2024, U.S. medical costs rose more than 7% for the second consecutive year, pushing healthcare’s share of the economy to roughly 18%. Out-of-pocket spending by consumers climbed 7.2%, exceeding $500 billion, as demand for hospital care, prescription drugs and physician services outpaced insurer projections. Moreover, insurance premiums are projected to rise by roughly 9% this year.

Congressional action (and inaction) is amplifying these pressures. The expiration of enhanced subsidies on the insurance exchanges is driving double- and even triple-digit percentage premium increases for roughly 20 million enrollees. And beginning this year, another 8 to 10 million Americans could lose Medicaid coverage as new eligibility restrictions take effect.

Absent major intervention, healthcare spending is projected to exceed $7 trillion by the end of the decade, consuming more than one-fifth of the U.S. economy. At that point, small businesses will have dropped coverage for millions of employees, and a growing share of federal spending will be diverted to interest payments on the national debt, squeezing Medicare, Medicaid and other healthcare programs as demand for medical care rises.

As long as the economy stays strong, businesses and policymakers will respond with incremental changes that dull the pain but fail to address the cause. Consequently, when the next recession begins (perhaps sooner than later, according to historical analyses), the economic crisis will become so large that solutions dependent on improving patients’ health will be too small and take too long to succeed. That brings up the second major challenge.

Threat 2: The chronic disease epidemic

Since the final decade of the 21st century, the United States has experienced a sustained and worsening epidemic of chronic disease.

According to the Centers for Disease Control and Prevention, roughly 194 million U.S. adults now live with at least one chronic condition. About 130 million report multiple chronic diseases.

You might assume that if the healthcare system could prevent younger generations from developing these conditions, total costs would fall. But prevention alone cannot offset the cumulative burden of chronic disease already embedded in the American population.

To understand why, consider a single condition: diabetes.

A patient newly diagnosed with diabetes can usually control it and avoid serious, costly complications through lifestyle changes and relatively low-cost medications.

But when diabetes remains poorly controlled for a decade, biological damage accumulates. Each year, the risk of kidney failure or heart attack rises significantly. As a result, the cost of caring for a single patient with long-standing diabetes outweighs the savings that result from preventing diabetes in multiple newly diagnosed patients.

The math: On average, people with diabetes incur medical costs about 2.6 times higher than those without the disease (around $25,000 more per patient each year).

But when diabetes progresses to kidney failure, spending jumps into an entirely different category. Medicare costs for one patient’s hemodialysis treatment is approximately $100,000 annually. That’s not accounting for the cost of treating a patient’s likely cardiovascular disease, the leading cause of death among people with diabetes.

As such, to offset the medical care costs for a patient with a history of diabetes, our nation would need to prevent four new cases.

Add all these pieces together and diabetes alone accounts for more than $300 billion in direct medical costs each year, plus another $100 billion in indirect costs from disability and lost productivity.

Furthermore, effective chronic disease control requires large upfront investment, while the financial returns arrive years later. Act now, and the returns will be substantial. Based on CDC estimates, better prevention and control of chronic disease could avert up to half of all heart attacks, strokes, cancers and kidney failures, reducing national healthcare spending by $1 to $1.5 trillion each year. But if policymakers wait (while healthcare spending rises 7% or more annually), by the time they confront the crisis, they won’t be able to proceed financially since the required investment will be far more expensive than the payoff, at least in the short run.

Finally, if the U.S, wants to effectively prevent and control chronic disease as the means to reduce healthcare costs, there’s a third challenge our nation will need to address.

Threat 3: Training doctors for the wrong future

Ask medical leaders what they view as the greatest threat to high-quality care in the United States, and most will point to the growing physician shortage.

The Association of American Medical Colleges projects a shortfall of up to 86,000 physicians by 2036, with nearly half of that deficit in primary care. But those projections rest on a false assumption: the way doctors deliver care will be the same in 2036 as it is today.

If the United States has any hope of containing healthcare costs and reversing the chronic disease epidemic, it won’t happen by simply training more physicians.

Instead, countering those threats will require a transformation in how care is delivered. And generative AI will play a central role. But how?

Today, advances in medical knowledge allow physicians to effectively follow well-defined, evidence-based pathways for managing chronic disease in all but the most complex cases. As a result, most routine management tasks (monitoring, medication adjustments and decision support) are primed for generative AI. This transition has already begun.

A San Francisco startup, Mercor, recently earned a $10 billion valuation after recruiting more than 30,000 clinicians to help train AI systems to perform specialized medical tasks. Meanwhile, Utah just became the first state to launch a pilot allowing an AI system to renew prescriptions for 250 commonly used, non-controlled medications under physician oversight.

The implications for medical practice are clear. We can expect that generative AI will take on more routine chronic disease management, leaving primary care physicians more time to focus on complex clinical tasks. With AI support, they will increasingly care for patients who today are referred to specialists.

Specialists, in turn, will spend less time on evaluation and follow-up visits and more time performing procedures and advanced interventions that require human judgment and technical skill.

The combination of healthier patients and the redistribution of work (enabled by generative AI) will ease the physician-shortage problem. To prepare for this outcome, medical schools and residency programs will need to quickly integrate generative AI into every aspect of training. If not, physicians in many specialties will find themselves trained for the roles of the past, not the skills they will require a decade from now.

When Systems Fail, They Fail Together

When chronic disease becomes widespread and clinicians are overwhelmed, America’s health deteriorates, complications ensue and healthcare costs surge.

When chronic disease is managed effectively, the opposite occurs: hospitalizations fall, costly complications become rarer and the demand for specialty care declines.

For decades, healthcare has consumed an ever-larger share of GDP, while clinicians practiced medicine much as their mentors have for generations.

That era is ending. With costs accelerating and incremental fixes exhausted, healthcare is approaching a breaking point. Act aggressively, now, and the nation can prevent and better control chronic disease, avert hundreds of thousands of heart attacks, strokes and kidney failures, and flatten healthcare inflation.

By contrast, wait another decade and there will be no way to rein in spending or chronic disease. And if workforce adaptation is delayed, as many as 30% of physicians will find themselves trained for a version of medicine that no longer exists.

We still have a choice, but the clock is ticking.

The Misleading Chart That Killed the ACA Subsidies

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GOP leaders cited data from a Trump-aligned think tank to argue the ACA is “unaffordable”. Health economists say the numbers were spun and the full story tells the opposite.

In December, when Capitol Hill was consumed by a debate over whether to extend the subsidies that had held down premiums for individual health insurance under the Affordable Care Act since the COVID-19 crisis, Senate Majority Leader John Thune took to the floor to make his case against any extension.

“Obamacare has utterly failed to control health care costs,” argued the South Dakota Republican, who also claimed the government-backed health plan is riddled with what he called “waste, fraud and abuse.” As Thune spoke, he stood before a supersized chart that he said clinched the case for ending the subsidies.

“This graph illustrates that, and it understates the problem,” the GOP leader said, pointing to the chart where a red line symbolizing the costs of ACA insurance jutted skyward. It made a case that since 2014 the premiums for Obamacare coverage have not just outstripped inflation but have increased more than double the rate of employer-based health plans.

In the days that followed, Thune’s GOP caucus held the line and successfully resisted a Democratic push to save the subsidies, even as many of their constituents were getting notices in the mail that their ACA-plan premiums for 2026 would increase sharply – doubling, or more, in some cases.

But some health care experts who looked at the large chart that was so central to Thune’s argument said they could not disagree more with the senator’s claim of an Obamacare affordability crisis. They note that while there was indeed a spike in ACA premium costs in 2017 and 2018 – largely the result of political decisions made by Thune’s fellow Republicans – in the years from 2019 through 2025 the ACA increases were actually lower than in employer-based insurance.

“This is being used as evidence that the individual market is, in some way, particularly inefficient – and I just don’t think there’s any reason for that,” said Matthew Fiedler, senior fellow at the Center for Health Policy at the Brookings Institute. He added: “There has been research that has compared individual-market to employer-market premiums. And what it actually finds is that individual-market premiums” – those offered under ACA – “seem to be a little bit lower than employer-market premiums.”

Thune wasn’t the only top Republican who offered the questionable statistics as a central argument for ending the Obamacare subsidies. House Speaker Mike Johnson tweeted out the same chart on the social-media site X on Dec. 15, lashing out at what he dubbed “the Unaffordable Care Act.”

But where did top Republicans get their arguably misleading information? The answer can be found in the small logo at the top of the controversial chart – that of a small and, until recently, fairly obscure Trump-aligned policy think tank called the Paragon Health Institute. It is led by Brian Blase, who was a member of Trump’s National Economic Council during the president’s first term.

Just a few years old, Paragon under Blase has positioned itself as the leading voice for a Trump-led health care overhaul that has promoted the belief that ACA-supported health insurance is both riddled with fraud and wildly inefficient for taxpayers. And its latest chart on ACA costs isn’t the first time Paragon has been accused of pushing misleading statistics to make its case.

In August, Blase and Paragon claimed that Obamacare is overrun with “phantom enrollees” – insisting that millions of ACA enrollees who’d filed no insurance claims was evidence that unscrupulous brokers had profited by signing up people without their knowledge. But Paragon’s report, which also was cited repeatedly by Republicans seeking to block the extended subsidies, was blasted by groups such as the American Hospital Association.

An AHA vice president, Aaron Wesolowski, wrote in a blog post “that Paragon developed these allegations using inaccurate data, dubious assumptions, and an apparent lack of understanding of how health insurance actually works.” He and other experts explained that while there was a real problem with 200,000 of the more than 25 million people who had signed up for coverage in the ACA marketplace, the vast number of zero-claims patients were not “phantoms” but young people who didn’t see a doctor, people who were only in Obamacare plans for months before getting a new job, or plan-switchers who were double-counted.

The story of Paragon is the health care version of a much bigger story that anyone who’s followed American politics over the last decade will recognize: How misinformation and distortions are amplified in a media and social media ecosystem.

Andrew Sprung, a health care writer who picked apart the Paragon chart on ACA costs in his Substack newsletter, said this type of propaganda “goes straight onto Fox News and into the mouth of Trump allies who deter the Republicans from cutting a deal” that might save the Obamacare subsidies and thus make health coverage more affordable for middle-class families, including their own constituents.

To Sprung and other health watchdogs, the statistical jiu-jitsu that Paragon performed in its analysis of ACA premiums versus employer-based plans is typical of how it helps ultra-conservatives win the PR wars against publicly supported health care in America. The spin helps leaders like Thune and Johnson keep their more moderate members in line.

In fact, Thune, again citing Paragon statistics, noted in his Senate floor speech that if you extend the chart back to 2013, Obamacare premiums appear to have risen some 221% – before he quickly acknowledged that this number is skewed by the difficulties insurers faced in setting rates in the first year of open enrollment.

But health care analysts note that other factors – most of them tied to Republican hostility toward any type of public health care – fundamentally undercut the argument from Paragon and its allies on Capitol Hill that Obamacare is a failure because inflation is baked into the program.

In a post headlined “Lies, damned lies, statistics, and Republican talking points about the ACA,” Sprung notes that the first spike in ACA premiums occurred in 2017 because a three-year, federally funded reinsurance program included in the original 2010 law had expired and insurers recalculated their costs based on a risk pool that was older and sicker than anticipated. As a result, premiums in the benchmark Silver plans under the ACA rose that year by 20%.

But that didn’t end the turmoil for Obamacare, because when Trump took office in 2017 and – with Blase in the White House as a policy adviser – Republicans pushed hard to repeal the ACA. That didn’t happen, of course, but the new administration did make changes like shortening the enrollment period and scaling back recruitment and marketing, as well as reducing cost-sharing payments to insurers.

The chaos the changes caused spooked insurers, who raised premiums a second time in 2018, by an average of 34%. But the failure of the ACA repeal effort in the Senate that same year ushered in a period of stability in which – contrary to Paragon’s argument about the inefficiency of Obamacare – ACA premiums actually outperformed health plans offered by employers. Sprung cited government statistics that premiums for individual plans rose from 2018-23 by 13%, compared to 29% for employer plans.

Brookings’ Fiedler agreed. “You’ll see there’s this period where premiums are actually declining in the individual market,” he said, noting that not only did insurers overshoot with the Obamacare premium hikes of the mid-2010s but that the enhanced subsidies that began under COVID-19 brought in younger, healthier enrollees while encouraging increased competition for new customers.

None of the non-fiction narrative around what has really happened in the marketplace since the passage of Obamacare supports the GOP’s core argument that health care backed by the ACA is riddled with “waste, fraud and abuse.” Instead, Paragon looks to be spinning its own storyline that is to the liking of its donors, like the billionaire libertarians of the Koch family, which supported the think tank in 2021 with a $2 million donation from the aligned organization, Stand Together. Groups aligned with Leonard Leo, the former Federalist Society officer who was the architect of the right-wing takeover of the Supreme Court, have also donated.

The failure by Congress to extend the ACA subsidies ahead of their expiration shows that the right’s deceptive spin-doctoring is working, for now.

That zeitgeist may change once the voodoo economics of a misleading line chart is swamped by the tide of horror stories about soaring out-of-pocket costs for regular folks who can no longer afford the care they need.

How much will TrumpRx really cut down your drug costs?

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How much will TrumpRx really cut down your drug costs?

President Trump on Thursday unveiled his lower-cost drug platform TrumpRx, touting it as “one of the most transformative health care initiatives of all time.”

“This launch represents the largest reduction in prescription drug prices in history by many, many times,” he added. 

But health policy experts and consumer advocates are skeptical about how many people will benefit, and how significant the deals are. 

The platform features coupons for 43 drugs, ranging from 33 to 93 percent off the list price and treating conditions for obesity, respiratory illnesses, infertility, bladder issues and menopause.

Several observers were quick to note that the advertised prices achievable with the coupons were still higher than the prices one might pay with insurance coverage. 

“If you have insurance, your out-of-pocket costs are probably going to be less than the discounted list price that’s being advertised on TrumpRX,” Juliette Cubanski, deputy director of the Program on Medicare Policy at KFF, told The Hill.  

“For people who are looking at this website and maybe they recognize a drug that they take, they really need to understand how their out-of-pocket cost under insurance would compare to the TrumpRx price.” 

Cubanski noted, however, that some of the medications on TrumpRx aren’t well covered by insurance — such as weight loss and in vitro fertilization drugs, meaning a wider swathe of Americans may find savings on TrumpRx. 

“It’s a valuable effort for some medications, for some people, and I think especially people who don’t have good coverage of some of these medications,” she said. 

Notably, the offerings on TrumpRx are all branded versions of the drugs sold directly by drugmakers who’ve entered “most favored nation” (MFN) pricing agreements with the Trump administration. 

Many of the medications listed on the website have generic alternatives available on the market at significantly lower prices. 

Protonix, a branded medication made by Pfizer that reduces stomach acid, is advertised as having a 55 percent discount on TrumpRx, taking the medication from $447.28 to $200.10 for 30 tablets at a strength of 20 mg. 

But according to GoodRx, its generic equivalent, pantoprazole, can be bought for $10.47 for the same number of tablets at the same dosage with the coupon it offers. Without the coupon, the cost is estimated at just less than $80. 

Another Pfizer product, Tikosyn, for an irregular heartbeat, is shown to have a 50 percent discounted price of $336 for 60 0.125 mg capsules. Generic Tikosyn, dofetilide, is shown to be available for $23.06 on GoodRx with a standard coupon, signifying a 94 percent discount from the $373.96 cost. 

Generics currently make up the majority of prescription medications taken in the U.S., with the Food and Drug Administration estimating in 2023 that 91 percent of prescriptions are filled as generics. 

Anthony Wright, executive director of FamiliesUSA, a nonpartisan consumer health advocacy group, dismissed TrumpRx as a “trumped-up catalog of coupons.” 

“This is not actually lowering drug prices. It steers consumers to the existing drug company programs for uninsured patients that have been around for a while,” said Wright. “This is pretty limited in terms of both who it effects, what drugs it offers and what the benefits are, especially compared to what already existed previously.” 

Ashish Jha, who served as the Biden administration’s White House COVID-19 response coordinator, did not share that skepticism. He called TrumpRx a “good thing” that “is going to be really, really helpful for people who don’t have health insurance” in remarks to The Hill’s sister network NewsNation.

TrumpRx.gov explicitly states that people on government health plans such as Medicaid are ineligible to use the coupons. 

The prohibition on federal health plan enrollees from using TrumpRx coupons likely has to do with the anti-kickback statute in the U.S., which criminalizes willfully offering or exchanging anything of value for reimbursable items through federal programs like Medicaid. 

The Hill has reached out to the Trump administration for clarity on whether all private health insurance enrollees can use TrumpRx coupons. 

But even if this cohort can access the coupons, the scope of TrumpRx appears to be “quite limited in scale,” according to Yunan Ji, assistant professor of strategy at Georgetown’s McDonough School of Business.

“It really only applies to cash-pay patients. So, just considering the scale is cash-pay patients we’re thinking about, you know, a percent of the uninsured, plus some of the people who may be underinsured because their insurance coverage may be limited, but the scope is quite limited at the moment,” she said. 

Roughly 8 percent of the U.S. is uninsured, and with its current offering of just 43 drugs, TrumpRx currently stands to benefit a small subset of that population. Administration officials said more medication would be added in the coming weeks. 

“The thing about MFN in general — so this is interesting, because MFN is something I teach my MBA students — is that actually, in the long run, it actually puts upward pricing pressure,” said Ji.

Trump’s signature drug price policy requires countries to sell drugs in the U.S. at least as cheaply as they are offered in other countries. 

When companies are aware that their clients, like the U.S., are expecting MFN pricing, they may set their initial launch prices of new drugs at an elevated level, Ji said. Another outcome of MFN pricing could be that drug launches in other countries with strict pricing regulations will be delayed.

Trump acknowledged the global impact that his MFN pricing policy could have on other countries when announcing the launch of TrumpRx. 

“Drug prices in other nations will go up by doing this, they had to agree,” he said. “In many cases, the drug costs will go up by double and even triple for them, but they’re going way down for the United States.” 

Trump administration pressed on details of drug price deals

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https://www.axios.com/2026/02/03/trump-drug-price-deals-pfizer-eli-lilly

The Trump administration is facing new pressure to disclose details about its confidential pricing agreements with big drug companies and whether they meaningfully lower costs for patients.

Why it matters: 

President Trump has touted the “most favored nation” drug pricing deals as one of his signature accomplishments, but most of the details have been kept under wraps, including how the new prices are calculated.

Driving the news: 

The advocacy group Public Citizen filed a Freedom of Information Act suit last week, seeking the text of the deals the administration struck with Eli Lilly and Pfizer.

  • Those and other agreements were touted in high-profile Oval Office ceremonies as a step toward lowering U.S. drug prices and aligning them with what’s paid in other developed countries.
  • The deals have been described in broad terms, but questions remain about basic matters like what exactly the companies agreed to.
  • The administration is “shaking hands with pharma CEOs and telling us they fixed drug pricing and then not disclosing any text,” said Peter Maybarduk, access to medicines director at Public Citizen. “It makes it hard to believe, makes it hard to understand, makes it hard to assess.”

Congressional Democrats also wrote to Pfizer, Eli Lilly, AstraZeneca and Novo Nordisk in December asking for details of their respective agreements.

  • The letter to Pfizer said the company and the administration seem to be “attempting to shield themselves from oversight, accountability, and specifics that could inform consumers about whether this agreement will save money.”
  • An administration official said: “Because the drug pricing agreements contain confidential, proprietary and commercially sensitive information, they will not be released publicly.”
  • None of the four companies provided more details when asked about the agreements. A Novo Nordisk spokesperson said “this agreement will bring semaglutide medicines to more American patients at a lower cost,” referring to the active ingredient in its blockbuster weight-loss drugs.

Between the lines: 

The deals would for the most part not lower existing drug prices for a huge segment of the public that gets coverage through Medicare or workplace insurance.

  • Instead, the most-favored nation prices would apply to Medicaid. One unanswered question is how much lower would those prices be, since drugmakers already are required to have low prices for Medicaid.
  • The deals also anticipate most-favored nation prices for newly launched drugs in future years. But it’s not fully clear how that would work, since drugs are usually launched in the United States first and there wouldn’t yet be prices abroad to use as a comparison.
  • There would also be discounted drugs sold through the government’s direct-to-consumer website TrumpRx. But the portal is built around cash purchases, which many cannot afford.

The big picture: 

Trump has railed against what he calls “global freeloading” and ending the way the U.S. pays more for drugs than other developed countries. But policy experts have questioned whether manufacturers will only meet him halfway, raising prices abroad without cutting them in the U.S.

  • “You can kind of see why the pharmaceutical industry wouldn’t be so opposed if what they end up getting is maybe a slightly lower price in the U.S. and higher prices in other countries,” said Juliette Cubanski, deputy director of the Program on Medicare Policy at KFF.
  • The Trump administration has also proposed new payment models to incorporate most-favored nation pricing into Medicare, which would lead to savings.
  • But the changes are tests that would only apply in certain geographic areas, and analysts say they would not have a drastic impact on Medicare spending.

The bottom line: 

Maybarduk, of Public Citizen, acknowledged that the goals of the drug pricing efforts are laudable, even if the practical effects remain unclear.

  • “The thing that we agree with here, of course, is that Americans pay too much for drugs, and we pay more than other countries for drugs.”

What is “Medically Necessary”?

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https://healthcareuncovered.substack.com/p/what-is-medically-necessary?utm_source=post-email-title&publication_id=255152&post_id=185846351&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

How Big Health Insurers hijacked a medical term and built a denial machine around it.

We hear the term “medically necessary” used every day by insurance companies as a reason to deny or delay health care. While doctors were hard at work treating patients, insurers quietly co-opted the term, and that’s causing serious problems now.

If you ask most doctors to define ‘medically necessary,’ you’ll get some version of: “The test, therapy, drug or procedure that will do the best job of treating my patient.” It’s that simple: whatever is best for my patient.

If you ask an insurer, you may get some legal definition about care “provided for the cure or relief of a health condition, illness, injury or disease (looks good so far, but wait there’s more!), and is not for experimental, investigational or cosmetic purposes and is necessary for and appropriate to the….” The problem begins with the meaning of “necessary and appropriate.”

The terms ‘necessary’ and ‘appropriate’ are left to interpretation. My doctor may feel that a certain test or medication is necessary and appropriate, but someone else may disagree. So how do insurers resolve that disagreement? This is where things go off the rails.

They resolve it by having a medical director they employ review what my doctor wants for me – and that medical director becomes the sole arbiter of what care I can have that will be covered by my health plan. That medical director can sign off on a denial of a claim or a request, and many times they justify that denial by saying the treatment isn’t medically necessary – for reasons that are entirely defined by the health plan.

It seems a clear conflict of interest when an anonymous medical director – possibly lacking in both expertise and experience – rejects a course of treatment laid out by a physician specializing in that disease or condition who has a history with that particular patient. But it happens all the time.

These medical directors work for the company that is denying the claim or request. They have been granted stock and stock options in that company. Their bonus is tied to the financial performance of the company. To say they are impartial and doing what is best for the patient is laughable at best.

Frequently, these medical directors are reviewing requests in areas outside their specialty. In addition, they make these determinations without ever seeing the patient, or reviewing the medical records, studies or lab results that led the treating physician to make the recommendation in the first place. An investigation by ProPublica found that Cigna medical directors were signing off on denials once every 1.2 seconds. This isn’t clinical review; this is profit enhancement.

This brings us to another problem: “coverage policies.” Insurance corporations have created a whole library of coverage policies, and they differ from health plan to health plan. If you’ve never read one of these coverage policies let me save you some time and trouble. Get up now and place your head between the door and the door jam. Now slam the door. You just achieved the headache and confusion that reading a long coverage policy would give you in a fraction of the time. You’re welcome.

Even if you read the policy and think it’s got you covered, you still aren’t home free. A medical director can overrule the policy and still deny the care. Also, that coverage policy may be different for each health plan, and they change from time to time. I am struck by this basic question: Why should the care you receive depend on the insurance card in your wallet and not your clinical situation? The answer, of course, is because that’s how the insurance companies want it.

So, what do we do about this? Let me give you two relatively easy solutions.

First, follow a coverage policy.

If only there was a group of doctors that represented every specialty, we could get them to meet and determine universal coverage policies that could be mandated for all health insurance, both government and commercial. Wouldn’t that be nice? Doctors could then provide good care to patients without having to figure out a library of different coverage policies. Wait, a group like that does exist. It’s called the RUC.

The RUC (Relative Value Scale Update Committee) is an American Medical Association specialty panel, a volunteer group of 32 physicians and over 300 physician advisors who represent every medical specialty. The committee evaluates thousands of individual services across the medical spectrum. Why don’t we ask them to develop a universal set of clinical coverage policies?

Second, fix the denial system. Pass a law that says whenever an insurer denies payment or a request for care, that denial must be signed by a medical doctor, and signing that denial qualifies as “the practice of medicine.” This would make those denials and the doctor who signed off on them subject to all the responsibilities and accountabilities required to practice medicine.

This includes:

  • having an active license in the state where the patient is seeking care; practicing within your specialty;
  • documenting your decision-making in the patient’s medical record, including the information you reviewed to come to your decision; and
  • being liable for malpractice if your decision causes harm to the patient and is not clinically justified.

Let’s assume we had this in place right now and applied it to a real-world situation: the GLP-1 coverage debate. When these glucagon-like peptide-1 drugs for diabetes and weight loss came to market they would have gone before the RUC for a clinical coverage policy. Let’s say the RUC determines that the drugs should be covered for individuals with a BMI over 30 who have tried and failed other diet programs, or for people with a BMI between 25 and 30 who have significant cardiac risk or are diabetic.

Now we have a universal coverage guideline. The doctors prescribing the drug have a very clear understanding of who will be covered and when, and it would apply to all patients regardless of which insurance company they had. As long as the prescribing physician stays inside the guidelines, no denials would be expected.

Let’s take an example from the flip side. A doctor wants to prescribe an expensive chemotherapy regimen to an elderly patient with cancer. The insurer could have that request reviewed and possibly denied by a medical director. However, that medical director would need to be an oncologist with a valid license in the state where the patient is getting treatment. If that oncologist reviews the patient information, denies the chemotherapy for valid clinical reasons, and documents those reasons in the patient’s chart, then the insurer can deny the request.

These two changes would eliminate so many problems, improve the lives of doctors, improve the lives of patients, and reduce administrative costs.

So why hasn’t this been done already? Well the one thing these changes would not do is increase the stock prices of insurance companies.

To put it more succinctly, it’s profits over patients. That’s why.

Senate Judiciary: UnitedHealth Turned Medicare Advantage Risk Adjustment Into a Profit Engine

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https://healthcareuncovered.substack.com/p/senate-judiciary-unitedhealth-turned?utm_source=post-email-title&publication_id=255152&post_id=186238639&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

A new report from the Republican-led Senate Judiciary Committee describes how UnitedHealth Group has turned a safeguard for sick patients in the Medicare Advantage program into a profit-making strategy.

The report, How UnitedHealth Group Puts the Risk in Medicare Advantage Risk Adjustment, details how Medicare Advantage (MA) payments (seemingly designed to compensate health insurers more for enrolling patients with greater health needs) have increasingly rewarded insurers with the resources, data and scale to capture and maximize diagnosis codes. According to the committee, UnitedHealth Group has leveraged its size, vertical integration and advanced data and AI capabilities to consistently stay ahead of efforts by the Centers for Medicare & Medicaid Services to curb excess payments tied to coding intensity.

Read the U.S. Senate Judiciary Committee’s How UnitedHealth Group Puts the Risk in Medicare Advantage Risk Adjustment here.

After reviewing more than 50,000 pages of internal UnitedHealth documents, Judiciary Committee investigators found that the company built a vast diagnosis-capture infrastructure that includes in-home health risk assessments, secondary chart reviews, “pay-for-coding” arrangements with providers, and tightly controlled clinical workflows within UnitedHealth-aligned medical practices. These efforts, the report states, go well beyond neutral documentation and instead amount to an aggressive strategy to maximize risk scores and, by extension, federal payments.

The committee, chaired by Sen. Chuck Grassley, (R-Iowa), warns that even when CMS attempts to rein in abuse (such as excluding more than 2,000 diagnosis codes from the risk-adjustment model) UnitedHealth appears uniquely positioned to identify new, untapped diagnoses among the thousands that remain. Because UnitedHealth also sells its diagnostic criteria, coding tools and workforce to rival insurers, its strategies can quickly spread across the entire Medicare Advantage market.

The report concludes with this:

While Senator Grassley’s staff will continue to evaluate the information produced by UHG, this initial review has revealed how UHG has been able to profit from the way that CMS risk adjusts payments to MAOs. The investigation has also shown that risk adjustment in MA has become a business in itself—by no means should this be the case. MAOs should receive payments that are commensurate to the complexity and acuity of the Medicare beneficiaries that they insure, not their knowledge of coding rules and their ability to find new ways to expand inclusion criteria for diagnoses. Taxpayers and patients deserve accurate and clear-cut risk adjustment policies and processes.

But what makes these findings especially notable is who commissioned the investigation in the first place. Grassley was one of the original architects and longtime champions of Medicare Advantage when it was enacted back in 2003. In recent years, he now warns that the program’s “promise of efficiency and choice” has been undermined by vertical consolidation, blinded oversight and systemic risk-code gaming.

In past inquiries — spurred by reporting from outlets like The Wall Street Journal and findings from the Health & Human Services’ Office of Inspector General — he has demanded answers from UnitedHealth over the use of in-home assessments and chart reviews that allegedly drove billions of dollars in additional payments to the company.

Continuing the bipartisan scrutiny of MA insurers, CMS recently released its proposed payment rates for MA plans in 2027. Notably, CMS is proposing to exclude diagnosis codes added to a patient’s chart during chart reviews by AI or insurers from their risk score; something many reform advocates and I have long supported. These changes and this investigation are important steps in reining in the abuses by MA insurers and reason for hope we are on the right track.

If The House Votes for Senate-Approved Spending Package, PBM Reform Becomes Law

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https://healthcareuncovered.substack.com/p/if-the-house-votes-for-senate-approved?utm_source=post-email-title&publication_id=255152&post_id=186639784&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

As early as today, the House of Representatives is expected to vote on a government funding package (approved by the U.S. Senate last Friday) that includes long-sought reforms to pharmacy benefit managers (PBM) – pharmaceutical middlemen, the biggest of which are owned by just three health insurance conglomerates – that sit between patients and their prescriptions.

None of this happened over night. PBM reform – even in the health care advocacy world – has only recently become a bi-partisan, winning issue. PBMs were largely only known to pharmacists, other middlemen, health-policy wonks and the small but mighty circle of advocates who understood how they squeeze patients and independent pharmacies and funnel profits back to Big Insurance. PBMs began life as intermediaries meant to negotiate lower drug prices on behalf of consumers, but over time their role changed as they huge profit centers for insurers like UnitedHealth, Cigna and Aetna merged with or created their own PBMs – which now control more than 80% of the PBM business in the country.

This monopolistic-evolution captured the attention of policymakers and watchdogs after HEALTH CARE un-covered and reform advocates began to raise the alarm about PBM abuses and profiteering.

The need for PBM reform was one of the reasons I started the Lower Out-of-Pockets (LOOP NOW) Coalition, in 2021. Over the years, the LOOP NOW Coalition, along with its 100 partner organizations, have worked to educate lawmakers about how PBMs restrict access to life-saving medications and contribute to the U.S. medical debt crisis. The coalition has endorsed legislation to ban several PBM business practices, like spread pricing, and to force PBMs to be far more transparent, especially in their dealings with employers that offer health benefits to their workers. Our work also led to an invitation for me to testify at a meeting of the Department of Labor’s Advisory Council on Employee Welfare and Pension Benefit Plans (the ERISA Advisory Council) and to meet with the Federal Trade Commission regarding the vertical integration of big insurers and the need for PBM (and Medicare Advantage) reform.

Through the work of advocates on the ground, things began to shift. What was once a side quest among health-policy activists became something real in Washington because the issue is easy to understand: PBMs have become unneeded profit centers insurers erected between patients and the medicines their doctors say they need.

We came close to reining in the PBM industry in late 2024 when reforms were included in House Speaker Mike Johnson’s first spending package, but they were scrapped after Elon Musk complained about the size and scope of the legislation.. His Tweets prompted GOP leadership to strip out the PBM provisions, even though they had broad bipartisan support in Congress and were backed by many consumer advocates and independent pharmacists. But now, it seems like the PBM language in the current spending package is more locked in. Here’s what the bill will do:

  • Change how PBMs get paid in Medicare Part D by moving them away from percentage-based payments tied to high drug list prices and toward flat, transparent service fees — so PBMs no longer profit more when drug prices are higher.
  • Require CMS to define and enforce contract terms between PBMs and Medicare Part D plans, giving the agency real authority to police abusive or one-sided arrangements.
  • Increase transparency by allowing CMS to track how PBMs pay pharmacies and which pharmacies are included (or excluded) from PBM networks, so regulators can finally see payment patterns and network practices across the system.
  • Lock into law existing protections requiring plan sponsors and PBMs to contract with any pharmacy that agrees to their standard terms — as long as those terms are reasonable and relevant — instead of quietly steering business to preferred or affiliated pharmacies.

These are important reforms, although more are needed. We’ll keep you posted on PBM-related efforts not only on Capitol Hill but also at the Department of Labor and in the states.

The health care hiring boom is losing steam

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https://www.axios.com/2026/01/26/health-care-hiring-boom-job-growth-stalls?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

The health care job growth that’s powered the labor market since the COVID pandemic is stalling out.

Why it matters: 

Republican cuts to federal health programs, AI automation and rising costs are making health systems and other employers level off hiring — including for jobs requiring a professional license like nurses or physical therapists.

  • The results could widen gaps in care and exacerbate health disparities.

By the numbers: 

Health care employment drove most of the month-by-month job growth last year, increasing by an average of 34,000 jobs per month, according to the Bureau of Labor Statistics.

  • But that’s less than health care’s monthly average increase of 56,000 roles in 2024.

Health care hiring has essentially returned to a pre-pandemic pattern of slower growth after a post-COVID surge driven by returning patients and hospitals replacing burned-out workers, said Neale Mahoney, an economics professor at Stanford.

  • “It was only a question of when … and we’re starting to see it now,” Mahoney said.

Federal policy changes could further chill hiring.

  • Hospitals face financial pressure from the nearly $1 trillion cut to federal Medicaid spending in the GOP budget law. That’s combined with rising costs from treating more uninsured patients and other factors.
  • New caps on federal student loan borrowing could also push students away from clinical careers, many of which require pricey advanced degrees.
  • It wouldn’t be a surprise if a rise in deportations — combined with fewer foreign-born health workers opting to come to the U.S. on visas — dried up the pipeline of available help, especially in segments like home care.

Case in point: 

Alameda Health System, a safety-net provider based in Oakland, California, announced last month that it’s laying off 247 employees, including clinicians.

  • Administrators cited the system’s precarious finances: It expects to lose $100 million annually by 2030 as a result of the Medicaid cuts, per CBS San Fransisco.

AI automation is also pushing some providers to cut administrative staff.

  • Revere Health, the largest physician-owned health system in Utah, announced in September that it will lay off 177 employees, citing a partnership with a company that automates claims processing.
  • Clinical jobs in health care are more insulated from automation, and AI may actually help extend the clinical workforce where shortages exist.
  • Still, some clinicians are concerned. Almost 15,000 nurses in New York City went on strike this month, demanding new safeguards around AI use in hospitals, among other things.

What they’re saying: 

This past year represented “a repositioning of the labor market,” said Rick Gundling, chief mission impact officer at the Healthcare Financial Management Association.

  • Health systems are doing more targeted hiring, he said. They might look to downsize in revenue management but increase their clinical staff.

The intrigue: 

Demand for care is still high. The “silver tsunami” of aging Baby Boomers may keep jobs plentiful, said Laura Ullrich, director of economic research in North America at the Indeed Hiring Lab.

  • The U.S. is projected to be short some 100,000 health care workers by 2028, after all.
  • The question is whether the sector will remain near full employment, or whether circumstances will drive another surge.
  • “My opinion as an economist is that the tailwinds are stronger than the headwinds in health care,” she said.