Tag Archives: Healthcare

Hawley and Warren Introduce “Break Up Big Medicine Act” to Force Separation of Insurers, PBMs and Providers

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Bipartisan bill modeled on the 1933 Glass-Steagall Act would require health care conglomerates to divest vertically integrated subsidiaries.

Today, Senate ideological-opposites, Sen. Josh Hawley (R-Mo.) and Sen. Elizabeth Warren (D-Mass.), introduced the Break Up Big Medicine Act, a Glass Steagall Act for health care. From the right, Hawley has built a reputation as a populist critic of corporate exploiters. From the left, Warren has spent years hammering Wall Street and Big Tech for their grip on markets. Together, their new bill aims at the corporate, monopolistic conglomerates that now control much the U.S. health care system — particularly where Big Insurance and its subsidiaries blur the lines between health delivery and Wall Street calculations.

At its core, the legislation prevents common ownership of a medical provider organization and one or more of the following: an insurance company, pharmacy benefit manager (PBM), or a prescription drug or medical device wholesaler. The bill requires individuals who currently own, operate, or control both types of entities to divest from one category (either the provider organization or the insurer, PBM, or wholesaler) within one year of the bill’s enactment. Failure to do so would result in penalties and enforcement from the Federal Trade Commission.

Why “Glass-Steagall for Health”?

The original Glass-Steagall Act was enacted in June 1933 during the Franklin Roosevelt administration. Congress and Roosevelt believed it was imperative to break up the risky entanglement of commercial and investment banking, which contributed to the 1929 stock market crash that led to the Great Depression. Millions of Americans lost their life savings when thousands of banks failed and confidence in the country’s financial system collapsed. The Glass-Steagall Act helped separate banks from speculative securities operations, established the Federal Deposit Insurance Corporation (FDIC) to protect depositors and for decades served as a regulatory firewall that protected Americans’ savings.

In recent years, health insurers have morphed into Wall Street-controlled bank-like institutions that bear little resemblance to the nonprofit organizations most of them were just a few years ago. In fact, many of the country’s biggest health insurers are essentially financial institutions that also own a health insurance company.

Today’s major players are not just covering (and not covering) our health care costs — they are amassing profits across a sprawling set of subsidiaries that have mutated these health insurers into monopolistic corporations similar to the “trusts” Franklin Roosevelt’s cousin Teddy ordered broken up and to the vertically integrated banking titans of the 1920s.

For example:

  • UnitedHealth Group, owner of UnitedHealthcare (a health insurer), also owns Optum Bank (which has more HSA assets under management than any other financial institution), Optum Ventures, Change Healthcare, PBMs, speciality pharmacies, and over 2,000 medical provider organizations;
  • CVS Health operates both insurance products (through Aetna) and PBMs (through Caremark) and owns a major pharmacy retail chain that shapes prescription pricing and competition;
  • Cigna has been bringing in far more revenue from the pharmacy supply chain since it bought Express Scripts in 2018 than from its many health plans; and
  • Elevance, which operates Blue Cross plans in 14 states, also owns a PBM, clinical operations and, like UnitedHealth, a financial institution with millions in HSA assets under management.

The joint ownership of insurance companies, PBMs, medical provider organizations, and pharmacies allows the parent companies to game a little known regulation called the medical loss ratio (MLR). The ACA requires that insurers have MLRs of at least 80-85%, meaning they must spend 80-85% of premium dollars on medical care. When insurance companies own a PBM, a provider group or pharmacy, they can count premium dollars they “spend” with to those entities as “medical care” for purposes of the MLR, when in reality they are self-dealing – and often inflating the amount they pay their affiliated providers to meet the MLR requirements and avoid sending rebates to their customers for noncompliance. As a consequence large health care conglomerates have little if any incentive to contain costs. The self-dealing actually drives costs higher while enabling them to convert more premium dollars to profits than Congress intended when it included the MLR provision in the Affordable Care Act.

Taken together, Big Insurance profits from vertical integration by pooling their subsidiaries’ reach and capital, investing in and paying themselves and influencing the cost of and access to care for millions of Americans throughout the health care ecosystem.

The fact that Hawley and Warren are uniting on this important legislation is reflective of the broader national conversation about the nation’s health care affordability issue, which has created a medical debt crisis that a broad-swath of Americans now blame on Big Insurance.

Warren and Hawley recognize the critical importance of structurally separating companies within our health care system to protect patients and make prices more affordable.

The original Glass-Steagall Act was passed after many banks had already become insolvent. The Break Up Big Medicine Act could prevent a similar catastrophe.

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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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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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.

UnitedHealth Group Throws a Hail Mary Before CEO Testifies

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https://healthcareuncovered.substack.com/p/unitedhealth-group-throws-a-hail?utm_source=post-email-title&publication_id=255152&post_id=185346893&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

And the questions I’d ask UnitedHealth Group’s CEO about his company’s ACA pledge.

When I first saw the headline that UnitedHealth Group would “return Obamacare profits to customers in 2026,” my immediate reaction was: Oh good grief.

The timing is just too perfect.

UnitedHealth’s pledge was tucked neatly into prepared testimony from CEO Stephen Hemsley, just hours before he (and four other Big Insurance CEOs) are to be hauled into Congress to testify before two House hearings on health care affordability.

“A text message conversation between my colleague, Joey Rettino, and me.

Today, the CEOs will be asked to explain why Americans are paying through the nose for coverage and still getting denied care, trapped in narrow networks and buried under medical debt. As of late, Republican lawmakers — and President Trump himself — have discovered religion on the issue, publicly fuming about high premiums and insurer abuses.

If you’re feeling a little misty-eyed about this sudden burst of corporate altruism, let me save you the trouble. This isn’t a moral awakening. It’s a PR maneuver and narrative control being implemented in real time.

Hail Mary

It’s the corporate version of a quarterback, down by four points, seconds left on the clock, closing his eyes and launching the ball fifty yards downfield, hoping something — anything — miraculous happens before the time runs out. UnitedHealth’s pledge is just a long, desperate PR pass into the end zone, praying lawmakers and reporters will focus on the gesture instead of the business model that allows them to gobble up those dollars in the first place.

It’s worth noting that UnitedHealthcare, while the largest insurer in the country with 50 million health plan enrollees, is actually a relatively small player in the ACA marketplace — about 1 million customers in 2026, compared with roughly 6 million for Centene, according to Politico. This is not UnitedHealth sacrificing a part of its core profit engine. (It doesn’t even disclose how much it makes on its ACA business, but I can assure you it’s a very small part of the more than $30 billion in annual profits it’s been making in recent years.) This is a carefully calibrated concession of a slice of this conglomerate’s business that won’t jeopardize its Wall Street standing, which is what Hemsley cares about most.

Read Stephen Hemsley’s prepared testimony here.

As I wrote yesterday, I spent years inside the insurance industry, helping executives shape their public image and get ahead of bad headlines. I know this playbook by heart. When scrutiny spikes, you roll out a “good guy” story. You announce a consumer-friendly initiative and you flood the zone with talking points. You give lawmakers anything they can point to as evidence of “progress,” so the temperature in the room drops just a few degrees. It’s all an optics game, and if I was in my old job I’d probably get a bonus for thinking of a stunt like this.

Reputational damage control

When Hemsley and his Big Insurance buddies sit before Congress, don’t be surprised if he pivots quickly from this show of supposed humility to pointing fingers at everyone else for driving up costs – including hospitals, doctors, drug companies and whoever else. How do I know this? Hemsley said as much in his prepared testimony. His fellow CEOs sang from the exact same hymnbook, written by the best flacks money can buy.

So no, I’m not impressed by UnitedHealth Group’s gesture. And neither should lawmakers.

If UnitedHealth and its peers were serious about affordability, they wouldn’t be waiting until the night before a congressional grilling to dangle a symbolic rebate. They would be opening their books and explaining their pricing algorithms. They’d come clean about how much of our premium dollar goes to care and how much goes to executive compensation, stock buybacks and acquisitions that tighten their grip on the health care system.

This isn’t a gift. It’s a distraction.

And like most Hail Marys, it doesn’t work if you’re already down a whole lot of points. I hope the lawmakers at today’s hearing remember the score.

In light of UnitedHealth Group’s latest move, see below for some questions that I would ask Hemsley if I were in Congress:

  • ACA plan and pledge specifics
    • How many people are enrolled in your ACA marketplace plans, and how much total profit are you committing to rebate to them?
    • What were your profits from ACA marketplace plans in recent years?
    • Will you commit to disclosing ACA-specific enrollment and profit figures when you announce 2025 earnings next Tuesday? And how many people dropped coverage after the enhanced ACA subsidies were not renewed?
    • By how much, on average, did you raise ACA premiums because Congress did not renew those subsidies?
  • Public money vs. private plans
    • Between 2020–2024, your filings show about $140 billion in operating profits and roughly $894 billion in revenue from Medicare and Medicaid versus $321 billion from commercial plans. Do you agree that about 74% of your revenue now comes from taxpayers and seniors?
    • Given that you have about twice as many people in commercial plans as in Medicare/Medicaid, do you agree the government is paying you far more per enrollee than private customers are?
  • Accountability going forward
    • Will you commit to disclosing ACA-specific enrollment and profit figures when you announce 2025 earnings next Tuesday?
    • Will you commit not to raise premiums or fees in your other lines of business to offset the ACA rebates?
    • Will you commit to providing the transparency and granularity needed for the public to verify that this rebate pledge is real and not a PR maneuver?

Why So Many Young Families Are Stuck Renting, Delaying Kids — and Getting a Cat Instead

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https://healthcareuncovered.substack.com/p/why-so-many-young-families-are-stuck?utm_source=post-email-title&publication_id=255152&post_id=184671212&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

Rising health care costs are quietly reshaping family life and pushing homeownership, parenthood and financial stability further out of reach for millions of Americans.

The youngest of Millennials will hit 30 years old this year. For them and their older Millennial-counterparts, this is supposed to be the stage of life where people buy homes, have kids and settle into the textbook version of stability. But the reality for far too many Americans is something entirely different. It means delaying marriage, delaying children, delaying homeownership — and adopting pets to save them from college tuitions and pediatric specialists.

It’s not because an entire generation is collectively bucking the way “adulthood” used to be. It’s because the math doesn’t work anymore – and health insurance costs are a huge part of why.

Health care is eating the family budget

According to a new analysis from the Center for Economic and Policy Research (CEPR), the typical working family spent $3,960 on health care in 2024, including premiums and out-of-pocket costs. That’s the median… meaning half of families paid more.

Another striking finding from CEPR is that one in ten working families paid more than $14,800 in a single year on health care expenses. And for many low-income and rural households, health care consumed more than 10% of their entire income.

When the average Millennial earns about $47,034 a year, even the “average” health insurance spending now represents a meaningful slice of take-home pay before rent, student loans or the price of simply existing are even deducted. That threshold forces real tradeoffs: rent or deductible? Daycare or co-pays? Savings or prescriptions?

For young families trying to get started, that tradeoff answers itself.

Families with children spend significantly more on both health insurance and health care than those without. Working families with at least one child spent a median $5,150 per year.

Add that to childcare costs and it becomes clearer why many Millennials are putting off parenthood — or skipping it altogether. Hence the cat that doesn’t need braces or an albuterol prescription.

Health costs and home ownership

Diapers aside, medical bills also directly collide with the ability to own a home.

A recent study published in JAMA Network Open found that adults carrying medical debt were significantly more likely to experience housing instability such as trouble paying rent and mortgage, or evictions and foreclosures. As KFF researchers found, more than 100 million Americans have medical debt, and the vast majority of them have health insurance. It just isn’t adequate coverage because of ever-growing cost-sharing requirements.

That matters enormously for young families and would-be homeowners. Medical debt lowers credit scores, drains savings needed for down payments and makes lenders more hesitant. It’s hard to compete in today’s housing market when your emergency fund got wiped out by an MRI. Or your credit score took a hit because you found a lump.

This is not about lifestyle choices

In part because of these costs, the traditional milestones that once built financial security now often increase financial risk. Health insurance and health care costs are rising faster than inflation and faster than they did for previous generations. That’s why more and more insured families are delaying prescriptions and skipping care because of cost.

These uniquely American costs bleed into career moves, relationships, everything.

Millennials aren’t afraid of commitment. They’re afraid of math that doesn’t add up in large part because of a health care system that continues to be an ever-growing weight that is capable of wiping out savings and reshaping family decisions.

It’s easy to frame these trends as cultural shifts or personal preferences, but the data helps fill in the blanks. It’s not just Millannials facing these issues. Gen Xers and even Baby Boomers (some of whom still have a few years until they cross the Medicare and Social Security finish line) are dealing with budget-eating health care costs and medical debt, too.

When nearly half of adults say they couldn’t afford an unexpected $500 medical bill, it’s not surprising that people hesitate before taking on a 30-year mortgage or the lifelong responsibility of raising a child (or taking that trip to celebrate their retirement for that matter.)

For now, all that can be said is that Millennials’ cats are doing fine. They are benefiting heavily from the status quo. Maybe they have something to do with all of this.

Insurers face new GOP pressure on affordability

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https://www.axios.com/2026/01/22/health-insurance-gop-republicans-affordability?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Health insurers are feeling political heat as Republicans try to shape the affordability narrative and counter Democratic messaging on health care costs.

Why it matters: 

President Trump and his allies have been increasingly assailing health plans over costs while seeking to deflect blame for blocking enhanced Affordable Care Act subsidies that help people afford premiums.

  • But the administration and Congress have less leverage than they have with drugmakers, and would have to address underlying drivers of health costs to really do something about premiums.

Driving the news: 

House Republicans have called CEOs of five of the largest health insurance companies in back-to-back hearings on Thursday, where they will be pressed on costs of coverage.

  • Executives from UnitedHealth, CVS, Elevance, Cigna and Ascendiun will appear before the House Energy and Commerce and Ways and Means committees.
  • Energy and Commerce Chair Brett Guthrie (R-Ky.) said on Wednesday the companies cover over half of the insured lives in the U.S., “so everybody’s being affected by the high cost of health insurance.”

Between the lines: 

It’s one thing to bash insurers, but quite another to match the talk with substantive health system changes.

  • “I think it’s interesting that they’re adopting some of the anti-insurer, populist rhetoric, but it needs to be backed up with actual policies that hold the health industry to account,” said Anthony Wright, executive director of consumer group Families USA.
  • He added that the hearing also should not be used to “distract” from the need to extend the ACA subsidies.

The other side: 

Insurers agree that health care costs are too high, but say they’re the part of health care that’s working to bring costs down. Executives blame high premiums on the prices charged by hospitals and drug companies.

  • “Congress is doing its job,” Mike Tuffin, CEO of the insurer trade group AHIP, told Axios when asked about the pressure from Republicans.
  • But he added that “a thorough evaluation of the causes of higher premiums clearly demonstrates that it’s the underlying cost of medical care that is the reason that premiums continue to go up.”

What they’re saying: 

Stephen Hemsley, CEO of UnitedHealth Group, will strike a note of contrition in his testimony, saying “like all of you, we are dissatisfied with the status quo in health care,” according to prepared remarks.

  • “The cost of health insurance is driven by the cost of health care,” he adds. “It is a symptom, not a cause.”
  • Still, Hemsley will say his company will rebate its profits this year from ACA coverage back to consumers, though he notes the company is a “relatively small participant” in that market. It’s unclear how much money will be rebated.
  • UnitedHealth became the object of widespread consumer anger just over a year ago, when the killing of CEO Brian Thompson unleashed a wave of social media-fueled rage over coverage denials and other business practices.

The big picture: 

Insurers say they support a range of policies aimed at lowering health care costs by targeting hospitals and drug companies.

  • Those include “site-neutral” payment policies to address hospital outpatient billing, efforts to curb hospital consolidation and a crackdown on tactics drug companies use to delay cheaper generic competition.
  • But lawmakers have broached other changes that would directly strike health plans, like targeting what many experts say are overpayments in Medicare Advantage, or restricting pretreatment reviews that can lead to denials of care.

What’s next: 

Trump earlier this month said he wanted a meeting with health insurance executives to press them on costs, but nothing is on the schedule and it’s unclear if that will happen.

  • Tuffin said he also expects future House hearings on health care costs with other parts of the health care industry besides insurers.
  • An Energy and Commerce Committee spokesperson confirmed there’s more to come but declined to provide details.