Tag Archives: Politics

In OMB’s FY 2027 Proposed Budget, Healthcare is the Big Loser

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In OMB’s FY 2027 Proposed Budget, Healthcare is the Big Loser

In 1970 before there was ESPN Sports Center, there was ABC’s “Wide World of Sports” and its iconic montage opening featuring a disastrous ski jump attempt by Yugoslavia’s Vinko Bogataj and Jim Kay’s voice-over “the thrill of victory and agony of defeat.” It’s an apt framework for consideration of current affairs in the U.S. today and an appropriate juxtaposition for consideration the winners and losers in the White House Office of Management and Budget FY2027 released Friday.

  • Last week’s “Thrill of Victory” includes the recovery of Dude 14, the F-15E Strike Eagle pilot shot down over Iran Friday, the college basketball men’s and women’s’ Final 4 contests, the successful launch of Artemis II by NASA and, for some, the additional funding ($441 billion/+44% vs. FY 2026) for the Department of War in the President’s proposed budget.
  • And last week’s “Agony of Defeat” includes continued anxiety about the economy, especially fuel prices, growing concern the war in Iran begun February 28 might extend at a heavy cost in lives and money, and for health industry supporters, a $15 billion (-12% vs. FY 2026) cut to HHS and the 10-year, $911 billion Medicaid reduction in federal funding for Medicaid enacted in 2025 (HR1 The Big Beautiful Bill).

In its current form, this budget is unlikely to be enacted October 1, 2026: it’s best viewed as a signal from the White House about priorities it deems most important to the MAGA faithful in Congress, 28 state legislatures and 26 Governors’ offices controlled by Republicans. Though its explosive growth in of War Department funding to $1.5 trillion is eye-popping, cuts to healthcare are equally notable. Both are calculated bets as the mid-term election draws near (6 months) and clearly OMB is betting healthcare cuts will be acceptable to its base. Its view is based on three assumptions:

1- Healthcare cost cutting is necessary to fund other priorities important to its base. And there’s plenty of room for cuts in Medicaid, prescription drugs and hospitals because waste, fraud and abuse are rampant in all.

  • Medicaid: Medicaid is a state-controlled insurance program that covers 76 million U.S. women, children and low-income seniors primarily through private managed care plans that contract with states. In HR1, a mandatory work requirement was applied to able-bodied adult enrollees with the expectation enrollment will drop and state spending for Medicaid services will be less. But its enrollees are less inclined to vote than seniors in Medicare and its funding burden can be shifted to states.
  • Prescription Drugs: The White House asserts its “favored nation” pricing program will bring down drug costs but the combination of voluntary participation by drug companies and impenetrable patent protections in U.S. law neutralize hoped-for cost reductions. The administration wants to lower drug spending using its blunt instruments it already has: accelerated approvals, price transparency, pharmacy benefits manager restrictions et al. while encouraging states to go further through price controls, restrictive formularies and, in some, importation. In tandem, the administration sees CMMI modifications of alternative payment models (i.e. LEAD) as a means of introducing medication management and patient adherence in new chronic care pilots. Recognizing prescription drug prices are a concern to its base and all voters, the administration will use its arsenal of regulatory and political tools to amp-up support for increased state and federal pricing constraints without imposing price controls—a red line for conservatives.
  • Hospitals: Hospital consolidation is associated with higher prices and increased spending with offsetting community benefits debatable. Hospitals represent 43% of total U.S. health spending (31% inpatient and outpatient services, 12% employed physician services). In 4 of 5 U.S. markets, 2 hospital systems control hospital services. And hospital cost increases have kept pace with others in healthcare (+8.9% in 2024 vs. +8.1% for physician services and 7.9% for prescription drugs) but other household costs, wage increases and inflation. Lobbyists for hospitals have historically favored hospital-friendly legislation like the Affordable Care Act preferred by Democrats. The Trump administration sees site neutral payments, 340B reductions, expanded price transparency, limits on NFP system tax exemptions et al. and Medicaid cuts necessary curtailment of wasteful spending by hospitals. They believe voters agree.

Backdrop: Per the National Health Care Fraud Association, 10% of health spending ($560 billion) was spent fraudulently in 2024: the majority in the areas above.

2- The public is dissatisfied by the status quo and supports overhaul of the U.S. healthcare system to increase its affordability and improve its accessibility.

  • Consolidation: Through its Federal Trade Commission and Department of Justice, the White House has served notice it believes healthcare affordability and unreasonable costs are the result of hyper consolidation among hospitals, insurers, and key suppliers in the healthcare supply chain. It has appointed special commissions, task forces, and filed lawsuits to flex its muscle believing the industry has pursued vertical and horizontal consolidation for the purpose of reducing competition and creating monopolies. It shares this view with the majority of voters.
  • Corporatization: In tandem with consolidation, the White House asserts that Big Pharma, Big Insurer, and Big Hospital have taken advantage of the healthcare economy at the expense of local operators and mom and pop services. It presumes they’re run as corporate strongarms that access capital and leverage aggressive M&A muscle to drive out competitors and bolster their margins and executive bonuses. The administration treads lightly on corporate healthcare, seeking financial and political support while voicing populist concerns about Corporate Healthcare. Photo ops with CEOs is valued by the White House; corporatization is recognized as a necessary plus with a few exceptions.  By contrast, most voters see more harm than good. Thus, the administration courts corporate healthcare purposely and carefully.

Backdrop: Intellectually, the majority of voters understand healthcare is a business that requires capital to operate and margins to be sustainable. But many think most healthcare organizations put too much emphasis on short-term profit and inadequate attention on their mission and long-term performance.

3-The U.S. healthcare industry will be an engine for economic growth domestically and globally if regulated less and consumers play a more direct role.

  • The administration is resetting its trade policies in response to suspension of at-will tariff policies that dominated its first year. At home, it seeks improved market access for U.S. producers of healthcare goods and services. It will associate this effort with US GDP growth and expanded privatization in healthcare. And it will assert that expansion of global demand for U.S. healthcare products and services is the result of the administration’s monetary policy geared to innovation and growth. And it will play a more direct role in oversight of foreign-owned/controlled health products and services and impose limits of their use of U.S. data.
  • The administration also seeks to protect intellectual property owned by U.S. inventors and companies by increasing its policing at home and abroad. In this regard, the administration will play a more direct role in the application of AI-enabled solution providers and expedite technology-enabled interoperability.

Backdrop: U.S. healthcare is the world’s most expensive system, so protections against IP theft are important, but the administration’s legacy in healthcare will be technology-enabled platforms that enable scale, democratize science and shift the system’s decision-making (and financial risk) consumer self-care.

Final thought:

The U.S. healthcare system does not enjoy the confidence of the White House: its proposed FY27 budget illustrates its predisposition to say no to healthcare and yes to other pursuits. It bases its position on three assumptions geared to support from its conservative base.

This budget proposal clearly illustrates why state legislators and Governors will play a bigger role in its future at home and abroad. And it means consumer (voter) awareness and understanding on key issues will be key to the system’s future, lest it is remembered for the agony of its defeat than the thrill of its victory.

Hospitals That Sue You for Getting Sick

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Hospitals in just one state filed 1.15 million lawsuits — enabled by insurance plans that shift costs to patients while shielding themselves from the fallout.

“People are having to choose between going to the hospital and staying home and dying. Because at least my family won’t be burdened with a lawsuit if I die at home.”

That’s not a line from a dystopian novel. It’s what a real patient — identified only as GV0242002 in court records — told researchers after being sued by Sentara Health, Virginia’s largest hospital system and its most prolific medical debt litigant.

A major new report from researchers at George Washington University Law School and Stanford University’s Clinical Excellence Research Center, produced with PatientRightsAdvocate.org, documents what happens when American health care’s hidden costs finally catch up with the people least able to pay them. The findings for Virginia alone are staggering: between 2010 and 2024, hospitals and medical providers filed 1.15 million lawsuits against patients, seeking to collect $1.4 billion in medical debt. They followed those suits with more than 400,000 garnishment orders targeting wages and bank accounts. Plaintiffs’ attorneys collected $87 million in fees. Courts tacked on another $46 million in costs. And some providers charged interest as high as 18% annually — four times the prevailing commercial rate — buried in consent documents patients signed while frightened, in pain, and in no position to negotiate.

Read the full report here.

Among the top garnishee employers? Walmart, public schools, grocery stores and the hospitals themselves. Nonprofit hospitals in Virginia filed more than 4,100 garnishment orders against their own employees.

As the report notes, the hospitals’ patients have almost no way of knowing how much an inpatient stay or an outpatient service will cost or how much they will be on the hook for even if they are insured. The researchers describe health care providers operating “with insurers as accomplices” in keeping prices hidden from patients. That word — accomplices — is important and appropriate. This is not just a hospital story with an insurance footnote. It is also an insurance story. Both hospitals and insurers are complicit, although I would argue that hospitals have to operate in a system that is increasingly controlled by Big Insurance. That said, the relationship between hospitals and insurers is symbiotic, and the cost-sharing requirements imposed by insurers and the opacity of the agreements they enter into with hospitals enables both parties to increase prices and premiums in a way that ensures a rate of medical inflation that is perennially much higher than regular inflation and wage increases.

Here is the mechanism. An insurer designs a health plan with a $4,000 or $6,000 or $8,000 deductible. A patient — let’s say she works at a Kroger in Charlottesville, covered by her employer’s plan — gets sick and goes to Sentara Martha Jefferson Hospital. She signs an admissions agreement she cannot meaningfully read, consenting to pay “charges” based on a chargemaster that reflects prices no willing purchaser would ever agree to. She receives care. Weeks later, she gets a bill she cannot understand, for an amount she cannot verify, tied to prices that were never disclosed. She can’t pay. The hospital refers the account to one of the 20 law firms that brought more than half of all medical debt cases in Virginia during this period. She gets sued. The insurer that collected her premium — and her employer’s premium contribution — faces no lawsuit, no garnishment, no reputational consequence. It moves on to the next enrollment cycle.

The report covers 2010 through 2024 — the first 14 years of the Affordable Care Act. The ACA expanded coverage and has saved countless lives. But it did not stop the proliferation of high-deductible health plans that left millions of newly insured Americans technically covered and financially exposed. In fact, the ACA legitimized them. Since 2000, employer-sponsored family health insurance premiums have risen 321%, according to data cited in the report, and deductibles and other out-of-pocket costs have also skyrocketed. Wages rose 123% over the same period.

Patients are not drowning in medical debt because they are irresponsible. They are drowning because the insurance industry spent years engineering products that shift financial risk onto health plan enrollees and then collecting ever-increasing premiums for doing so.

I should note one finding with particular resonance for me personally. Ballad Health — the dominant hospital system serving the Tri-Cities of Northeast Tennessee and Southwest Virginia, the region where I grew up — filed 26,300 lawsuits against patients during this period. Ballad was created through a controversial 2018 merger that was granted antitrust immunity under a rare state certificate of public advantage, in exchange for commitments to maintain services and community benefit. The merger eliminated competition across one of the poorest stretches of Appalachia, leaving patients in communities like Scott County, Lee County, and Wise County, Virginia — some of the most economically distressed in either state — with effectively no choice in where they seek care.

Whether Ballad has honored its merger commitments has been disputed ever since. What is no longer in dispute: The system that was handed a regional monopoly turned around and sued its captive patients tens of thousands of times. Wise County, for those who don’t know, is also where Remote Area Medical for years set up a makeshift clinic at the county fairgrounds — the place that first showed me, up close, what this industry does to people when it stops pretending.

Virginia’s legislature took a meaningful step last year to give patients some relief. Former Governor Glenn Youngkin signed the Medical Debt Protection Act last May, capping interest on medical debt at 3%, eliminating interest for the first 90 days, and barring hospitals from foreclosing on homes or placing property liens. Those are real protections, and they matter. But as the researchers note, the law does almost nothing about the hidden prices and opaque billing at the point of care that generate the debt in the first place. The legislature addressed the collection machinery. It did not touch the engine driving it.

That engine — high cost-sharing, hidden prices, insurer-designed benefit structures that make patients financially liable before they walk through the door — is what I’ll be examining in depth in the coming weeks, as the major insurers report their first-quarter 2026 earnings. The Virginia data describe how this system costs patients. The earnings reports will tell you how it benefits big insurers and their shareholders.

Stay with me.

WSJ’s Editorial Board Contradicts What Its Newsroom Has Reported on Medicare Advantage

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The Wall Street Journal’s Editorial Board vs. The Wall Street Journal’s Newsroom.

The paper that exposed Medicare Advantage’s $50 billion overbilling scheme is now urging the government to make it the default for every senior in America.

During my two decades working for Big Insurance, I learned what industry spin looks like. I know what it sounds like. And I know that when a major newspaper’s editorial board publishes a piece defending an industry that has spent millions cultivating its editorial goodwill, the result often reads exactly like the Wall Street Journal’s editorial yesterday, “The Truth About Medicare Advantage.”

The piece is a masterclass in selective evidence. But what makes it remarkable is that the most damning rebuttal to it doesn’t come from me, or from Medicare Advantage’s many critics, or from the political left. It comes from the Wall Street Journal’s own newsroom.

In the fall of 2022, a team of Journal reporters did something extraordinary. They negotiated a data-sharing agreement with the Centers for Medicare and Medicaid Services, gaining access to 1.6 billion Medicare Advantage records over a 12-year period — every prescription filled, every doctor visit, every hospitalization. The investigation that followed was among the most rigorous pieces of health care journalism in years.

What they found was damning. Medicare Advantage plans received roughly $50 billion in payments between 2018 and 2021 for diagnoses that were questionable — conditions added to patients’ records not by their doctors, but by the insurers themselves. The Pulitzer Prize committee called it a series showing how health insurers gamed the Medicare Advantage program to collect billions for nonexistent ailments while shunting expensive cases onto the public.

The Journal’s editorial board was apparently not paying attention to its own reporters. Because in its editorial yesterday, the board cites a study funded by Elevance Health — one of the largest Medicare Advantage insurers in the country — to argue that private MA plans reduce Medicare spending. It calls opposition to Medicare Advantage “ideological, no matter the facts.”

“No matter the facts” certainly applies to the Journal’s editorial.

The central fact the editorial board cannot afford to acknowledge — because the entire argument would collapse if it did — is the ongoing Medicare Advantage overpayment scandal. MedPAC, the independent congressional agency that advises Congress on Medicare, projects that for 2026, Medicare Advantage payments will run $76 billion — or 14% — above what traditional Medicare would spend on the same beneficiaries, after accounting for health status, coding differences, and geographic factors. Note that the $76 billion in overpayments is just for this year. Looking back over the history of the Medicare Advantage program and the total likely would grow to nearly a trillion dollars if not more.

This is not a partisan number. MedPAC is a nonpartisan body. The methodology accounts for the very factors the industry argues should be included. And the conclusion is unambiguous: the federal government spends substantially more of our tax dollars per person under Medicare Advantage than it would under traditional Medicare. That $76 billion overpayment is not a rounding error. It is more than the entire annual budget of the Department of Education.

The Journal’s editorial board also ignores what that overpayment costs seniors who never chose a private plan. The Journal’s own reporting detailed how MA overpayments translated into roughly $13.4 billion in additional Part B premium costs in 2025 alone — costs borne by every Medicare beneficiary, including those in traditional Medicare who never signed up for a private Medicare replacement plan, which is what Medicare Advantage is. Every senior paying Part B premiums is, in effect, subsidizing the insurers the editorial board is championing.

The editorial argues that Medicare Advantage reduces the incentives for hospitals to upcode patients to a higher level of complexity. This would be a compelling point if the Journal’s own investigation had not spent years documenting how MA insurers themselves are the upcoding problem.

The Journal’s investigation found that coding intensity in Medicare Advantage runs 20% higher than in traditional fee-for-service Medicare. Of the 17 audits the Department of Health and Human Services Office of Inspector General has conducted since 2019, there was no support for nearly 69% of diagnoses that Medicare Advantage plans used for risk adjustment, leading to more than $100 million in overpayments to MA plans from upcoding alone. That’s not a rounding error either.

In the early years of private Medicare plans, insurers went to great lengths to sign up only the healthiest seniors and to run off the seniors when they got sick. It was called “cherry picking” and “lemon dropping.” I saw it up close in the early ‘90s when I was at Humana, one of the first insurers to get into the private Medicare replacement business. It was so prevalent in the industry that in 2003 Congress passed legislation to authorize the government to pay insurers more for signing up less-healthy seniors. So for two decades now, insurers have been paid more for sicker patients, which means they have powerful financial incentives to make patients look sicker on paper — but not to pay for treatments they supposedly would need. The Journal’s reporters found that among Medicare Advantage beneficiaries who had an HIV diagnosis added to their record by their insurer, just 17% received any treatment for the disease. Among beneficiaries diagnosed with HIV by their own physician, 92% received treatment. Diagnoses without treatment are not better care. They are extra revenue.

The editorial’s most revealing sentence may be this one: “The opposition to Advantage is ideological, no matter the facts.” This is a tell. It reframes data as politics, and politics as bias — a classic spin move designed to preempt legitimate criticism by impugning the critic’s motives.

But the criticism of Medicare Advantage is most certainly not ideological, and it is not coming only from Democrats. Sen. Chuck Grassley of Iowa, a Republican, wrote to UnitedHealth Group’s CEO arguing that the “apparent fraud, waste, and abuse at issue is simply unacceptable and harms not only Medicare beneficiaries, but also the American taxpayer.” The Trump administration’s Department of Justice opened a criminal investigation into UnitedHealth Group’s Medicare Advantage billing practices (which the Journal reported as a scoop). The Senate Judiciary Committee, which Grassley chairs, published a 104-page report on MA overbilling.

Another senior Republican, Sen. Bill Cassidy, who chairs the Senate Health, Education, Labor and Pensions (HELP) Committee, is the lead sponsor of a bill that would crack down on upcoding. It’s called The No UPCODE Act. These are not the actions of ideologues. They are the actions of Republican legislative leaders and committee investigators who read the Journal’s own reporting and followed up.

The editorial’s timing is no coincidence. Trump’s Medicare director, Chris Klomp, recently confirmed that the administration is actively considering a policy that would automatically enroll new Medicare beneficiaries into private Medicare Advantage plans — a proposal straight out of the Project 2025 blueprint. The editorial reads, at least in part, as advance justification for that policy.

Under current law, seniors who enroll in Medicare are automatically covered by traditional Medicare unless they affirmatively choose a private plan. Under a default enrollment scheme, the reverse would be true: seniors who fail to make an active choice would be placed into a private plan, with the option to switch back – but not for three years. Seniors would be locked in a plan that the government chose for them, that has a limited network of doctors and hospitals, that makes them pay the entire bill for services they might receive outside of that network, and that denies coverage for medically necessary care far more than traditional Medicare – for three years.

The consequences of getting automatic enrollment in MA wrong are severe and often irreversible. The vast majority of states do not require Medigap insurers to sell supplemental coverage to beneficiaries who want to switch back from Medicare Advantage to traditional Medicare outside of limited time windows. For many seniors, once they are in, they are in. The editorial board does not mention this.

And the program is hardly the stable backstop the board describes. A Johns Hopkins Bloomberg School of Public Health analysis found that approximately 10% of Medicare Advantage enrollees — roughly 2.9 million seniors — are being forced to find new coverage in 2026 as insurers exit markets, a tenfold increase in the forced disenrollment rate compared to just two years ago. The board wants to make this the default destination for every new senior in America, just as the private market is demonstrating it cannot sustain its current commitments.

Let’s return to the study the editorial board cites as evidence that Medicare Advantage saves money. The board presents it as peer-reviewed fact. What it does not say is that the researchers are affiliated with Elevance Health — formerly Anthem — one of the largest Medicare Advantage insurers in the country. Industry-funded research is not automatically wrong, but it requires disclosure and scrutiny that the editorial board does not provide. I know from personal experience that industry-funded research is typically rigged to support conclusions the funder wants to convey – to policymakers, the business community, the media and the public – and that any data that do not support the funder’s business objectives never make it into the final report.

In the communications business, we used to call this kind of thing a “third-party validator” — research that carries the appearance of independence while advancing the funder’s interests. I helped produce the playbook. I know how this works.

The Wall Street Journal’s newsroom has done some of the most consequential health care journalism of the past decade. Its reporters negotiated extraordinary data access. They documented, with precision, how the insurance industry has extracted billions from Medicare through practices that the Pulitzer committee described as gaming the system. They named names and they showed their work. And you can be certain that every word they wrote was carefully fact-checked and vetted by the Journal’s legal team.

The editorial board is in the same building as the Journal’s newsroom. I know because I’ve been in those rooms. I know and have worked with many of the reporters who cover the health insurance business, going back to my days in the industry. I can assure you that the Journal’s reporters are among the best in the business and, unlike the editorial writers, most certainly are not motivated by ideology.

The newspaper’s editorial board owes readers the same fidelity to evidence that its reporters have demonstrated. Instead, it has produced a piece of advocacy that reads like it was drafted in a health insurance industry communications shop — cherry-picked studies, industry talking points, and a dismissal of critics as ideologues “no matter the facts.”

I have spent the years since leaving the insurance industry trying to help people understand how spin works – how it is produced, how it travels, and how it takes hold even in institutions that should know better. The Journal editorial board’s Medicare Advantage advocacy is a case study.

This should be studied in every journalism school in America: The paper that exposed Medicare Advantage’s overbilling scheme is now urging the government to make it the default plan for every senior in America. Someone needs to explain that to the reporters who spent three years proving why that is a terrible idea.

Why drugs cost so much, 101: Medicine monopolies

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Why drugs cost so much, 101: Medicine monopolies
https://omny.fm/shows/an-arm-and-a-leg/why-drugs-cost-so-much-101-medicine-monopolies/embed?media=audio&size=wide&style=cover

We’re always asking: Why do drugs cost so freaking much? 

And it’s a complicated question. There are a bunch of reasons — to be sure. But in our reporting over the years, like our stories on insulin and tuberculosis drugs, experts cited one big reason over and over again: 

The pharmaceutical industry wages sophisticated legal battles to keep monopoly control over their best selling, most lucrative drugs — blocking generic competition, and increasing their prices along the way. 

How did it come to be this way? 

In this first episode of a new series – what we’re calling An Arm and a Leg 101 – we’re doing a crash course in the history of the drug patent system.

And the rags-to-riches story of one amazing guy is going to help us do it. 

Al Engelberg got schooled in the Art of the Hustle at a young age, collecting dimes at an illegal bingo game on the Atlantic City boardwalk. 

Later, he’d put those street smarts to use as he sat at the negotiation table in Washington D.C., hashing out the details of a law that would usher in the generic drug industry as we know it. Then made millions from the rules he helped write.

And as he admits, his legacy is mixed. 

On the one hand: The rules Al Engelberg helped write — a grand bargain between generic drugmakers and patent-holding brand pharma companies — unleashed the power of generic drugs to save Americans money. 

Nine out of ten prescriptions written today get filled with a generic.

On the other hand: In the process of making his fortune, Al Engelberg discovered loopholes, gaps, and perverse incentives in that grand bargain. 

Gaps that allowed brand and generic drugmakers to profit by keeping generics for many hit drugs off the market.  

So we now spend more than ever on medicine — and more than 20 percent of Americans report skipping their medication because they can’t afford it. 

Al Engelberg, now 86, has spent the last 30 years — and millions of his own dollars — trying to close those gaps. 

“I live in a world — a pharma world — where half the people think I’m dead, and the other half wish I was,” he tells us. 

You can read more of Al’s story — plus his prescription for fixing the crisis of high drug prices — in his book, Breaking the Medicine Monopolies: Reflections of a Generic Drug Pioneer.

And you can hear our earlier reporting on drug patents here:

John Green vs. Johnson & Johnson (part 1)

John Green vs. Johnson & Johnson (part 2)

The surprising history behind insulin’s absurd price (and some hopeful signs in the wild)

An Arm and a Leg 101 is made possible in part by support from Arnold Ventures.

Inside Big Insurance’s $1.7 Trillion Year | EP 2

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In second episode of the HEALTH CARE un-covered Show, we walk you through the most recent earnings reports of seven of the largest for-profit health insurance corporations in the country.

Every three months, the nation’s largest health insurers release earnings statements filled with crammed financial tables, investor language and Wall Street jargon. Most people never see them. Even fewer try to understand what they really reveal about how the U.S. health care system works.

In second episode of the HEALTH CARE un-covered Show, we do something no one else does: walk you through the most recent earnings reports of seven of the largest for-profit health insurance corporations in the country — UnitedHealth Group, CVS Health (Aetna), Cigna, Elevance, Humana, Centene and Molina. As you’ll see, the results paint a striking picture of how powerful and profitable Big Insurance has become.

Together, those companies collected nearly $1.7 trillion in revenue in 2025, about $175 billion more than the year before and generated more than $54 billion in profits. Yet despite the record financial performance, the companies covered roughly 10 million fewer people than they did in 2024 – and ever-increasing chunks of their revenues are now coming from Americans’ tax dollars.

We show evidence of a trend reshaping the health care economy: self-dealing through insurers’ vertical integration and their huge government contracts, which accounts for much of the industry’s growth. For example, UnitedHealthcare now gets more than 77% of its revenue from government programs such as Medicare Advantage and Medicaid. As a reminder, Medicare Advantage is not traditional Medicare but a very profitable privatized version of the program that’s funded by taxpayers and that last year overpaid insurers by $84 billion.

We also examine stock buybacks. Between 2015 and 2025,these seven companies spent more than $137 billion buying back their own shares, a move that boosts earnings per share and enriches shareholders and top executives. That’s $137 billion that could have been used to reduce premiums and out-of-pocket expenses but went into the pockets of investors instead.

To put the numbers in perspective, we compare these insurers with some of America’s most recognizable corporations — from Chevron and PepsiCo to Bank of America and Salesforce. Most of the big seven generate more revenue than these household names. And many of the insurance conglomerates are growing faster than companies like Target, Uber, Disney and Starbucks.

We take viewers inside Wendell’s office to make sense of Big Insurance’s dense 2025 earnings reports.

You won’t find an analysis quite like this anywhere else.

You can also tune in here:

This episode has been re-uploaded with corrected numbers. For instance, Disney was listed as having revenues of $274.9B in 2025. The correct number is $94.4B. The percent change used in the original video (+80%) was correct.

Racing in the Wrong Direction

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New data shows the U.S. is moving backward on coverage, not forward—raising a harder question: is the problem affordability, or priorities?

Will the U.S. ever provide health care for all its citizens?

The prospects are dim for enacting a system that provides services for the county’s entire population the way Europeans have done for decades. As the head of the German pharmaceutical association in Berlin once told me in an interview, “In the German system, nothing comes between us and our principle of solidarity.” I asked, “Even your profits?” “Not even our profits,” he replied.” Imagine any health care executive in the U.S., where the bottom line reigns supreme, daring to say a thing like that.

That interview with the German pharmaceutical executive came to mind again as I read the latest study from the Commonwealth Fund, which should be required reading for anyone interested in health policy and the future of the American system. The report by the Fund’s senior scholar, Sara Collins, said the Trump administration has “made it harder than ever for Americans to get good health insurance,” a conclusion that needs to be shared far and wide.

The administration itself predicts these changes will reduce enrollment in the Affordable Care Act marketplaces next year by 1.2 to 2 million people. The U.S. is falling backward in providing health care for all, a project that prompted Dr. Martin Luther King Jr. to observe long ago, “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

At the Commonwealth Fund, Collins noted that those losses are on top of other changes expected to leave another 7.5 million people uninsured. Even though members of Congress hostile to the Affordable Care Act failed to repeal the act during Trump’s first term, Collins points out they still inflicted damage by whittling away at some of the law’s provisions. She reports that last year a majority of the public supported the Affordable Care Act’s enhanced premium tax credits, established in 2021. Republicans, however, did not pass legislation to extend those credits that helped millions of Americans, who now face annual premium increases of $750 to more than $4,000.

Does the destruction of the hard-won Affordable Care Act mean that a country as rich as ours cannot afford to pay for medical care like the rest of the world’s developed countries do, or does it mean those with clout don’t want those without to have health care? I am inclined to believe the latter.

That was not the only damage caused by the Trump administration. For example, a new rule for marketplace coverage increased out-of-pocket costs, eliminated special enrollment periods for those with low incomes, and put new restrictions on auto enrollment. In addition insurers raised premiums by 20% or more in many cases, hoping that those people who are healthy would not drop coverage and leave them with sick, and more costly, health plan enrollees. Such a strategy would be unheard of in countries with national health systems, where everyone is entitled to care.

“The Trump administration’s latest actions on the ACA marketplaces continue to make it as difficult and costly as possible for those with low and moderate incomes to get good health insurance and care they need,” Collins reported. “This will lead to more people with low and moderate incomes uninsured, underinsured, less healthy, and saddled with medical debt.”

Is this what Americans want for their health care system?

Wall Street stagflation chatter rises

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https://www.axios.com/2026/03/10/oil-iran-wall-street-stagflation?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiospm&stream=top

Flared jeans are in style, an oil crisis is driving pain at the pump, and unemployment is rising: It’s not 1978, but it kinda feels that way.

The big picture: 

Talk of stagflation is rising on Wall Street, as investors fret the dreaded pairing of high inflation and high unemployment is making a comeback.

Zoom in: 

On Monday alone, at least six notes from investment managers and Wall Street analysts warned of “stagflationary” concerns.

  • Media outlets have run with this.
  • Last Friday, Chicago Fed President Austan Goolsbee noted that rising unemployment on top of an oil price shock creates “exactly the kind of stagflationary environment that’s as uncomfortable as any that faces a central bank,” per the Wall Street Journal.

Flashback: 

Analysts and media started tossing out the “s” word when inflation revved up back in 2021.

  • The term “stagflation” really took off the next year, when Russia invaded Ukraine, spiking energy prices. Everyone then predicted a recession that never materialized.

State of play: 

Today is different for two reasons. First, the job market is more sluggish than it was a few years ago.

  • Second, the oil shock from the Iran war is potentially magnitudes larger than from the Russian war, taking 20% of global supply oil off the board.
  • “Disruption to the Strait of Hormuz creates a far larger potential supply shock that extends beyond oil,” Skylar Montgomery Koning, a macro strategist with Bloomberg, wrote in a note.
  • “Shipping flows more broadly are being disrupted. That is pushing up energy and food costs, lifting inflation and squeezing growth.”
  • “This stagflationary mix is particularly toxic for markets, as it increases the risk that bonds and equities sell off together.”

Reality check: 

It’s not the 1970s. Economists believe the Iran war will slow economic growth and cause an increase in inflation, but not to the extremes seen back then.

  • “If you want the word ‘stagflation’ with a very little ‘s,’ you could,” says David Kelly, chief global strategist at JPMorgan Asset Management.
  • He recently revised his economic growth projections slightly downward this year due to the war. And he is projecting slightly higher inflation.
  • The difference between now and the 1970s is, back then, higher prices led to wage increases, which led to more inflation in a wage-price spiral that got out of hand, he says. Workers just don’t have the power for that today.
  • “This is probably just going to slow the economy down, rather than trigger some long wave of inflation,” says Michael Madowitz, principal economist at the progressive Roosevelt Institute.

The bottom line: 

This is not your father’s economic shock. Yesteryear’s bell bottoms would look a bit weird if you trotted them out today.

New Deductible Rules Allow for $31,000 Out-of-Pocket Maximum

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https://healthcareuncovered.substack.com/p/new-deductible-rules-allow-for-31000?utm_source=post-email-title&publication_id=255152&post_id=189671978&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

Trump’s proposal would revive “catastrophic” plans with deductibles as high as $31,000 — shifting even more costs onto patients with cancer, chronic illness, and medical emergencies.

On Friday, Erica Bersin – who has two chronic illnesses, including multiple sclerosis – wrote about the challenges of finding a decent and affordable health plan in the ACA marketplace. As a sole proprietor, the only plan with a manageable premium ($330 a month) came with a $10,000 deductible. MS drugs are expensive and many people with the disease have to pay hundreds and sometimes thousands of dollars out of their own pockets before their coverage kicks in. Sadly, the way the ACA plans are structured, Americans with chronic conditions – and others who are diagnosed with cancer or have a heart attack or other acute medical event and have no option for coverage other than the ACA marketplace – are penalized financially far more than the rest of us..

But instead of helping those folks out, the Trump administration is proposing to change the marketplace in ways that will make a $10,000 deductible seem like a bargain. Say hello to a $31,000 family deductible. And even if you’re covered by an employer-sponsored plan and in no imminent danger of being enrolled in a plan like that, know that their reappearance (they were outlawed 16 years ago), will push your premiums even higher than they already are. That’s because hospitals and physician practices know people enrolled in those plans will not be able to pay their bills. They’ll have no option but to increase their prices to cover the additional bad debt.

Health insurance policies with deductibles that high were prevalent before the Affordable Care Act was enacted in 2010. When I was a health insurance executive, I knew some insurers were selling policies with family deductibles north of $50,000. Not only that, many of them had annual and lifetime caps and wouldn’t pay for any care related to a preexisting condition.

They were officially called “catastrophic” plans. Patient and consumer advocates had a more appropriate name for them: junk plans. They were outlawed by the ACA, and I thought they had been buried for good. Unfortunately, the Trump administration is bringing them back to life.

I’m sure my former colleagues in the health insurance business went to work immediately getting those plans ready to sell once again to unsuspecting customers. That’s because they can be very, very profitable. Imagine having to pay $50,000 – or even $31,000 – out of your own pocket every year before your insurer will cover the care your doctor says you need. Cigna, where I worked, as well as Aetna and UnitedHealthcare, the country’s biggest health insurers, sold plans like that and collected billions in premiums every month but paid little if anything out in claims during a given year.

When I first testified before Congress, I was one of three people at the witness table, and all of us knew a lot about those plans – including Nancy Metcalf, who was senior program editor at Consumer Reports at the time. She in particular knew about the many shortcomings of those plans because she had heard horror story after horror story from people who had enrolled in a junk plan. She urged lawmakers to outlaw them – or at least make insurers put warning labels on them so people would know what they were buying and how little protection those plans provided. As Nancy testified:

Consumers need to be told, in big letters, what their policy’s out-of-pocket limit is, and right next to it, in equally big letters, if there are any expenses that don’t count towards that. They need to know approximately what their out-of-pocket costs will be for expensive treatments such as cancer chemotherapy, or heart surgery, or infusions of patented biologic drugs. They need, in other words, a fighting chance not to be ripped off by junk insurance.

As Reed Abelson of The New York Times reported last week, the administration’s proposal “involves a type of plan known as a catastrophic or skinny policy. While they may be appropriate for someone who is young and healthy, a sudden emergency room or unexpected hospital stay could cost thousands of dollars in unforeseen bills. People with chronic medical conditions also might have to pay for much – if not all – of their care out of their own pockets.”

Commonwealth Fund president Joseph Betancourt pointed out in the Times’ story that people are already struggling to pay for their medical care:

There’s no doubt that we have an affordability crisis. As we move forward to shifting more of the burden to patients, there’s a chance to really exacerbate the crisis.

Abelson noted that under the proposed rule change, insurance companies could not only sell the catastrophic plans on a multiyear basis once again, they could also sell plans that do not offer an established network of hospitals and doctors. “Those plans,” she wrote, “would instead pay a fixed amount for a doctor’s visit or procedure, and patients would have to pay any difference in price.”

Abelson also warned of another risk associated with sky-high deductibles: Because their premiums are lower, they “will end up being used as the benchmark for the level of subsidies in a given market. People who want a traditional plan with an established network could end up paying more because they receive a lower subsidy.”

As I mentioned, all of us will likely pay more for our coverage when these plans become legal again next year. As BenefitsPro reported last month – quoting the CEO of Community Health Systems, a big hospital chain – most patients who are currently in ACA plans with lower but still high deductibles and coinsurance requirements can’t pay very much of the “big out-of-pocket bills” hospitals have to send them.

It’s only going to get worse.

The $10,000 Deductible and the Myth of ‘Affordable’ Care

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https://healthcareuncovered.substack.com/p/the-10000-deductible-and-the-myth?utm_source=post-email-title&publication_id=255152&post_id=189283212&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

How disappearing ACA subsidies, soaring premiums, and bureaucratic chaos nearly left a consultant with multiple sclerosis uninsured.

The business of health care is not broken; it is working exactly how it was intended. It was designed for people to pay in just in case something happens and then not to pay out when it does. It was intended to “maximize shareholder value.”

About 22 million Americans received enhanced premium subsidies in 2025. According to The Urban Institute and The Commonwealth Fund, it’s estimated that “7.3 million people will leave the ACA marketplace in 2026” due to the loss of the subsidies. About 5 million people will go uninsured, rather than find insurance elsewhere.

Some people have said their premiums and deductibles are doubling or even tripling with tens of thousands in deductibles before coverage kicks in. While absolutely imperfect, we must keep the Affordable Care Act intact for everyone otherwise the cost of Medicare, Medicaid, and private and employer-based insurance will skyrocket, resulting in millions of people losing coverage due to lack of affordability.

Accessible insurance is a huge part of living a healthy life. Because of this, we need to expand coverage and make it fair for everyone. The goal should be for every single person in the U.S. to have head-to-toe health care.

My Story

As a single-person LLC consultant, I have navigated the New York State Exchange (ACA) for years. It is the most expensive Exchange in the country for those who do not qualify for subsidies. If subsidies are received, an increase in income requires repayment via federal tax returns the following year.

For 2025, I resigned myself to a catastrophic plan at $330 per month with a $10,000 deductible, as other options approached $1,000 monthly. While applying in November 2024, my temporarily being in-between projects / contracts was interpreted by the NYS Exchange as being unemployed, which led me to unexpectedly qualify for Medicaid. The state market assured me that this was correct for consultants in my situation, and they “saw it all the time.”

However, during open enrollment in October 2025, I was informed that despite meeting the income threshold, I no longer qualified for either Medicaid or financial assistance / subsidies. The catastrophic plan doesn’t seem to exist now, and the “least expensive” option is $675 with poor / limited coverage. After four months, dozens of phone calls, six people (including an aide in my state assembly member’s office), and about 100 hours of everyone’s time, I have health insurance this year, for now.

Living with two chronic illnesses, including multiple sclerosis, my experience with a “government run” system over the last year has led me to believe that, for the most part, it works. Health care should be a right of birth, not a privilege for the rich.

This is just one person’s story. The rise in health care costs impacts everyone, but especially lower income Americans. You can see some of their fears, here.

CBO’s Updated Projections of the Hospital Insurance Trust Fund’s Finances

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https://www.cbo.gov/publication/62165?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

The Congressional Budget Office regularly updates the Congress on our projections of the Hospital Insurance (HI) Trust Fund’s financial position as well as changes in our outlook on that position. This blog post serves as that update.

The HI trust fund is used to pay for benefits under Medicare Part A, which covers inpatient hospital services, care provided in skilled nursing facilities, home health care, and hospice care. The fund derives its income from several sources. Over the next 30 years, about three-quarters of its annual income comes from the Medicare payroll tax and roughly one-eighth comes from income taxes on Social Security benefits. The rest comes from other sources.

Budget Projections

We estimate that the HI trust fund’s balance is exhausted in 2040. The balance generally increases through 2031, but spending begins to outstrip income in the following year.

That projection is based on our demographic projections published in January 2026, our economic and 10-year budget projections published on February 11, 2026, and our long-term budget projections that extend those earlier projections. It does not account for any effects, including effects on the economy or the budget, of the Supreme Court’s ruling on tariffs on February 20, 2026 (Learning Res., Inc. v. Trump, Nos. 24-1287, 25-250, slip op. (S. Ct. Feb. 20, 2026)).

As required by the Deficit Control Act, our projections reflect the assumption that benefits would be paid as scheduled even after the HI trust fund was exhausted. If the balance of the fund was exhausted and the fund’s spending continued to outstrip its income, total payments to health plans and providers for services covered under Part A would be limited by law to the amount of income credited to the fund. Total benefits would need to be reduced (in relation to the amounts in our baseline projections) by an amount that rises from 8 percent in 2040 to 10 percent in 2056, we estimate. It is unclear what changes the Centers for Medicare & Medicaid Services would make to operate the Part A program under those circumstances.

We estimate that the HI trust fund’s actuarial balance measured over a 25-year period is negative: an actuarial deficit of 0.30 percent of taxable payroll (or 0.13 percent of gross domestic product, or GDP).

The actuarial balance is a single number that summarizes the fund’s current balance and annual future streams of revenues and outlays over a certain period. It is the sum of the present value of projected income and the current trust fund balance minus the sum of the present value of projected outlays and a year’s worth of benefits at the end of the period. A present value is a single number that expresses a flow of current and future income or payments in terms of an equivalent lump sum received or paid today. And taxable payroll is the total amount of earnings—wages and self-employment income—subject to the payroll tax.

To eliminate the actuarial deficit, lawmakers would need to take action. They could increase taxes, reduce payments, transfer money to the trust fund, or take some combination of those approaches. The estimated size of the change needed—0.30 percent of taxable payroll—excludes the effects of changes in taxes or spending on people’s behavior and the economy. Those effects, which would depend on the specifics of the policy change, would alter the size of the tax increase, benefit reduction, or transfer needed to eliminate the actuarial deficit.

Changes in Our Projections Since March 2025

The year in which the HI trust fund’s balance is exhausted in our current projections, 2040, is 12 years earlier than in our most recent estimate of that date, which was published in March 2025. Measured in relation to taxable payroll, the trust fund’s 25-year actuarial deficit is 0.17 percentage points greater in the current projections than in last year’s. (Measured in relation to GDP, the actuarial deficit is 0.07 percentage points greater than we projected last year.) Those changes are driven largely by projections of less income to the fund. Projections of greater spending also contribute to the changes.

Our projections of income to the HI trust fund are less this year than last year for three main reasons:

  • First, revenues from taxing Social Security benefits are smaller in the current projections because of changes put in place by the 2025 reconciliation act (Public Law 119-21), which lowered tax rates and created a temporary deduction for taxpayers age 65 or older.
  • Second, we decreased our projections of revenues from payroll taxes to account for projections of lower earnings.
  • Finally, we now project interest income credited to the trust fund to be smaller than estimated last year because of the smaller trust fund balances in this year’s projections.

Spending is projected to be greater mainly because of an increase in expected spending per enrollee. Per-enrollee spending in Medicare Part A’s fee-for-service program in 2025 and bids in 2026 by providers of Medicare Advantage plans were both higher than we expected, leading to projections of greater per-enrollee spending in both programs.

Projections of the HI trust fund’s balances are sensitive to small changes in projections of its spending and income. As a result, those estimates are highly uncertain.