Tag Archives: Politics

What Medical Debt Cancellation Teaches Us About Our Failing Health-Care System

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It is a somber year for health care in America. While we commemorate both the 60th anniversary of Medicare and Medicaid and the 15th anniversary of the Affordable Care Act (ACA), we’re watching health-care costs soar to unaffordable levels and millions of Americans lose access to these very programs. Of the many devastating consequences we can anticipate from these policy choices, we should expect to see the crisis of medical debt in America worsen.

But the immediate harms of medical debt, or money owed for past medical care, are solvable problems—and solving them can point us toward bolder solutions to the crisis of unaffordable health care. 

During my time as director of policy in the Office of Cook County Board President Toni Preckwinkle, I and my colleague Nish Dittakavi helped launch the Cook County Medical Debt Relief Initiative using federal funding from the American Rescue Plan Act. This established the first publicly funded program in the United States to buy and cancel residents’ medical debt. In June 2025, President Preckwinkle announced that since its launch in 2022, the program has successfully abolished over $664 million in medical debt so far, benefiting 556,815 residents of Cook County, Illinois.

Cook County’s innovative program also catalyzed a movement across state and local governments.1 As my colleagues at the New School’s Institute on Race, Power and Political Economy have found, since Cook County announced its program, 29 state and local governments across 19 states have collectively pledged to eliminate $15.8 billion in debt for more than 6.3 million Americans. As of October 25, 2022, these programs have abolished nearly $11 billion in medical debt on behalf of more than 6 million residents.

We have shown that erasing medical debt like this can transform people’s lives. Now, we must leverage the momentum of debt cancellation to meet our current moment. Rather than leaving us satisfied with the short-term aid we can provide through medical debt cancellation, the popularity and success of these programs must push us to ask bigger questions about the upstream interventions we need to fix a broken health-care system that forces people to accrue this debt in the first place.

Our Medical Debt Crisis Is Bad, and Will Likely Get Worse

Amid rising health-care costs and increasingly stretched household budgets, medical debt has become a frequent focus of policy attention in the US. And with good reason: According to a 2021 KFF analysis, 20 million people, or nearly 1 in 12 adults, owe medical debt, totaling more than $220 billion. The Consumer Financial Protection Bureau (CFPB) found that medical debt accounted for 58 percent of debt in collections that same year.2

This economic burden can quickly spiral, as the Roosevelt Institute’s Stephen Nuñez examined in a May issue brief. Patients may be denied medical care due to unpaid bills or struggle to afford other basic needs like food. As emergency physician and historian Dr. Luke Messac details in Your Money or Your Life: Debt Collection in American Medicine, owing medical debt can impact your credit score and thus your ability to access loans, land you in court, result in wage garnishment (withholding earnings to pay off a debt), and even lead to arrest.3

These harms are not felt equally. Given existing disparities across a range of economic and health measures—from wealth and neighborhood segregation to quality of insurance coverage and access to paid family leave—it’s perhaps unsurprising that Black Americans, women, and people with chronic health challenges hold a disproportionate amount of medical debt. This further exacerbates existing health inequities and deepens the racial wealth gap.

Sadly, we should expect these numbers to rise thanks to the Trump administration’s gutting of our public health insurance system. Under the administration’s so-called signature legislative achievement, HR 1, an estimated 12 million people will lose health insurance by 2034, and hospitals and community health centers across the country will face severe threats to their solvency. Even sooner, without congressional action by December an additional 24 million people who purchase ACA plans will simultaneously face steep insurance premium increases and cuts to the tax credits that help subsidize these costs—a key focus of the federal government shutdown this fall.

An estimated 12 million people will lose health insurance by 2034, and hospitals and community health centers across the country will face severe threats to their solvency.

By decreasing eligibility for public insurance and increasing the cost many Americans must pay for non-employer-sponsored private insurance, these policy choices will increase medical debt.4

How Myths About Our Health-Care System Perpetuate Medical Debt

Myths that have dominated decades of health policy can trick us into believing medical debt is an unfortunate bug in an otherwise well-designed system.5

Many proponents of the current system claim that cost-sharing (when patients pay for a portion of their care through copayments, coinsurance, and deductibles) benefits the system by making patients more responsible and frugal when they seek care. But this myth conveniently ignores the vast body of evidence that shows cost-sharing decreases adherence to treatment, leads to worse health outcomes, and, importantly, does not lead to decreased total costs across the system.

The myth that health care can function like a traditional market, with the burden on us as consumers to just make more informed choices, hides the reality that we are patients whose access to needed care is determined by factors beyond our control—what insurance, if any, our job provides, what that insurance chooses to cover, the cost-sharing that insurance chooses to require, and the covered medicines set by the pharmacy benefit manager (PBM) that insurer works with (and increasingly owns). The myth that our health-care system is a functioning market that can and will course-correct any problems on its own also leaves us looking for solutions from the very stakeholders who benefit from the structure as it is currently.

The myth that our health-care system is a functioning market that can and will course-correct any problems on its own also leaves us looking for solutions from the very stakeholders who benefit from the structure as it is currently.

The reality is that medical debt is the logical outcome of core characteristics of the American health-care system, which include 

  • high prices set by hospitals, health-care organizations, pharmaceutical companies, and PBMs; 
  • a costly maze created by insurance companies that exclude, deny, and burden people in need; 
  • the significant public dollars for health extracted by corporations for their own profits; 
  • a system ultimately designed to place the financial burden of care on patients; and 
  • decades of policy that has failed to rectify the cruel and unsustainable harms these choices have created.

Medical Debt Is a Symptom of a Broken System, Not a Solution to Its Troubles

In the constrained environment under which so much of our health-care system operates, it might seem that collecting on medical debt is unfortunate but essential to keeping the system afloat. Yet even the most aggressive debt collection practices do not generate substantial revenue for hospitals and health-care organizations, as evidenced by a 2017 study in Virginia that found suing patients and garnishing their wages comprised only 0.1 percent of hospital revenue on average. Dr. Marty Makary, a coauthor of the study and the current commissioner of the Food and Drug Administration under the Trump administration, put the implications bluntly: “The argument that we have to do something this ugly in order to stay afloat is not supported by the data.”

Hospitals and health systems know this too, and recognize that most patients with debt simply cannot afford to pay. Precisely because the prospect of collecting full payment is so low, many choose instead to sell this debt cheaply—for pennies on the dollar—and write it off as a loss on their taxes. The cheapness of this debt is what allows cancellation programs like Cook County’s to achieve the high return on investment that is part of their popularity and success.6

This alone should point us to a fundamental question: If we can buy medical debt so cheaply and cancel it so easily, is this debt really necessary in the first place?

Of course, our health-care system needs significant resources to function. But if we are serious about finding sustainable revenue streams to stabilize it, we must acknowledge the needed money will not come from medical debt collection, nor from any other solution that increases the already heavy burden on individuals and maintains the power of the private sector.

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

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

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

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

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

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

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

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

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

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

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

CMS’ 2024 Health Spending Report: Key Insights

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CMS’ 2024 Health Spending Report: Key Insights

As media attention focused on Minneapolis, Greenland and Venezuela last week, the Center for Medicaid and Medicare Services (CMS) released its 2024 Health Expenditures report Thursday: the headline was “Health care spending in the US reached $5.3 trillion and increased 7.2% in 2024, similar to growth of 7.4% in 2023, as increased demand for health care influenced this two-year trend. “

Less media attention was given two Labor Department reports released the Tuesday before:

  • Prices: The consumer-price index (CPI) for December came in somewhat higher than expected with an increase of 0.3% and 2.7% over the past 12 months. Overall inflation isn’t rising, but it also isn’t coming down.
  • Wages: The Labor Department reported average hourly earnings after inflation in the last year rose 0.7% during the first five months of this year, but real hourly earnings have declined 0.2% since May. They’re stuck.

Prices are increasing but wages for most hourly workers aren’t keeping pace. That’s why affordability is the top concern for voters.

Meanwhile, the health economy continues to grow—no surprise.  It’s a concern to voters only to the extent it’s impacting their ability to pay their household bills. They don’t care or comprehend a health economy that’s complex and global; they care about their out-of-pocket obligations and surprise bills that could wipe them out.

As Michael Chernow, MedPAC chair and respected Harvard Health Policy professor wrote:

“The headline number, 7.2% growth in 2024, is concerning but hardly a surprise. It follows 7.4% growth in 2023. This rate of NHE growth is not sustainable. It exceeds general inflation and growth in the gross domestic product (GDP), pushing the share if GDP devoted to health care spending to 18%  in 2024; the share of GDP devoted to health care is projected to rise to 20.3% by 2033. In fact, these figures may be an underestimate of the fiscal burden of the health care system because spending on some things, such as employer administrative costs, are not captured… Given all the attention to prices and insurer profits, it is important to note that those factors are not the main drivers of spending growth—this time, it’s not the prices, stupid. There was virtually no excess medical inflation (medical inflation above general inflation) for 2023 or 2024. In fact, prices for retail drugs (net of rebates) rose at a rate below inflation. There will certainly be cases of rising prices driving spending, but on average, price growth is not the problem. This does not mean high-priced products and services are not an important component of spending growth, but instead it implies that their contribution to spending growth on average stems from their greater use, not rising prices. The main driver of spending growth is greater volume and intensity of care…”

My take:

Since 2000 to 2024, total healthcare spending in the U.S. has been volatile:

  • 2000–2007: High growth, typically 6–8% per year (driven by rising utilization and prices).
  • 2008–2013: Growth slowed to 3–4% during and after the Great Recession.
  • 2014–2016: Growth ticked up to 4.5–5.8% with ACA coverage expansion.
  • 2017–2019: Moderation around 4.5%.
  • 2020: COVID‑19 shock—growth slowed to ~2% due to deferred care.
  • 2021: Rebound to ~4%.
  • 2022: 4.8%, close to pre‑pandemic norms.
  • 2023: 7.4%, fastest since 1991–92.
  • 2024: 7.2%, reaching $5.3 trillion (18% of GDP)

Between 2000 and 2024, total health spending in the U.S. increased $3.9 trillion (279%) while the U.S. population grew by 58 million (20.4%). 2025 spending is expected to follow suit. The underlying reason for the disconnect between health spending and population growth is more complicated than placing blame on any one sector or trend: it’s true in the U.S. and every other developed system in the world. Healthcare is expensive and it’s costing more.

This is good news if you’ve made smart bets as an investor in the health industry but it’s problematic for just about everyone else including many in the industry who’ve benefited from its aversion to spending controls and cost cutting.

The current environment for the healthcare economy is increasingly hostile to the status quo. Voters think the system is wasteful, needlessly complicated and profitable. Lawmakers think it’s no man’s land for substantive change, defaulting to price transparency, increased competition and state regulation in response. Private employers, who’ve bear the brunt of the system’s ineffectiveness, are timid and reformers are impractical about the role of private capital in the health economy’s financing.

The healthcare economy will be an issue in Campaign 2026 not because aggregate spending increased 7-8% in 2025 per CMS, but because it’s no longer justifiable to a majority of Americans for whom it’s simply not affordable. Regrettably, as noted in Corporate Board Member’s director surveys, only one in five healthcare Boards is doing scenario planning with this possibility in mind.

P.S. The President released his Great Healthcare Plan last Thursday featuring his familiar themes—price transparency for hospitals and insurers, most favored pricing and elimination of PBMs to reduce prescription drug costs—along with health savings accounts for consumers in lieu of insurance subsidies. The 2-page White House release provided no additional details.

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.”

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.

CMS’ 2024 Health Spending Report: Key Insights

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CMS’ 2024 Health Spending Report: Key Insights

As media attention focused on Minneapolis, Greenland and Venezuela last week, the Center for Medicaid and Medicare Services (CMS) released its 2024 Health Expenditures report Thursday: the headline was “Health care spending in the US reached $5.3 trillion and increased 7.2% in 2024, similar to growth of 7.4% in 2023, as increased demand for health care influenced this two-year trend. “

Less media attention was given two Labor Department reports released the Tuesday before:

  • Prices: The consumer-price index (CPI) for December came in somewhat higher than expected with an increase of 0.3% and 2.7% over the past 12 months. Overall inflation isn’t rising, but it also isn’t coming down.
  • Wages: The Labor Department reported average hourly earnings after inflation in the last year rose 0.7% during the first five months of this year, but real hourly earnings have declined 0.2% since May. They’re stuck.

Prices are increasing but wages for most hourly workers aren’t keeping pace. That’s why affordability is the top concern for voters.

Meanwhile, the health economy continues to grow—no surprise.  It’s a concern to voters only to the extent it’s impacting their ability to pay their household bills. They don’t care or comprehend a health economy that’s complex and global; they care about their out-of-pocket obligations and surprise bills that could wipe them out.

As Michael Chernow, MedPAC chair and respected Harvard Health Policy professor wrote:

“The headline number, 7.2% growth in 2024, is concerning but hardly a surprise. It follows 7.4% growth in 2023. This rate of NHE growth is not sustainable. It exceeds general inflation and growth in the gross domestic product (GDP), pushing the share if GDP devoted to health care spending to 18%  in 2024; the share of GDP devoted to health care is projected to rise to 20.3% by 2033. In fact, these figures may be an underestimate of the fiscal burden of the health care system because spending on some things, such as employer administrative costs, are not captured… Given all the attention to prices and insurer profits, it is important to note that those factors are not the main drivers of spending growth—this time, it’s not the prices, stupid. There was virtually no excess medical inflation (medical inflation above general inflation) for 2023 or 2024. In fact, prices for retail drugs (net of rebates) rose at a rate below inflation. There will certainly be cases of rising prices driving spending, but on average, price growth is not the problem. This does not mean high-priced products and services are not an important component of spending growth, but instead it implies that their contribution to spending growth on average stems from their greater use, not rising prices. The main driver of spending growth is greater volume and intensity of care…”

My take:

Since 2000 to 2024, total healthcare spending in the U.S. has been volatile:

  • 2000–2007: High growth, typically 6–8% per year (driven by rising utilization and prices).
  • 2008–2013: Growth slowed to 3–4% during and after the Great Recession.
  • 2014–2016: Growth ticked up to 4.5–5.8% with ACA coverage expansion.
  • 2017–2019: Moderation around 4.5%.
  • 2020: COVID‑19 shock—growth slowed to ~2% due to deferred care.
  • 2021: Rebound to ~4%.
  • 2022: 4.8%, close to pre‑pandemic norms.
  • 2023: 7.4%, fastest since 1991–92.
  • 2024: 7.2%, reaching $5.3 trillion (18% of GDP)

Between 2000 and 2024, total health spending in the U.S. increased $3.9 trillion (279%) while the U.S. population grew by 58 million (20.4%). 2025 spending is expected to follow suit. The underlying reason for the disconnect between health spending and population growth is more complicated than placing blame on any one sector or trend: it’s true in the U.S. and every other developed system in the world. Healthcare is expensive and it’s costing more.

This is good news if you’ve made smart bets as an investor in the health industry but it’s problematic for just about everyone else including many in the industry who’ve benefited from its aversion to spending controls and cost cutting.

The current environment for the healthcare economy is increasingly hostile to the status quo. Voters think the system is wasteful, needlessly complicated and profitable. Lawmakers think it’s no man’s land for substantive change, defaulting to price transparency, increased competition and state regulation in response. Private employers, who’ve bear the brunt of the system’s ineffectiveness, are timid and reformers are impractical about the role of private capital in the health economy’s financing.

The healthcare economy will be an issue in Campaign 2026 not because aggregate spending increased 7-8% in 2025 per CMS, but because it’s no longer justifiable to a majority of Americans for whom it’s simply not affordable. Regrettably, as noted in Corporate Board Member’s director surveys, only one in five healthcare Boards is doing scenario planning with this possibility in mind.

Paul

P.S. The President released his Great Healthcare Plan last Thursday featuring his familiar themes—price transparency for hospitals and insurers, most favored pricing and elimination of PBMs to reduce prescription drug costs—along with health savings accounts for consumers in lieu of insurance subsidies. The 2-page White House release provided no additional details.

The health care hiring boom is losing steam

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

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

Why it matters: 

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

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

By the numbers: 

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

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

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

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

Federal policy changes could further chill hiring.

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

Case in point: 

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

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

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

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

What they’re saying: 

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

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

The intrigue: 

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

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

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?