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Pressure points: 5 ways the shutdown could end

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Pressure points: 5 ways the shutdown could end

Congress on Wednesday enters the eighth day of the federal shutdown with neither party giving an inch and the path to a resolution nowhere in sight. 

But something will have to give if lawmakers hope to reopen the government in any timely fashion, and that movement will likely be the result of external forces exerting pressure on one party — or both of them — to break the deadlock.

That’s been the case in the protracted shutdowns of years past, when a number of outside factors — from economic sirens to public frustration — have combined to compel lawmakers to cede ground and carry their policy battles to another day.

Public sentiment

Among the most recycled quotes on Capitol Hill is attributed to Abraham Lincoln: “Public sentiment is everything.” The trouble, in these early stages of the shutdown fight, is that the verdict is still out on where that sentiment will land.

That uncertainty has led both parties to dig in while they await more concrete evidence of which side is bearing the brunt of the blame. But those polls are coming, and if history is any indication, they will be a potent factor in forcing at least one side to shift positions for the sake of ending the shutdown. 

That was the case in 2013, when Republicans demanding a repeal of ObamaCare saw their approval ratings plummet — and dropped their campaign after 16 days without winning any concessions. A similar dynamic governed the shutdown of 2018 and 2019 — the longest in history — when Republicans agreed to reopen the government without securing the border wall money they’d insisted upon. 

A recent CBS poll found that 39 percent of voters blame Trump and Republicans for the shutdown; 30 percent blame congressional Democrats; and 31 percent blame both parties equally. 

A Harvard/Harris poll also showed that more respondents blame Republicans, 53 to 47 percent, but nearly two-thirds believe Democrats should accept the GOP’s stopgap funding bill without a fix for the expiring Affordable Care Act premium subsidies.

The ambiguity of those sentiments has heightened the partisan blame game — and has given both sides an incentive to hold the line until a clearer picture emerges. 

Air traffic controller issues

It was nearly seven years ago that the 35-day shutdown ended after travel chaos and short-staffing of air traffic controllers brought immense strain on the aviation sector — and trouble is already starting up again. 

An uptick of air traffic controllers calling in sick Monday forced numerous flight delays and cancellations, prompting concerns that a reprisal of what happened in 2019 could be starting up again. 

“We should all be worried,” said Sen. Mike Rounds (R-S.D.), who was part of informal rank-and-file talks last week about a possible resolution.

Transportation Security Administration workers and air traffic controllers are all considered essential workers, with the Department of Transportation announcing more than 13,000 controllers are set to work without pay during this shutdown.

Those calling in sick prompted delays at numerous big airports, including Denver International Airport and Newark Liberty International Airport. The Hollywood Burbank Airport went without any air traffic controller on-site for nearly six hours Monday. 

Just like the record-setting 2019 shutdown, Democrats are counting on this issue creating problems for Trump and Republicans. Sen. Chris Van Hollen (D-Md.) told reporters that he and other local officials are holding a press event at Baltimore/Washington International Thurgood Marshall Airport on Wednesday to highlight the rising issue.

“It had a direct impact on people’s abilities to get around the country,” Van Hollen said of the 2019 shutdown issue. “Donald Trump shut down the government in his first term, and he needs to end the shutdown he ended in the second term.”

Frozen paychecks

The central, defining factor of any shutdown is the scaling back of federal services and the siloing of hundreds of thousands of federal employees. Some of those workers are deemed “essential,” meaning they still have to come to work, while others are furloughed, meaning they’ll stay at home. But both groups share the unenviable position of not being paid until the government reopens.

That reality will hit home Oct. 10, when the first round of federal paychecks will fail to go out. The most immediate impact, of course, is on those workers and their families, who will have to find alternative ways to pay bills and make ends meet. 

But the pain will also reverberate through the broader economy, as federal workers stay at home and avoid the types of routine daily purchases — lunches, cabs, haircuts — that can make local economies hum. 

The numbers are enormous. 

The White House Council of Economic Advisers has estimated that every week of the shutdown will reduce the nation’s gross domestic product by $15 billion. 

“This is resulting in crippling economic losses right now,” Speaker Mike Johnson (R-La.) warned Tuesday. “A monthlong shutdown would mean not just 750,000 federal civilian employees furloughed right now, but an additional 43,000 more unemployed Americans across the economy, because that is the effect, the ripple effect, that it has in the private sector.”

In a typical shutdown, furloughed workers receive back pay for the days lost during the impasse, providing a delayed bump in economic activity. But even that customary practice is now in question in the face of a threat from Trump’s budget office to withhold back pay for certain workers. Others, Trump has said, will be fired altogether.

The combination is sure to exacerbate a volatile economy that’s already been roiled by declining consumer confidence, sinking job creation and Trump’s tariffs. Whichever party suffers the blame for the economic strain will come under the most pressure to cave in the shutdown fight. 

Military paychecks

Pay for members of the military has been a constant talking point in past shutdowns, and that’s no different this go-around.

Military service members could miss their paychecks Oct. 15, a date front and center for lawmakers.

Johnson huddled with Senate Republicans on Tuesday during their weekly policy luncheon and told reporters afterward that he is considering having the House vote on a bill to pay troops. 

“I’m certainly open to that. We’ve done it in the past. We want to make sure our troops are paid,” Johnson said, noting one GOP member has filed legislation aimed at doing that. “We’re looking forward to processing all of this as soon as we gather everybody back up.” 

The Speaker added that the shutdown would need to end by Monday in order to process the paychecks by Oct. 15.

One problem for Johnson, though, is that the House is not slated to return until Monday at the earliest, and he has indicated that he will keep the chamber out of session until the shutdown is over.

Democrats indicated they are also worried about those impacts, but say Johnson has bigger fish to fry. 

“I’m concerned about all the impacts of a shutdown. … There’s a lot of impacts of a shutdown,” Sen. Chris Murphy (D-Conn.) said. “How on earth does Mike Johnson say anything with a straight face right now when he won’t even bring his members here to vote on anything? How does he know what he can deliver if his members aren’t even here?” 

“It’s not worth listening to anything the Speaker says until he tells his people to get back and show up for work.”

Health care factors

Democrats have made health care the lynchpin of their opposition to the Republicans’ short-term spending bill, demanding a permanent extension of enhanced Affordable Care Act (ACA) subsidies set to expire at the end of the year.

Citing that expiration date, GOP leaders have refused to negotiate on the issue as part of the current debate, saying there’s time to have that discussion after the government opens up.

“That’s a Dec. 31 issue,” Johnson told reporters Tuesday.

But there are several related factors that will surface long before Jan. 1, and they could put pressure on GOP leaders to reconsider their position in the coming weeks.

For one thing, private insurance companies that sponsor plans on the ObamaCare marketplace are already sending out rate notices to inform patients of next year’s costs. Those rates are crunched based on current law — not predictions about what Congress might do later — meaning they’re being calculated under the assumption that the enhanced subsidies, which were established during the COVID-19 pandemic, will expire Jan. 1.

That distinction is enormous: If Congress doesn’t act, the average out-of-pocket premium for patients enrolled in ObamaCare marketplace plans would jump by 75 percent, according to KFF. Those are the figures patients are already getting in the mail. And faced with drastically higher rates, many are likely to buy lesser coverage next year — or no coverage at all.

Adding to the time squeeze, the ACA’s open enrollment period begins Nov. 1, meaning patients will begin making their decisions long before GOP leaders say they’re ready to act.

“Insurers aren’t waiting around to set rates for next year,” Senate Minority Leader Chuck Schumer (D-N.Y.) warned this week. “They’re doing it right now — not three months from now.”

How The Shutdown Impacts Healthcare

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, ACA, Center for Medicare and Medicaid Services (CMS), Centers for Disease Control & Prevention (CDC), Dept of Health and Human Services (HHS), Govt Shutdown, Health Insurance Coverage Adequacy, High Premiums, Medicaid, Medical Debt, Medicare, State of the Union, Underinsured, Uninsured • Tagged , , , , • Leave a comment

https://www.forbes.com/sites/innovationrx/2025/10/08/how-the-shutdown-impacts-healthcare/

Hospitals and health systems across the country are telling some Medicare and Medicaid patients that they can’t schedule telehealth appointments due to the federal government’s shutdown, now heading into its second week. That’s because Medicare reimbursement for telehealth expired on September 30, leaving health systems with the choice of pausing such visits or keeping them going in hopes of retroactive reimbursement after the shutdown ends.

Reimbursement for the Hospital at Home program, which allows patients to receive care without being admitted to a hospital, also lapsed with the shutdown. That led to providers scrambling to discharge patients under the program or admit them to a hospital. Mayo Clinic, for example, had to move around 30 patients from their homes in Arizona, Florida and Wisconsin to its facilities.

At issue in the government shutdown is healthcare, specifically tax credits for middle- and lower-income Americans that enable them to afford health insurance on the federal exchanges set up by the Affordable Care Act. Democrats want to extend those tax credits, which are set to expire at the end of the year, while Republicans want to reopen the government first and then negotiate about the tax credits in a final budget.

The impasse has prevented the Senate from overcoming a filibuster, despite a Republican majority. Around 24 million Americans get their health insurance through the ACA, and the loss of tax credits will cause their premiums to rise an average of 75%–and as high as 90% in rural areas–and likely cause at least 4 million people to lose coverage entirely.

The government’s closure has reverberated through its operations in healthcare. The Department of Health and Human Services has furloughed some 41% of its staff, making it harder to run oversight operations. CDC’s lack of staff will hinder surveillance of public health threats. And FDA won’t accept any new drug applications until funding is restored.

When the government might reopen remains unclear. Most shutdowns are relatively brief, but the longest one, which lasted 35 days, came during Donald Trump’s first term. Senate majority leader John Thune, R-S.D., and Speaker of the House Mike Johnson, R-La., have both said they won’t negotiate with Democrats, and the House won’t meet again until October 14. Bettors on Polymarket currently expect it to last until at least October 15. Pressure on Congress will increase after that date because there won’t be funds available to pay active military members.

Government shutdown puts hospital funding in peril

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https://www.axios.com/2025/10/02/government-shutdown-hospital-funding-medicaid?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Hospitals in rural and underserved areas could lose out on billions of dollars in federal funding if the government shutdown drags on.

Why it matters: 

Many hospitals already run on tight margins and are bracing for fallout from Medicaid cuts and other changes in the One Big Beautiful Bill Act.

The big picture: 

The immediate concern is health policies that expired when government funding lapsed at midnight Tuesday. Health providers and their lobbyists expect Congress will make providers whole in an eventual funding deal and reimburse claims made during the shutdown.

  • But that’s not a given. And uncertainty about how long the shutdown will go on is leaving some of the most financially vulnerable hospitals in limbo.
  • “There’s just that underlying fear of, oh my gosh, what if they can’t come together on any agreement to open the government again, and we all get looped into it,” said Kelly Lavin Delmore, health policy adviser and chair of government relations at Hooper Lundy Bookman.

State of play: 

Safety-net hospitals face an $8 billion cut to Medicaid add-on payments in the absence of a government funding package.

  • The cuts to so-called disproportionate share hospital payments originate from the Affordable Care Act.
  • Congress has postponed the pay reductions more than a dozen times, but the most recent delay expired on Tuesday and Congress hasn’t signaled if or when it will step in.

The add-on payments are made quarterly, so hospitals may not feel immediate effects, even if Congress doesn’t further delay the cuts, according to the American Hospital Association. But state Medicaid agencies could let the cuts take place if they think lawmakers’ standoff will continue indeterminately, per AHA.

  • The uncertainty “really impacts that predictability and reliability as it relates to funding,” said Leonard Marquez, senior director of government relations and legislative advocacy at the Association of American Medical Colleges.
  • If the cuts do take effect, it would significantly hamper hospitals’ ability to care for their communities, Beth Feldpush, senior vice president of advocacy and policy at America’s Essential Hospitals, told Axios in a statement.

Additionally, two long-running programs that give pay bumps to rural hospitals expired on Wednesday.

  • One program adjusts Medicare payment upward for rural hospitals that discharge relatively few patients.
  • The other gives increased reimbursement rates to rural hospitals that have at least 60% of patients on Medicare.
  • They were designed to keep care available in communities that might otherwise not be able to support a hospital.
  • Both programs have expired in the past, only to be brought back to life with claims paid retroactively.

Zoom out: 

Hospital industry groups have also been urging Congress to extend enhanced Affordable Care Act tax credits, which have become a flashpoint in the shutdown fight. Democrat lawmakers have so far refused to pass GOP-led funding proposals that don’t include a full extension of the subsidies.

What they’re saying: 

AHA is urging Congress to find a bipartisan solution and reopen the government, a spokesperson told Axios.

  • “Patient care doesn’t go away with the loss of coverage and the loss of funding,” said Lisa Smith, vice president of advocacy and public policy for the Catholic Health Association.
  • “I just don’t know how long that’s going to be sustainable for our facilities that are really already operating on the margins.”

Responding to Trump Healthcare 2.0: Key Takeaways after 8 Months

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Responding to Trump Healthcare 2.0: Key Takeaways after 8 Months

The Trump 2.0 administration is 8-months into its MAGA agenda. Summer has passed. Schools are open. Congress is in session. Campaign 2026 is underway. The economy is slowing and public sentiment is dropping.

For U.S. healthcare, it’s more bad news than good. The challenges are unprecedented. Most organizations—hospitals, medical groups, drug and device makers, infomediaries and solution providers, insurers, et al—are defaulting to lower risk bets since the long-term for the health system is unclear.

The good news is that the health system in the U.S. is big, fragmented, complex, expensive (5% CAGR spending increases thru 2034) and slow to change. It is highly regulated at local, state and federal levels, labor intense (20 million) and capital-dependent (government funding, private investment)—a trifecta nightmare for operators and goldmine for private investors who time the system for shareholders effectively. And it operates opaquely: business practices are hidden from everyday users and bona-fide measures of its effectiveness not widely applied or accepted.

The bad news is its long-term sustainability in its current form is suspect and its short-term success is dependent on adapting to key tenets in Trump Healthcare 2.0:

  • Trump Healthcare 2.0 is about reducing federal healthcare spending so federal deficits appear to be going down to voters in the mid-term election (November 3, 2026). Healthcare, which represents 27% of federal spending is an attractive target since a significant majority of all voters (especially MAGA Republicans) are dissatisfied with its performance and think is wasteful and inefficient. It views healthcare as a market where less government, more private innovation achieves more.
  • The effect of One Big Beautiful Bill Act cuts to Medicaid and marketplace subsidies and imposition of Make America Healthy Again dogma in CMS, CDC, FDA and FCC are popular in the MAGA base while problematic to states, hospitals, physicians and insurers whose business practices and clinical accountability will be more closely scrutinized.
  • The federal courts—SCOTUS, 13 circuit and 94 district courts– will support Trump Healthcare 2.0 policy changes in their decisions favoring state authority over federal rules, enabling White House executive orders and administrative actions against challenges and departmental directives that encourage competition, price transparency and cost reduction.
  • The FTC and DOJ will pro-actively pursue actions that reverse/disable collusion, horizontal and vertical consolidation in each sector deemed to raise prices and lower choices for consumers.

In the administration’s posturing for the mid-term election November 3, 2026, it’s assumed the economy and prices will be THE major issues to voters: healthcare affordability, housing costs and food prices will get heightened attention as a result.  Thus, every healthcare organization board and leadership team should revisit short and long-term strategies, since traditional lag indicators re: utilization, regulations, structure, roles, responsibilities and funding are decreasingly predictive of the future.

Though every organization is different, there are 6 takeaways that merit particular attention as C suites and Boards re-evaluate strategies and timing:

  1. Monitor the entire economy. The healthcare is 18% of the GDP; 82% of commerce falls outside its domain. Appropriations for healthcare compete with education, defense and public safety and health; household spending for healthcare competes with housing, food and transportation costs. The healthcare dollar is not insulated from competing priorities. If, as expected, the economy slows due to slowdowns in the job market and in housing, and if cuts to marketplace subsidies are enacted, healthcare spending will quickly and significantly drop though utilization will increase.
  2. Follow clinical innovations carefully. Understand bench to bedside obstacles. The FDA will authorize 50-60 novel drugs and biologics and over 100 AI-enabled devices this year. Some will fundamentally alter care management processes; all will change costs and pricing. Those with short-term cost-reduction potential require consideration first. Given increased margin pressures, capital and operating budgets will reflect a more cautious and risk averse posture.
  3. Manage fixed costs (more) aggressively and creatively. Direct costs reduction is not enough. Facilities and administrative functions are fair game and for outsourcing, partnerships and risk sharing with suppliers, vendors, advisors and even competitors.
  4. Don’t underestimate price transparency. Prices matter. Consumers and regulator demand for price transparency from drugmakers, hospitals and insurers are inescapable. Justification and verification will be critical to trust and utilization.
  5. Navigate AI strategically. The pace and effectiveness of Ai-enabled solutions will define winners and losers in each segment. And private capital—investors, partners—will bring those solutions to market.
  6. Don’t discount public opinion. Consumer sentiment about the economy is low and dissatisfaction with the health system is high and increasing. Understanding root causes and initiating process improvement are starting points.

As I head back to DC today, the FY26 federal budget is in suspense as the GOP-controlled Senate and House debate a final version to avoid a shutdown next week.  Physicians, public health and state officials will digest last week’s ACIP vaccine advisory recommendations and issue their own directives and insurers will file their plan revisions for 2026.  That’s what lawmakers and trade groups will be watching.

But at the kitchen tables in at least 40% of America’s households, unpaid healthcare bills from hospitals, labs, doctor offices and set-aside cash for over-the-counter remedies and prescription drug co-pays are on the agenda. Student loan payments, escalating costs for groceries, housing, rent and child care and an unstable employment market are squeezing families. Budgeting for healthcare is more problematic for them than anything else because price are not accessible and charges are not known until after services are performed.

Trump Healthcare 2.0 is not transformational: it is transactional. It aims to simplify the system and facilitate changes certain to disrupt the status quo. Its locus of control, is Main Street USA. not Pennsylvania Ave, in DC.

Medicaid overhaul shifts tough choices to states

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https://www.axios.com/2025/09/19/medicaid-overhaul-states-tough-choices?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Republicans’ sweeping Medicaid overhaul has left a lot of the heavy lifting to governors and state health officials as the program launches the biggest package of changes in its 60-year history.

Why it matters: 

States working with hospitals, clinics and other providers will have to do more with less as they face about $1 trillion in program cuts and the likelihood of 10 million or more newly uninsured people from new work rules and other changes.

  • While the GOP views Medicaid as a waste-riddled program that’s due for a shakeup, the cuts will force painful tradeoffs at the local level as health systems also struggle with inflation, higher labor costs and rising medical costs.
  • “Congress left the dirty work to be done by the governors and state legislators, and that work will start very soon,” said Joan Alker, executive director of Georgetown University’s Center for Children and Families.

State of play: 

Medicaid typically accounts for about 30% of a state’s budget each year. Spending goes up during tough economic times, and states are required to cover a set of mandatory benefits.

  • The fallout from the cuts will vary by state based on their reliance on certain funding mechanisms, like taxes on health care providers, and whether they’ve expanded Medicaid coverage under the Affordable Care Act.
  • The new work requirements only apply to people in the expansion group.

The biggest changes from the law will arrive in 2027. But states have already started planning for how they’ll implement work requirements, decide who’s eligible more frequently and cope with new restrictions on how they draw down federal funds.

  • They’ll also be competing for $50 billion in rural health funding that Congress added to the law — a sum that’s been widely criticized as inadequate.
  • “We are working day and night ever since this bill was passed,” New York’s Medicaid director, Amir Bassiri, said while speaking at a conference in Manhattan in July.
  • “Chances are we will not be able to mitigate all of the impacts of these changes, but we’re going to do everything in our power to do that.”

The other side: 

The new dynamic will force states to think more critically about how taxpayer dollars are being spent in Medicaid, said Brian Blase, president of Paragon Health Institute and a White House official during the first Trump administration.

  • “I want there to be a real budget constraint so [states] have to grapple with the actual cost of these programs,” he said.

Zoom in: 

Many states were already preparing austerity moves before President Trump signed the law. States faced with Medicaid budget crunches often cut or limit benefits they aren’t required to offer, like dental care or home- and community-based services.

  • Other strategies to adjust to the new era of Medicaid funding could include reducing Medicaid payment rates for providers or finding new sources of revenue like additional taxes.
  • A big focus is how well states will track whether recipients are either meeting a requirement to complete 80 hours of work, school or community service a month or are exempt from the rules.
  • Illinois, Missouri, Montana, North Dakota, New Mexico, Utah and Wisconsin have the highest risk of improperly kicking many eligible people off of Medicaid due to procedural issues, per a recent Georgetown Center for Children and Families report.
  • The report ranked state performance on eight key metrics, including how long Medicaid centers take to answer calls, how long the states take to process new applications and whether they renew eligibility automatically.

Between the lines: 

Congress authorized $200 million in federal funds to help states modernize their infrastructure for determining whether people are eligible for Medicaid.

  • HHS communications director Andrew Nixon said $100 million of the funds will be allocated equally among states, while the other half will be divvied up based on the share of enrollees in the state that will be subject to work requirements.
  • “All funding decisions will be guided by efficiency and legal compliance,” he said in an email.

States are still waiting for guidance and regulations from Medicaid administrators on some of the policy changes, and what kinds of technology they can use to ease the burden of reporting work hours and verifying who’s eligible.

  • Even timelines for getting systems running are up in the air. The budget law gives the Centers for Medicare and Medicaid Services discretion to let states have up to two more years to get work requirements up and running.

What we’re watching: 

What role health systems and Medicaid advocates have in states’ decision-making processes — and whether they can persuade state lawmakers to make up for some of the federal cuts with state funds.

  • “We’ve always said the cuts to Medicaid are … going to impact so many other parts of state budgets, and so that’s where the fight really is,” said Nicole Jorwic, chief program officer of Caring Across Generations, a nonprofit that advocated against Congress’ health care changes.

The Future of Medicare Advantage—Assessing Current Debates and the Likelihood of Near-Term Reforms

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https://jamanetwork.com/journals/jama-health-forum/fullarticle/2837518

Privately administered Medicare Advantage (MA) has long been the subject of policy debate. To some, the once-nascent source of Medicare coverage is an important mechanism for injecting competition and innovation into the government-sponsored insurance program. To others, it represents an expensive and unnecessary alternative to directly administered traditional Medicare (TM).

After years of rapid growth, MA accounted for most program enrollments (33.6 million) and federal spending ($494 billion) in 2024.1 This has intensified some existing debates but also spurned increasing bipartisan agreements and interest in reforms. Politicians and policy experts who have historically supported MA, including some Republicans, have articulated greater openness to reforming the now-entrenched program.2 In effect, the debate has shifted from whether the MA program should be reformed to how it should be reformed and, critically, what the government should do with any savings. This Viewpoint discusses notable areas of consensus (and lack thereof) and the prospect of reforms from the Trump administration.

Areas of Growing Consensus

Several observations about MA are generally agreed upon. First, MA plans can use utilization management tools, like prior authorization, to constrain costs in ways that TM generally cannot. This reduces MA plans’ costs of covering Part A (hospital) and B (physician) benefits compared with a scenario where they imposed few constraints on utilization, like in TM. Policymakers also increasingly recognize the administrative burdens imposed on clinicians and restraints on patient access due to these tools, which have generated growing interest in reforms.

Second, and perhaps paradoxically, the federal government would spend less if all MA enrollees instead chose TM. This reflects several factors. MA plans are paid benchmark rates that are set above the fee-for-service spending in many counties. Plan payments can increase further due to the quality-bonus program. MA plans also have higher coding intensity, meaning the same beneficiary has more diagnoses recorded if they are enrolled in MA rather than TM. This increases risk scores and payments from the government (whether this reflects more accurate coding vs fraudulent behavior remains a source of debate). In addition, MA plans experience advantageous selection, meaning they attract enrollees who are relatively cheaper to cover conditional on their observable characteristics.3 All told, the Medicare Payment Advisory Commission estimates that the federal government spends 20% more (or an estimated $84 billion in 2025) than if all enrollees chose TM.1 While the exact magnitude of difference is subject to debate, the basic conclusion is not.

Third, MA plans offer more generous benefits to enrollees, including lower out-of-pocket costs and coverage of additional benefits such as vision and dental services. This occurs because plans keep a portion of the difference between their bid and the benchmark rate. These rebates average $2255 annually per enrollee, which represents 17% of all spending on MA.1

Where Disagreements Remain

While there is growing acknowledgment of the fiscal costs of the MA program, there is disagreement or uncertainty about several questions that inform an appropriate policy response. First, there is debate about how valuable some supplemental benefits are to enrollees. While it is relatively straightforward to value reductions in premiums or cost sharing in MA plans, there is limited information about how often enrollees use many of the supplemental benefits. Some research suggests that use of certain extra benefits may not be much higher in MA plans.4

Partly because of this, it is uncertain how much payment reductions to MA plans will reduce benefits and, in turn, how much that reduces enrollee welfare. Some research suggests the last dollar spent on MA plans results in much less than a dollar’s worth of additional benefits, particularly in markets with limited competition between plans.5 This suggests that reducing payments would initially lower plan profits but result in minimal welfare loss for enrollees. Even if true, it is not obvious when this tradeoff becomes more pronounced. Other research indicates the aggregate value of reduced cost sharing represents a large share of excess payments, suggesting reducing spending may quickly trigger benefit reductions.6 These effects may further depend on how policymakers chose to alter payments.

Finally, there remains significant disagreement about how to use any savings generated by program reforms. Democratic lawmakers often argue that savings should be used to increase TM benefits (eg, by adding dental benefits or imposing an out-of-pocket cap). Republicans are much more likely to pair spending reduction with policies that boost MA (eg, allowing MA plans to keep more of the savings if they bid below benchmarks). This predominantly reflects different preferences over the optimal structure of Medicare rather than empirical uncertainty.

Reform Possibilities From the Trump Administration

Many observers expect that the current administration will be relatively generous toward MA, as is typical of a Republican administration. This is particularly true given that the Centers for Medicare & Medicaid Services (CMS) administrator, Mehmet Oz, MD, has historically expressed support for MA plans. While major spending reductions may remain unlikely, early actions suggest the administration supports targeted reforms and is likely to test changes to the program’s design.

In his Senate confirmation, Oz was explicitly critical of strategic upcoding by insurers. Early policy decisions have been consistent with this view. The 2026 final payment notice for MA continues implementation of several policies that reduce MA payments. Notably, the Trump administration finalized implementation of an updated risk adjustment model that is designed to partly address coding intensity. For example, it eliminates approximately 2000 diagnosis codes that were judged to be most prone to upcoding. In conjunction with related changes, this is expected to decrease plan payment by 3.01%.7 CMS also announced the expansion of audits aimed at verifying the accuracy of diagnoses recorded by MA plans.8 This suggests the administration is willing to address strategic behavior by insurers, which they characterize as addressing waste, fraud, and abuse.8

However, the final payment notice also included higher payment increases for MA plans than was initially proposed by the Biden administration (5.06% vs 2.23%). After accounting for coding trends, realized payments are expected to increase by 7.16%. While consistent with an effort to boost MA enrollment, CMS noted that this change predominantly reflected the effects of higher-than-expected growth in per capita costs in TM, which mechanically increased payment updates. While CMS has some flexibility in payment updates, observers should use caution when using these upward revisions to infer the administration’s level of support for MA.

If the current administration is open to more novel and consequential reforms, they are likely to emerge from the Centers for Medicare & Medicaid Innovation (CMMI). While CMMI demonstration projects have historically focused on TM, the office can test changes to key features of MA that would significantly alter spending and incentives. Notably, Abe Sutton, JD, the director of the CMMI, recently highlighted the possibility of testing changes to risk scores, benchmarks, and quality measures, suggesting they are interested in taking advantage of this authority.9

With its place in the Medicare program now firmly established, MA has begun to attract more consistent interest in reform, even among Republican policymakers. This may reflect political considerations, as an unwillingness to act may provide an opportunity (and a source of budgetary savings) for future lawmakers to pursue alternative policy goals. Early signals from the Trump administration suggest they support program reforms, especially those targeting strategic behavior by insurers. Given the slim margins in Congress, it will be interesting to see if and how the administration uses CMMI’s authority to pursue substantive program changes.

The ACA Subsidy Expiration Will Hit Millions Hard

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https://healthcareuncovered.substack.com/p/the-aca-subsidy-expiration-will-hit?utm_source=post-email-title&publication_id=255152&post_id=170756440&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

When Congress passed pandemic-era enhancements to Affordable Care Act (ACA) premium subsidies in 2021, it wasn’t just a policy tweak — it was a lifeline. But unless lawmakers act, those subsidies will vanish on January 1, 2026.

According to KFF, the average ACA enrollee could see premiums spike 75% overnight. For many, that will mean a choice between things like their health coverage and rent or food. The Congressional Budget Office estimates more than 4.2 million people could lose coverage over the next decade as a result. Below is where the expired subsidies will hurt the hardest:

1. Young adults… and their parents’ wallets

Young people who’ve aged out of their parents’ plans and buy coverage through the ACA marketplaces will see some of the steepest jumps. 

If they decide to forgo coverage, as KFF Health News warns: The so-called “‘insurance cliff’ at age 26 can send young adults tumbling into being uninsured.” 

The parents and families of these young adults could be left scrambling to cover unexpected medical bills — the kind that can derail a family’s finances for years.

2. Main street entrepreneurs

The ACA is the only real option for many small-business owners, freelancers and gig workers. These are the folks that conservatives say we should encourage to build and grow their own businesses who make up the backbone of Main Street. Losing the enhanced subsidies means many will face premiums hundreds of dollars higher per month. Some will be forced to close shop and turn to jobs at out-of-town corporations flush enough to afford to offer subsidized coverage to their workers, a direct hit to local economies.

3. States already in crisis

States aren’t in a position to plug the gap. Politico reports that California, Colorado, Maryland, Washington, and others are scrambling to soften the blow, but even the most ambitious state-level plans can’t replace hundreds of millions in lost federal funding.

And this comes right after Medicaid cuts in the One Big Beautiful Bill Act that will hit hospitals, clinics and low-income communities. In Washington state alone, officials expect premiums to jump 75% when the subsidies expire, with one in four marketplace enrollees dropping coverage. That means more uninsured patients showing up in ERs, less preventive care, and more strain on already struggling rural hospitals.

4. (Already) disappearing alternatives to Big Insurance

The ACA marketplaces aren’t just a safety net for individuals but also home to smaller non-profit and regional health plans that give Americans an alternative to the “Big 7” Wall Street-run insurance conglomerates. These community-rooted plans are already facing financial headwinds from shrinking enrollment and Medicaid funding cuts. When premiums spike in 2026, many could lose enough members to be forced out of the market entirely.

And here’s the real danger: The Big 7 can weather this storm. Their huge market capitalizations, government contracts, pharmacy benefit manager (PBM) divisions and sprawling care delivery businesses give them insulation from ACA marketplace losses. In fact, they may see this as an opportunity to buy up the smaller competitors that fail, which would further consolidate their dominance over our health care system. Or they could just decide to flee the ACA marketplace entirely because the population will skewer sicker and older, creating a death spiral that the big insurers will not want to touch. What little consumer choice exists outside the big corporate insurers could vanish, and even that could disappear.

5. <65 year olds

Perhaps the most vulnerable group will be Americans in their 50s and early 60s who lose their jobs or retire early (often not by choice) and find themselves too young for Medicare but facing incredibly high premiums on the individual market. Under ACA rules, insurers can charge older enrollees up to three times more than younger adults for the same coverage. The enhanced subsidies have been the only thing keeping many of these premiums within reach.

Take those subsidies away, and a 60-year-old who loses employer coverage could see their monthly premium shoot into four figures. For those living off severance, savings or reduced income, choosing to gamble with their health and wait it out until 65 may be the only option.

Congress knows the stakes. Will they act?

Making the subsidies permanent would cost $383 billion over 10 years, which would be a political hurdle for a Congress intent on deep budget cuts. But the cost of inaction is far higher, both in human and economic terms. These subsidies have kept coverage affordable for millions, fueled small business growth, and stabilized state health systems during one of the most turbulent economic periods in recent memory. Without them, the hit to many folks could be a Frazier-level K.O.

But let’s face it — what I’m advocating for isn’t perfect either. The prospect of extending these subsidies raises a question: Should taxpayers be footing the bill for health insurance premiums when insurance corporations are reporting tens of billions in annual profits and paying hefty dividends to shareholders?

The short answer, for now, unfortunately, is yes. Because this is the deck we’ve been dealt and we can’t let Americans fall into medical debt, lose their homes – or their lives. Extending the ACA subsidies is not pretty. But for Americans, it’s just a bob and weave.

ACA premiums set to spike 

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, ACA, ACA Premiums, Deferred Healthcare, Health Insurance Coverage Adequacy, Health Policy, Healthcare Reform, High Premiums, High Prices, Medicaid, Uncompensated Care, Underinsured, Uninsured • Tagged , , , , • Leave a comment

https://nxslink.thehill.com/view/6230d94bc22ca34bdd8447c8ofavw.mnb/3a085f61

People who buy health insurance through the Affordable Care Act (ACA) are set to see a median premium increase of 18 percent, more than double last year’s 7 percent median proposed increase, according to an analysis of preliminary filings by KFF. 

The proposed rates are preliminary and could change before being finalized in late summer. The analysis includes proposed rate changes from 312 insurers in all 50 states and DC. 

It’s the largest rate change insurers have requested since 2018, the last time that policy uncertainty contributed to sharp premium increases. On average, ACA marketplace insurers are raising premiums by about 20 percent in 2026, KFF found. 

Insurers said they wanted higher premiums to cover rising health care costs, like hospitalizations and physician care, as well as prescription drug costs. Tariffs on imported goods could play a role in rising medical costs, but insurers said there was a lot of uncertainty around implementation, and not many insurers were citing tariffs as a reason for higher rates. 

But they are adding in higher increases due to changes being made by the Trump administration and Republicans in Congress. For instance, the majority of insurers said they are taking into account the potential expiration of enhanced premium tax credits. 

Those subsidies, put in place during the COVID-19 pandemic, are set to expire at the end of the year, and there are few signs that Republicans are interested in tackling the issue at all.    

If Congress takes no action, premiums for subsidized enrollees are projected to increase by over 75 percent starting in January 2026, according to KFF. 

But some states are pushing back.  

Arkansas Gov. Sarah Huckabee Sanders (R) on Wednesday called on the state’s insurance commissioner to disapprove the proposed increases from Centene and Blue Cross Blue Shield. The companies filed increases of up to 54 percent and 25.5 percent, respectively, she said.  

“Arkansas’ Insurance Commissioner is required to disapprove of proposed rate increases if they are excessive or discriminatory, and these are both,” Huckabee Sanders said in a statement.

“I’m calling on my Commissioner to follow the law, reject these insane rate increases, and protect Arkansans.”  

As Americans Struggled, Health Insurers Made a Record-Breaking $71.3 Billion in Profits

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Health Insurance Industry, Health Policy, Healthcare Reform, High Premiums, High Prices, Monopoly, Monopoly Behavior, Profit, Profit Margin, Profit Model, Profit Motive • Tagged , , , , • Leave a comment
https://healthcareuncovered.substack.com/p/as-americans-struggled-health-insurers?utm_source=post-email-title&publication_id=255152&post_id=170288533&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

Ahead of my Congressional testimony last week before the Senate HELP committee, I compiled data on the profits, revenues and CEO compensations of big health insurers in 2024. The curiosity from senators on both sides of the aisle signaled, to me, that lawmakers are as interested as I’ve ever seen in the industry’s rampant profiteering.

What I found was that the seven biggest publicly traded health insurance companies collectively made $71.3 billion in profits, up more than half a billion dollars from 2023. All while millions of Americans continued to skip their medications, rationed insulin and delayed care due to insurers’ out-of-pocket demands.

Let’s break it down.

You won’t be surprised to learn that shareholders are not the only ones benefiting from the care-restricting barriers insurers have erected to boost profits. The CEOs of those seven companies took home a combined $146.1 million in 2024 compensation. That’s enough to cover annual premiums for thousands of American families.

Here’s what the top brass made:

Meanwhile, patients across the country report increasing out-of-pocket costs, more aggressive prior authorizations and narrower provider networks. But for these executives, the real measure of success is how high they can push their stock prices and not how many people can afford to see a doctor.

So, What’s Driving the Revenue Surge?

One word: Gouging.

Insurers continued to jack up premiums for their commercial customers and overcharge the government. Despite watchdog warnings, Uncle Sam continues to pour money into private Medicare Advantage plans even as audits and investigations uncover widespread fraud and upcoding. And Medicaid managed care is a gold mine, too. These insurers now dominate state Medicaid contracts and can quietly extract billions through behind-the-scenes ownership of pharmacies, PBMs and providers.

It’s not just health insurance anymore — it’s a monopolized empire.

All that said, to the dismay of shareholders, the big seven insurers have had to admit that so far in 2025, they’ve paid more medical claims than they had expected, which means their profits were down somewhat during the first months of the year. I’ll shed more light on that in a future post. No need for you to shed any tears for them, though, because we’re still talking billions and billions in profits.

So if you’re wondering why your premiums, deductibles and costs at the pharmacy counter keep going up — just look at those 2024 numbers. We all paid more for health insurance and got less for the hard-earned money we had to shovel out for our “coverage.” 

And expect even more financial pain (and difficulty getting the care you need) as these companies do all they can to get their profit margins back to where Wall Street wants them.

Talk Is Cheap: Now Trump Must Deliver On His Healthcare Promises

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Artificial Intelligence, Artificial Intelligence Generative, Artificial Intelligence Investment Funding, Food Health, Health Policy, Healthcare Reform, High Drug Prices, Medicare Drug Price Negotiation, Obesity, Obesity Treatment, Opioid Epidemic, Outcomes, Pharmaceutical Industry, Quality, Quality Measures, Quality of Care, Quality of Life • Tagged , , , , • Leave a comment

https://www.forbes.com/sites/robertpearl/2025/06/09/talk-is-cheap-now-trump-must-deliver-on-his-healthcare-promises/

President Donald Trump has made big promises about fixing American healthcare. Now comes the moment that separates talk from action.

With the 2026 midterms fast approaching and congressional attention soon shifting to electoral strategy, the window for legislative results is closing quickly. This summer will determine whether the administration turns promises into policy or lets the opportunity slip away.

Trump and his handpicked healthcare leaders — HHS Secretary Robert F. Kennedy Jr. and FDA Commissioner Dr. Marty Makary — have identified three major priorities: lowering drug prices, reversing chronic disease and unleashing generative AI. Each one, if achieved, would save tens of thousands of lives and reduce costs.

But promises are easy. Real change requires political will and congressional action. Here are three tests that Americans can use to gauge whether the Trump administration succeeds or fails in delivering on its healthcare agenda.

Test No. 1: Have Drug Prices Come Down?

Americans pay two to four times more for prescription drugs than citizens in other wealthy nations. This price gap has persisted for more than 20 years and continues to widen as pharmaceutical companies launch new medications with average list prices exceeding $370,000 per year.

One key reason for the disparity is a 2003 law that prohibits Medicare from negotiating prices directly with drug manufacturers. Although the Inflation Reduction Act of 2022 granted limited negotiation rights, the initial round of price reductions did little to close the gap with other high-income nations.

President Trump has repeatedly promised to change that. In his first term, and again in May 2025, he condemned foreign “free riders,” promising, “The United States will no longer subsidize the healthcare of foreign countries and will no longer tolerate profiteering and price gouging.”

To support these commitments, the president signed an executive order titled “Delivering Most-Favored-Nation (MFN) Prescription Drug Pricing to American Patients.” The order directs HHS to develop and communicate MFN price targets to pharmaceutical manufacturers, with the hope that they will voluntarily align U.S. drug prices with those in other developed nations. Should manufacturers fail to make significant progress toward these targets, the administration said it plans to pursue additional measures, such as facilitating drug importation and imposing tariffs. However, implementing these measures will most likely require congressional legislation and will encounter substantial legal and political challenges.

The pharmaceutical industry knows that without congressional action, there is no way for the president to force them to lower prices. And they are likely to continue to appeal to Americans by arguing that lower prices will restrict innovation and lifesaving drug development.

But the truth about drug “innovation” is in the numbers: According to a study by America’s Health Insurance Plans, seven out of 10 of the largest pharmaceutical companies spend more on sales and marketing than on research and development. And if drugmakers want to invest more in R&D, they can start by requiring peer nations to pay their fair share — rather than depending so heavily on U.S. patients to foot the bill.

If Congress fails to act, the president has other tools at his disposal. One effective step would be for the FDA to redefine “drug shortages” to include medications priced beyond the reach of most Americans. That change would enable compounding pharmacies to produce lower-cost alternatives just as they did recently with GLP-1 weight-loss injections.

If no action is taken, however, and Americans continue paying more than twice as much as citizens in other wealthy nations, the administration will fail this crucial test.

Test No. 2: Did Food Health, Quality Improve?

Obesity has become a leading health threat in the United States, surpassing smoking and opioid addiction as a cause of death.

Since 1980, adult obesity rates have surged from 15% to over 40%, contributing significantly to chronic diseases, including type 2 diabetes, heart disease and multiple types of cancers.

A major driver of this epidemic is the widespread consumption of ultra-processed foods: products high in added sugar, unhealthy fats and artificial additives. These foods are engineered to be hyper-palatable and calorie-dense, promoting overconsumption and, in some cases, addictive eating behaviors.

RFK Jr. has publicly condemned artificial additives as “poison” and spotlighted their impact on children’s health. In May 2025, he led the release of the White House’s Make America Healthy Again (MAHA) report, which identifies ultra-processed foods, chemical exposures, lack of exercise and excessive prescription drug use as primary contributors to America’s chronic disease epidemic.

But while the report raises valid concerns, it has yet to produce concrete reforms.

To move from rhetoric to results, the administration will need to implement tangible policies.

Here are three approaches (from least difficult to most) that, if enacted, would signify meaningful progress:

  • Front-of-package labeling. Implement clear and aggressive labeling to inform consumers about the nutritional content of food products, using symbols to indicate healthy versus unhealthy options.
  • Taxation and subsidization. Impose taxes on unhealthy food items and use the revenue to subsidize healthier food options, especially for socio-economically disadvantaged populations.
  • Regulation of food composition. Restrict the use of harmful additives and limit the total amount of fat and sugar included, particularly for foods aimed at kids.

These measures will doubtlessly face fierce opposition from the food and agriculture industries. But if the Trump administration and Congress manage to enact even one of these options — or an equivalent reform — they can claim success.

If, instead, they preserve the status quo, leaving Americans to decipher nutritional fine print on the back of the box, obesity will continue to rise, and the administration will have failed.

Test No. 3: Are Patients Using Generative AI To Improve Health?

The Trump administration has signaled a strong commitment to using generative AI across various industries, including healthcare. At the AI Action Summit in Paris, Vice President JD Vance made the administration’s agenda clear: “I’m not here this morning to talk about AI safety … I’m here to talk about AI opportunity.”

FDA Commissioner Dr. Marty Makary has echoed that message with internal action. After an AI-assisted scientific review pilot program, he announced plans to integrate generative AI across all FDA centers by June 30.

But internal efficiency alone won’t improve the nation’s health. The real test is whether the administration will help develop and approve GenAI tools that expand clinical access, improve outcomes and reduce costs.

To these ends, generative AI holds enormous promise:

  • Managing chronic disease: By analyzing real-time data from wearables, GenAI can empower patients to better control their blood pressure, blood sugar and heart failure. Instead of waiting months between doctor visits for a checkup, patients could receive personalized analyzes of their data, recommendations for medication adjustments and warnings about potential risk in real time.
  • Improving diagnoses: AI can identify clinical patterns missed by humans, reducing the 400,000 deaths each year caused by misdiagnoses.
  • Personalizing treatment: Using patient history and genetics, GenAI can help physicians tailor care to individual needs, improving outcomes and reducing side effects.

These breakthroughs aren’t theoretical. They’re achievable. But they won’t happen unless federal leaders facilitate broad adoption.

That will require investing in innovation. The NIH must provide funding for next-generation GenAI tools designed for patient empowerment, and the FDA will need to facilitate approval for broad implementation. That will require modernizing current regulations. The FDA’s approval process wasn’t built for probabilistic AI models that rely on continuous application training and include patient-provided prompts. Americans need a new, fit-for-purpose framework that protects patients without paralyzing progress.

Most important, federal leaders must abandon the illusion of zero risk. If American healthcare were delivering superior clinical outcomes, managing chronic disease effectively and keeping patients safe, that would be one thing. But medical care in the United States is far from that reality. Hundreds of thousands of Americans die annually from poorly controlled chronic diseases, medical errors and misdiagnoses.

If generative AI technology remains confined to billing support and back-office automation, the opportunity to transform American healthcare will be lost. And the administration will have failed to deliver on this promise.

When I teach strategy at Stanford’s Graduate School of Business, I tell students that the best leaders focus on a few high-priority goals with clear definitions of success — and a refusal to accept failure. Based on the administration’s own words, grading the administration on these three healthcare tests will fulfill those criteria.

However, with Labor Day just months away, the window for action will soon close. The time for presidential action is now.