The healthcare industry is still licking its wounds from $1 trillion in federal funding cuts included in the One Big Beautiful Bill Act (OBBBA) signed into law July 4. Adding insult to injury, the Center for Medicare and Medicaid services issued a 913-page proposed rule last Tuesday that includes unwelcome changes especially troublesome for hospitals i.e. adoption of site neutral payments, expansion of hospital price transparency requirements, reduction of inpatient-only services, acceleration of hospital 340B discount repayment obligations and more.
The combination of the two is bad news for healthcare overall and hospitals especially: the timing is precarious:
- Economic uncertainty: Economists believe a recession is less likely but uncertainty about tariffs, fear about rising inflation, labor market volatility a housing market slowdown and speculation about interest rates have capital markets anxious. Healthcare is capital intense: the impact of the two in tandem with economic uncertainty is unsettling.
- Consumer spending fragility: Consumer spending is holding steady for the time being but housing equity values are dropping, rents are increasing, student loan obligations suspended during Covid are now re-activated, prices for hospital and physicians are increasing faster than other necessities and inflation ticked up slightly last month. Consumer out-of-pocket spending for healthcare products and services is directly impacted by purchases in every category.
- Heightened payer pressures: Insurers and employers are expecting double-digit increases for premiums and health benefits next year blaming their higher costs on hospitals and drugs, OBBBA-induced insurance coverage lapses and systemic lack of cost-accountability. For insurers, already reeling from 2023-2024 financial reversals, forecasts are dire. Payers will heighten pressure on healthcare providers—especially hospitals and specialists—as a result.
Why healthcare appears to have borne the brunt of the funding cuts in the OBBBA is speculative: Might a case have been made for cuts in other departments? Might healthcare programs other than Medicaid have been ripe for “waste, fraud and abuse” driven cuts? Might technology-driven administrative costs reductions across the expanse of federal and state government been more effective than DOGE- blunt experimentation? Healthcare is 18% of the GDP and 28% of total federal spending: that leaves room for cuts in other industries.
Why hospitals, along with nursing homes and public health programs, are likely to bear the lion’s share of OBBBA’ cut fallout and CMS’ proposed rule disruptions is equally vexing. Might the high-profile successes of some not-for-profit hospital operators have drawn attention? Might Congress have been attentive to IRS Form 990 filings for NFP operators and quarterly earnings of investor-owned systems and assume hospital finances are OK? Might advocacy efforts to maintain the status quo with facility fees, 340B drug discounts, executive compensation et al been overshadowed by concerns about consolidation-induced cost increases and disregard for affordability? Hospital emergency rooms in rural and urban communities, nursing homes, public health programs and many physicians will be adversely impacted by the OBBBA cuts: the impact will vary by state. What’s not clear is how much.
My take:
Having read both the OBBBA and CMS proposed rules and observed reactions from industry, two things are clear to me:
The antipathy toward the healthcare industry among the public and in Congress played a key role in passage of the OBBBA and regulatory changes likely to follow. Polls show three-fourths of likely voters want to see transformational change to healthcare and two-thirds think the industry is more concerned with its profit over their care: these views lend to hostile regulatory changes. The public and the majority of elected officials think the industry prioritizes protection of the status quo over obligations to serve communities and the greater good. The result: winners and losers in each sector, lack of continuity and interoperability, runaway costs and poor outcomes. No sector in healthcare stands as the surrogate for the health and wellbeing of the population. There are well-intended players in each sector who seek the moral high ground for healthcare, but their boards and leaders put short-term sustainability above long-term systemness and purpose. That void needs to be filled.
The timing of these changes is predictably political. Most of the lower-cost initiatives in both the OBBBA changes and CMS proposals carry obligations to commence in 2026—in time for the November 2026 mid-term campaigns. Most of the results, including costs and savings, will not be known before 2028 or after. They’re geared toward voters inclined to think healthcare is systemically fraudulent, wasteful and self-serving. And they’re just the start: officials across the Departments of Health and Human Services, Justice, Commerce, Labor and Veterans Affairs will add to the lists.
Buckle up.
Paul
Sections in today’s Report:
- Quotables
- Economy
- Employers
- Hospitals and Health Systems
- Insurers
- Physicians
- Population Health
- Regulators
Quotables
Bobby Mukkamala, MD, President, American Medical Association on ‘Big Beautiful Bill’: “When you reduce access to affordable health insurance, you create a future where Americans can’t get the timely care they need, contributing to poorer health outcomes. Low-income patients will lose access to preventive services and screenings. What might have been a treatable condition could become more serious or even life-threatening when care is delayed. By erecting barriers that make it harder for patients to get the care they need to diagnose, prevent, or manage a chronic condition in the early stages, we increase the risk of more severe health complications and rising costs over time.
This will be challenging not only for low-income families and working adults, but also for physicians and our health system at large. It will shift the costs and burdens to provide uncompensated care to the states, and specifically to physicians and hospitals, at a time when rural hospitals and physician practices are struggling to keep their doors open amid rising practice expenses and two decades of declining Medicare reimbursement. Even those with insurance will feel the effects of these added financial pressures. The full impact of these cuts may not be immediately apparent, given the phase-in of budget reductions, but the cuts are coming unless Congress reverses course.”
AMA President: Healthcare Cuts Have Left Us with Few Options | MedPage Today July 17, 2025
Bloomberg on MAHA (Make America Healthy Again): “MAHA would make a lot more sense without the “A” for “Again.” Because there is no past era in which we were paragons of health, no Eden to which we can return. A journey into history shows that public-health officials have long scared people about malnutrition, overnutrition, fat, cholesterol, germs, spices and most new foods introduced by immigrants — often claiming to follow the science. Influencers of various stripes have pushed back, sometimes to later be vindicated and other times to be remembered as quacks
In the late 19th century, nutrition experts told consumers to load up on bread and pork but avoid produce — not enough calories. In the early 20th century, trans-fat-laden Crisco was peddled as a healthy alternative to lard, and by the 1950s fat anxiety had given cereal its own health halo. All of these missteps, writes F.D. Flam, expose a truth missing from Robert F. Kennedy Jr.’s Make America Healthy Again campaign: There is no past era in which Americans had health figured out. The MAHA movement is right to be skeptical of mainstream nutritional advice, but wrong to take science’s setbacks as evidence that it isn’t working.
MAHA Would Make More Sense Without the ‘A’ – Bloomberg
Axios on Gen Z receptivity to anti-establishment views: “A new wave of teen influencers is gaining followers by touting ideas central to Robert F. Kennedy Jr.’s public health movement, adding a Gen Z edge to a following that’s trended toward wellness entrepreneurs and so-called MAHA moms.
The distrust of Big Pharma and antiestablishment health messaging may create a convenient gateway into conservative politics for adolescents and young adults. Youth influencers are driven in part by concerns about chronic disease they see in their parents. The New York Times has even dubbed them “crunchy teens” for their embrace of natural living.”
Gen Z influencers give RFK Jr.’s movement new edge
Johnson on health system: “America’s healthcare system isn’t broken. It’s doing exactly what it was designed to do: maximize revenue within a fragmented, fee-for-service framework. That’s the problem. For the better part of the past decade, I’ve written about what it will take to fix that system, not with one-time policy Band-Aids or silver-bullet technologies, but with fundamental redesigns that align incentives, elevate patients and build accountability into care delivery…The U.S. health economy is complex, yes. But complexity should not excuse dysfunction. It should demand clarity.”
The Big Fix: Clear Thinking for a Healthier Future 4Sight Health David Johnson
Economy
June CPI report: Tuesday, the U.S. Bureau of Labor Statistics released its June 2025 CPI report: highlights:
- Inflation accelerated slightly in June, with the Consumer Price Index(CPI) rising 0.3% on a seasonally adjusted basis. The year-over-year inflation rate reached 2.7%, up from 2.4% in May, signaling renewed price pressures across key categories.
- Shelter increased 0.2% in June: rent index rose 0.2%, while owners’ equivalent rent increased 0.3% bringing shelter up 3.8% over the past year.
- “Health care prices continued to edge upward. The medical care services index rose 0.6% in June, with hospital services up 0.7% and physician services up 0.2%. The medical care commodities index increased 0.1% on the month. Year over year, medical care services have risen 3.4% hospital services 4.2% and physician services 3.0%.”
Consumer Price Index – June 2025
June Retail sales report: Thursday the Commerce Department reported retail sales rose 0.6% last month to $720 billion after dropping by almost a full percentage point in May. Spending increased at home improvement stores, apparel shops, bars and restaurants and auto retailers but less in furniture, electronics and department stores.
Advance Monthly Sales for Retail and Food Services https://www.census.gov/retail/sales.html
WSJ economist poll: “On average they put the probability of recession in the next 12 months at 33%, down from 45% in April, but higher than January’s 22%. The survey gathered responses from 69 economists at outfits ranging from Wall Street banks to universities to small consulting firms from July 3-8. Not every forecaster answered every question.”
Economists See Lower Recession Risk and Stronger Job Growth: WSJ Survey – WSJ
S&P: Bankruptcy filings hit 15 year high: “The total number of larger U.S. corporate bankruptcy petitions filed this year through June rose to 371, up about 11% from 335 in the year-earlier period, according to a report from S&P Global, which tracks companies with public debt and assets or liabilities of at least $2 million or private companies with assets or liabilities of at least $10 million at the time of filing. That volume is the highest for the first half of the year since 2010, which saw 468 petitions, and signals that 2025 could be one of the busiest years for bankruptcy filings in over a decade, according to the report.
“Corporate liquidity has largely worsened in 2025 as debt levels for many companies have risen and the U.S. Federal Reserve is poised to hold benchmark interest rates at their current level through the summer. Consumer spending, meanwhile, is straining under the weight of a cooling job market, inflation still above monetary policymakers’ targets and the Trump administration’s tariffs,” S&P states in the report.
US corporate bankruptcies hit 15-year H1 high: S&P | CFO Dive
The declining housing market: “Beneath the surface of a broadly cooling but stable housing market, early signs of financial stress are emerging among subsets of homeowners. Pockets of vulnerability can be seen in rising negative equity, increased use of mortgage products that improve short-term affordability, and exposure to student loan debt.” Three key indictors:
- Softening home prices expand from the Sunbelt to Western states, driving increased negative equity. According to ICE’s Home Price Index, annual home price growth slowed to 1.3% in early June, and 30% of the largest markets have seen prices dip by at least a full percentage point from their recent highs. While this deceleration may help affordability, it could potentially weaken the equity positions of borrowers who purchased more recently, particularly those using FHA and VA loans, which are low down payment products. Nationally, one in four seriously delinquent loans would be in a negative equity position if sold at distressed (REO) prices. In certain markets, the figures are more pronounced: in Cape Coral, Fla., 27% of all 2023 and 2024 vintage loans are now underwater, while in Austin, Texas, the rate is 18% among 2022 vintage loans.
- ARM and temporary buydown usage reflect affordability pressure: More than 8% of borrowers financed homes with ARMs or temporary buydowns this year, which reduce monthly payments in the first years of the loan. While these loans provide short-term relief, they may introduce future payment shock, particularly if interest rates remain elevated or reset higher.
- Student loan delinquency greatly increases mortgage delinquency risk: The return of both payments and collection efforts on defaulted federal student loans, which resumed in May after a five-year pause, may put additional financial strain on some homeowners. Analysis of ICE McDash data and ICE Tradelines data powered by TransUnion shows that nearly 20% of mortgage holders also carry student loan debt. Among FHA borrowers, that number rises to nearly 30%. Borrowers delinquent on student loans are four times more likely to be delinquent on their mortgage.
Related: Weekly U.S. mortgage applications dipped 10% for the week ending July 11 as the economy becomes more turbulent and mortgage rates rise, according to a survey published Wednesday. Refinancing and purchasing applications also dropped 7% and 12% respectively, according to the Mortgage Bankers Association’s Weekly Mortgage Applications Survey. The rates are seasonally-adjusted and are compared to the week prior.
ICE Mortgage Monitor Finds Some Early Signs of Stress for Homeowners – MBA Newslink
Weekly mortgage applications dip 10% amid climbing rates
Employers
McKinsey on employer benefits changes: “Employers are the largest purchasers of health insurance in the United States, representing approximately 165 million lives and more than $800 billion in healthcare expenditures. Large employers—those with more than 10,000 employees—are often innovators when it comes to benefit offerings, shaping the trends that are later adopted by small and medium-size employers…. They account for $16 billion to $24 billion in potential revenue for healthcare partners, including health insurance plans, healthcare professionals, and other healthcare companies.
Today’s market forces are creating a paradigm shift in how employers deliver health benefits. Companies want to provide best-in-class benefits offerings for their employees to attract, care for, and retain top talent…McKinsey’s 2024 National Employer Health Benefits Survey surveyed 1,659 employer benefits decision-makers, including C-level executives and HR or benefits leaders, on their priorities and view of the market. Our survey suggests that in the coming years, employers will seek to create best-in-class benefits programs by choosing healthcare partners that seek opportunities to improve offerings year-round, have a detailed understanding of customers and their business goals, and take an innovative approach to value-driven pricing models.
Transforming employer health benefits: Large employers’ activist role | McKinsey June 26, 2025
PWC on cost increases: Per the PricewaterhouseCoopers’ Health Research Institute forecast released last Thursday, healthcare costs are expected to increase by 8.5% in 2026 due to policy changes, drug costs, higher rates of behavioral health claims and increased use of artificial intelligence.
PricewaterhouseCoopers’ Health Research Institute based its forecast published Thursday on policy changes, expensive medications including glucagon-like peptide agonists, higher rates of behavioral health claims and increased use of artificial intelligence, among other factors.
For PwC’s annual report, researchers spoke with actuaries at 24 different health insurers covering 125 million employer-sponsored members and 12 million Affordable Care Act members to forecast healthcare inflation. In addition to the predicted 8.5% jump in costs for the group market, the consultancy projected a 7.5% increase for the individual market.
Behind the numbers 2026: No let up in sight. Medical cost trend set to grow at 8.5%. Is your playbook ready? https://www.pwc.com/us/en/industries/health-industries/library/behind-the-numbers.html July 16, 2025
Mercer employer survey: Mercer surveyed 504 large employers on their employee benefit strategies in April 2025. Highlights:
- Large employer healthcare costs rose by 4.5% in 2024, and employers expect their costs to rise by 5.8% on average in 2025. Prescription drug costs rose by 8% in 2024, down slightly from 8.6% in 2023.
- 51% of employers said they are likely or very likely to make plan design changes that will shift more cost sharing to employees in 2026. This number is slightly higher than last year, when 45% of employers said they were likely to shift more costs to employees.
- A handful of large employers, 12%, offer free employee-only coverage in at least one health plan. More employers, 37%, offer a medical plan with no or a low deductible.
- A small number of large employers, 4%, offer no or low-interest loans for medical expenses, and 7% provide larger HSA contributions to employees with lower incomes.
More employers are considering high-performance networks and other nontraditional plan offerings. Currently, 18% of employers use a national carrier high-performance network, and 24% are considering adding these networks in 2026 or 2027. - Managing cost for GLP-1 medications was the top prescription benefits concern for employers. More than three-fourths of employers rated managing the cost of these drugs as extremely or very important. Employers were more likely to say they will add coverage for GLP-1 drugs than to drop it.
Employers Will Likely Reduce Health Benefits in 2026, New Mercer Survey Reveals https://medcitynews.com/2025/07/health-benefits-mercer-costs/July 17, 2025
Hospitals and Health systems
Vizient 10-year utilization projections:
- Outpatient and oncology volumes to grow by 18% respectively with a 20% bump in outpatient surgeries;
- CV, oncology, neuro, and behavioral will be the main specialty volume drivers over the coming decades as ortho continues a solid, yet decelerating trajectory;
- Inpatient to grow by 5% and including an expected headwind in GLP-1s on diabetes volume
- 31% growth in post-acute care (home health, SNF, IRF, LTACH, IPF, behavioral, PT, home care, etc.) with an expected emphasis on the growth of home health
Vizient 10-year utilization projections
Study: Health system owned MA plans: Enrollment in MA plans linked to health systems increased by 54.1%, from 2.6 million in 2016 (the first year of our data) to 4.0 million in 2022. During the same period, MA enrollment in plans not linked to health systems grew even more rapidly, increasing 71.6% from 15.3 million to 26.3 million. As a result, the percentage of MA enrollees in system-owned plans decreased slightly during that six-year period from 14.5% to 13.2%. The overall number of systems offering plans has stayed relatively stable (74 in 2016 and 77 in 2022). The analysis showed:
- Systems With MA Plans Are Larger, Span Multiple States, And Have Higher Teaching Intensity Than Systems Without MA Plans
- System-Owned MA Enrollment Is Concentrated In A Few Systems: Enrollment in system-owned MA plans is concentrated in less than 3% of systems: Kaiser Permanente alone made up nearly half of all enrollment in system-owned MA plans in 2022 (see exhibit 3), down from a little more than half in 2016 (not shown). More generally, 15 systems comprised 87.8 percent of all enrollment in system-owned plans in 2022 (compared with 88.3 percent in the top 15 systems in 2016).
Health System Ownership of Medicare Advantage Plans Has Increased Over Time | Health Affairs
Study: obstetrical care in hospitals: Researchers analyzed changes in the incidence of hospital obstetric services between 2010–22. Results:
“Seven states (13.7%) had 25% or more of their hospitals lose obstetric services by 2022. In five states (9.8%), 25% or more of their urban hospitals lost obstetric services. The problem was more pronounced in rural areas, with twelve states (25.5%) experiencing 25% or more losses of obstetric services among hospitals in rural counties.
Geographically, we found that obstetric care losses differed across states Delaware, Utah, and Vermont experienced no obstetric service losses between 2010 and 2022. In other states, more than a quarter of hospitals with obstetrics closed these services (Iowa; Oklahoma; Pennsylvania; Rhode Island; South Carolina; Washington, D.C.; and West Virginia). Hospitals in both rural and urban areas lost obstetric services, and by 2022, eight states had more than two-thirds of rural hospitals without obstetric services (Alabama, Florida, Illinois, Mississippi, Nevada, North Dakota, Oklahoma, and West Virginia)
Study: association of electronic health record (EHR)–based interventions and hospital readmissions: “This systematic review and meta-analysis of 116 randomized clinical trials with 204 523 participants found that EHR-based interventions were associated with reduced risk of 30-day and 90-day all-cause readmission by 17% and 28%, respectively.
These findings highlight the potential for leveraging EHR systems to improve patient and health system outcomes, but further research is required to understand which components of EHR interventions drive their effectiveness and for whom.”
Joint Commission streamlines accreditation requirements: Last week, the Joint Commission announced it is streamlining its accreditation standards, as eliminating 714 requirements.
Its revised Accreditation 360 program goes into effect Jan. 1 and will include 14 updated National Performance Goals: Right Patient, Right Care; Culture of Safety; Emergency Management; Excellent Health Outcomes for All; Infection Prevention and Control; Pain Management; Patient Rights; Suicide Risk and Reductions; Safe Transplant Practices; Waved Testing; Workplace and Patient Safety; Staffing; Imaging Safety; and Medication Management.
Joint Commission www.jointcommission.org
Investigative report: Rehab company partners with NFP systems to generate profit: “Encompass, which owns 168 hospitals and admitted 248,000 patients last year, has led the transformation of this niche industry. In 2023, stand-alone for-profit medical rehabilitation hospitals overtook nonprofits as the places where the majority of annual patient admissions occur, a KFF Health News and New York Times analysis found. A third of all admissions were to Encompass hospitals. Such facilities are required to provide three hours of therapy a day, five days a week.
Across the nation, there are now nearly 400 stand-alone rehab hospitals, the bulk of which are for-profit. These hospitals collectively generate profits of 10%, more than general hospitals, which earn about 6%, and far more than skilled nursing homes, which make less than 0.5%, according to the most recent data from the Medicare Payment Advisory Commission, an independent congressional agency.
At the same time, the number of small, specialized units within acute care hospitals — where most rehab used to be provided — has dwindled. There are now around 800 of those, and most are nonprofits.”
Even Grave Errors at Rehab Hospitals Go Unpenalized and Undisclosed – KFF Health News
Insurers
KFF Study: Medicare Advantage market concentration: “Enrollment in Medicare Advantage, the private plan alternative to traditional Medicare, has increased steadily since 2010. The average beneficiary has access to 34 Medicare Advantage plans with prescription drug coverage in 2025, double the number available in 2018. On average, Medicare beneficiaries have access to plans offered by 8 firms, a slight increase from 2018. One goal of offering Medicare coverage through private plans is to leverage competition with the idea that insurers will compete to provide better benefits and lower costs to attract and retain enrollees. However, recent analysis finds that Medicare Advantage markets are highly concentrated, suggesting that the growth in enrollment and plan availability has not occurred in the context of a competitive market…
- Virtually all counties were highly concentrated (79%) or very highly concentrated (18%) in 2024.
- Medicare Advantage markets were more concentrated in rural counties than in urban counties: 39% of the most rural counties were very highly concentrated in 2024 compared with 15% of rural counties that were near urban areas and 6% of urban counties.
- Nine in ten (90%) Medicare beneficiaries lived in a county where at least half of all Medicare Advantage enrollees were in plans sponsored by one or two insurers in 2024.
- In more than four in ten counties (44%), comprising 22% of all Medicare Advantage enrollment, a single Medicare Advantage insurer had at least 50% of enrollment in 2024, including 22% of counties where UnitedHealthcare had at least 50% of enrollment and 10% of counties where Humana had at least 50% of enrollment. Some large counties where one insurer had at least 50% of enrollment include Dallas County, Texas (55%), Salt Lake County, Utah (52%), and Milwaukee County, Wisconsin (64%)
Most Medicare Advantage Markets are Dominated by One or Two Insurers | KFF
Report: UnitedHealth Group profile: From schedule Y filings from 2010-2024:
- As of the third quarter of 2024, UnitedHealth Group was composed of 2,694 subsidiaries across a broad range of sectors and categories.
- According to the Sunlight report, many of UnitedHealth’s subsidiaries appear to have no assets, operations, or employees, instead serving as holding companies that can facilitate M&A or manage international services. The company also has many international entities, making it difficult for U.S. regulators and consumers to see a full picture of the company’s structure and finances. UnitedHealth has entities headquartered in 17 countries, including in the United Kingdom, India, China, Chile, Peru, the Netherlands and Canada.
- UnitedHealth Group is composed of two core entities: UnitedHealthcare (insurance) and Optum (health services). At the end of 2024, the company had more than 400,000 employees globally, and reported revenue of more than $400 billion.
Read the Report | Sunlight Report on UnitedHealth Group
Fitch lowers outlook on health insurers: “We expect the potential adverse effects on acuity in the Medicaid and ACA exchange pools to outweigh the revenue impact to insurers from OBBBA and the expiration of the enhanced PTCs. Medicaid enrollees who lose coverage due to unmet work requirements will likely be healthier than average due to the 19–64-year age range and the stipulation that they be ‘able bodied’. If enhanced PTCs are allowed to expire, ACA exchange premium rates are likely to increase significantly. As a result, healthier individuals who need coverage less may be more likely to forego coverage, leading to higher acuity in the ACA pools.
A curb on provider taxes will further weaken Medicaid funding, which already generates very thin margins for insurers. Provider taxes that states levy on hospitals and other healthcare providers to trigger federal matching funds will gradually be reduced to a 3.5% cap in expansion states from 6% of healthcare providers’ net patient revenue. This will shift a higher proportion of overall Medicaid funding to states.
Last month we lowered the outlook for the U.S. Health Insurance sector to ‘deteriorating’ from ‘neutral’ to reflect cuts to government-funded healthcare programs, primarily Medicaid, incorporated into OBBBA and higher growth in healthcare utilization. The outlook change also reflects the sunset of enhanced PTCs at YE 2025, barring an increasingly unlikely extension. These credits provide significant financial assistance to eligible individuals to obtain health insurance coverage on ACA marketplace exchanges. Now that these subsidies are effectively expiring at year-end, health insurers will begin facing the adverse consequences to premium revenue over the next 12 months.”
US Health Insurers Face Medicaid Revenue, Cost Headwinds Fitch July 14
Prescription drug denials: An analysis of more than 4 billion claims found that prescription drug denials by private insurers jumped 25% from 2016 to 2023.
Heath Insurers Are Denying More Drug Claims, Data Shows – The New York Times
Politico on insurers: “Insurers face a number of pressures that could lead to a jump in out-of-pocket health costs for Americans: cuts to Medicaid, federal policy changes that could hit Obamacare enrollment and medical costs rising faster than expected…
Several health insurers were already on unstable financial footing even before President Donald Trump signed into law the “big, beautiful bill” — which could lead to millions of people losing coverage. The looming changes now create more uncertainty that could lead to a downturn for the health insurance industry and a jump in premiums for Americans purchasing coverage…
The Congressional Budget Office estimated that an earlier version of the “big, beautiful bill,” combined with the expiration of the enhanced Obamacare subsidies at the end of this year and new Trump administration Affordable Care Act policies that make it more difficult to enroll…
So far, few Republican lawmakers have expressed interest in extending the subsidies, which CBO has estimated at $335 billion over 10 years…”
Choppy waters ahead for health insurers – POLITICO
Peterson Tracker: marketplace insurer premium increases: ACA Marketplace insurers are proposing a median premium increase of 15% for 2026 rate filing—the largest hike since 2018.
Across the 105 ACA Marketplace insurers in 19 states and DC that have submitted rate filings to date, most are requesting premium increases of 10% to 20% for 2026, and more than a quarter are proposing premium increases of 20% or more. Reasons cited are: 1-Expiration of premium tax credits at the end of 2025 accounting for overall premium increase by 4% and 2-Tariffs could drive up the cost of some drugs, medical equipment, and supplies by 3%.
Study: Health insurance affordability: “The Affordable Care Act (ACA) led to dramatic declines in the share of Americans who lack health insurance coverage. According to the Census Bureau, the nonelderly uninsured rate fell from 16.7% in 2013 to 9.4%in 2023. Yet, many with health insurance are underinsured; that is, they could have difficulty paying their share of medical costs because those costs are high relative to their income. The Commonwealth Fund estimates that 23 % of working-age adults with insurance were underinsured in 2024 and that 14% of the underinsured had coverage purchased in the Marketplace or the individual market—this despite low-income enrollees’ eligibility for cost-sharing subsidies in the individual Marketplace.
Health Insurance Affordability: Balancing Premiums and Out-Of-Pocket Costs | Health Affairs
Study: increased use of GLP-1s after AAP guideline updated: After the American Academy of Pediatrics issued its updated guidelines for obesity treatment in 2023, prescriptions immediately jumped for medications like GLP-1s, and continued to climb each month while rates for nutrition counseling saw minimal increases. That’s according to a peer-reviewed pre-print of a study that will be published in the AAP journal Pediatrics Open Science. Using electronic health records for more than 310,000 patients ages 8 to 17, the researchers found that there was a 65% immediate increase in medication prescriptions, with 5% increases monthly afterward.
In 2023, many clinicians and researchers told STAT that the AAP’s guidelines were out of touch with reality, as they recommended treatments that are inaccessible to most patients who need them, like intensive behavior and lifestyle treatment. In interviews, the guideline authors repeatedly pointed to this type of care as the basis for obesity treatment, as opposed to surgery or medication.
Population Health
Pew: fertility rates falling: “In 2023, the general fertility rate declined by 10.6% nationally to 54.5 from the 2011-20 average of 61. This means that approximately six fewer babies were born per 1,000 women in 2023 than over the decade ending in 2020.
Fertility rates fell in every state in 2023. Utah’s rate declined the most, by 20.8%, followed by New Mexico (-17.7%), Montana (-17.5%), Oregon (-17.2%), and Nevada (-17.2%). On the other end of the spectrum was New Jersey with a 4.2% drop—an almost five-times-smaller decline than Utah’s. Connecticut (-4.3%), Tennessee (-4.4%), and Alabama (-5.8%) also experienced some of the smallest decreases in 2023 compared with the pre-pandemic decade.
Regionally, the West recorded particularly steep drops, with a median decline of 16.4%. In fact, nine of the 10 states with the largest decreases were in the West.”
How Record-Low Fertility Rates Foreshadow Budget Strain | The Pew Charitable Trusts
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Regulators
CMS Proposed Rule: The 913-page proposed rule issued last Tuesday by CMS covers a range of proposed changes for 2026: Highlights:
- Outpatient rates: Hospital outpatient departments and ambulatory surgical centers would receive a 2.4% reimbursement increase next year (3.2% hospital market basket increase minus a 0.8% productivity adjustment). Last year, they received a 9% payment hikeunder the Outpatient Hospital Prospective Payment System and Ambulatory Surgical Hospital Prospective Payment System final rule for 2025.
- Transparency: Hospitals would have to disclose detailed ranges of the rates they negotiate with health insurance plans, known as “allowed amounts,” in machine-readable files including the 10th percentile allowed amount, the median allowed amount and the 90th percentile allowed amount, and underlying data used to the calculations.
- Site neutral payments: Hospitals offering outpatient drug administration would get paid the same amount that Medicare reimburses physicians for providing those services and the “inpatient only list,” of 1731 codes will be phased out over three years starting in 2026.
- Star ratings: Hospitals that receive safety scores in the lowest quartile would be ineligible for overall five-star ratings under the proposed rule. From 2027 onward, hospitals with poor safety scores would see their final ratings docked one star.
- Emergency care: The agency proposed adding an emergency care access metric to the outpatient quality-reporting program. Three health equity measures, a healthcare personnel COVID- until recouping $7.8 billion in overpayments made between 2018 and 2022 — a process estimated to extend through 2041. However, CMS now plans to up the pay cut to 2% in 2026, shortening the repayment timeline to 2031. 19 vaccination measure and two discharge measures would be removed.
- In the 340B Final Remedy Rule, CMS finalized a change to the OPPS conversion factor for non-drug items and services starting in 2026. Initially, a 0.5% pay cut was set to remain in place
Proposed rule: Medicare and Medicaid Programs: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems; Quality Reporting Programs; Overall Hospital Quality Star Ratings; and Hospital Price Transparency 2025-13360.pdf
CMS: Duplicative enrollment in 2024: “The Centers for Medicare & Medicaid Services (CMS) continue to crush fraud, waste, and abuse in America’s healthcare programs by stopping duplicative enrollment in government health programs, with the potential to save taxpayers approximately $14 billion annually.
A recent analysis of 2024 enrollment data identified 2.8 million Americans either enrolled in Medicaid or the Children’s Health Insurance Program (CHIP) in multiple states or simultaneously enrolled in both Medicaid/CHIP and a subsidized Affordable Care Act (ACA) Exchange plan.
Over the past several months, software engineers collaborated with CMS to examine historical program enrollment data and found that in 2024 an average of 1.2 million Americans each month were enrolled in Medicaid/CHIP in two or more states and an average of 1.6 million Americans each month were enrolled in both Medicaid/CHIP and a subsidized Exchange plan. “
CMS Finds 2.8 million Americans Potentially Enrolled in Two or More Medicaid/ACA Exchange Plans Unnecessary, Duplicate Enrollment Wasting $14 Billion Annually www.hhs.gov/news July 17, 2025
DHS-CMS agreement gives Immigration and Customs Enforcement (ICE) officials access Medicaid files: Last Monday, ICE finalized an agreement with DHS that will allow it access to enrollee personal information (addresses, ethnicity, et al) in an effort to identify illegal immigrants receiving health services thru the program.
The information will give ICE officials the ability to find “the location of aliens” across the country until September 9.
ICE officials to be given access to Medicaid recipients’ personal data | STAT
Eligibility for OBBBA Rural Health fund: The One Big Beautiful Bill Act (OBBBA) included $50 billion to assist states in mitigating rural health risks from the law’s cuts to Medicaid. States will apply for funding through the Rural Health Transformation Program (RHTP) submitting plans to address needs with innovative solutions that lend to long-term solvency and efficient operations. CMS will approve state proposals that address at least three of these initiatives:
- Improved prevention and chronic disease management through data-driven treatment
- Hospital and other provider payments
- Development of consumer-facing, technology-driven chronic disease management and preventative care programs
- Adoption of remote monitoring, robotics or artificial intelligence to improve care delivery in rural hospitals
- Clinician recruitment and retention, including five-year employment commitments
- Infrastructure for technology designed to improve efficiency, enhance cybersecurity or improve care quality
- Assistance to help rural communities right-size their organizations by identifyingnecessary preventative, ambulatory, emergency, inpatient, outpatient and post-acute service lines
- Supporting substance abuse and mental health treatment
- Expanded value-based care models
- Increasedaccess to high-quality rural health services, as determined by CMS
In addition, states may not use more than 10% of their funding for administrative expenses and must report annually to CMS
Note: Last week, Sen. Josh Hawley introduced legislation to double funding for the RHTP.
…Impact of Rural Transformation Fund on potential federal Medicaid cuts https://www.ruralhealth.us/blogs/2025/06/federal-medicaid-cuts-imperil-rural-%E2%80%93-impacts-of-the-rural-transformation-fund
