More employers considering medical, pharmacy vendor switch amid rising healthcare costs, survey finds

By Rebecca Pifer Parduhn – Employers are frustrated with having to eat healthcare costs that continue to rise for no sensible reason, and more are considering switching insurance or pharmacy benefits providers as a result, according to a new survey of major U.S. purchasers. Changing vendors can be a formidable undertaking for employers, given the costs and efforts associated with switching. But employers are open to much more aggressive action to curb growing healthcare spending, according to the Purchaser Business Group on Health, a nonprofit coalition representing 40 of the largest healthcare purchasers in the U.S. that together spend more than $350 billion each year on coverage for 21 million workers and their families. Read Full Article...

HVBA Article Summary

1. Employer RFP Activity Signals Increased Market Shopping: A growing share of employers are reevaluating their health benefits, with 37% issuing requests for proposals (RFPs) for medical coverage this year compared to 12% in 2024. Pharmacy benefit RFP activity has also risen slightly, from 20% to 23%, indicating continued scrutiny of vendor arrangements. This shift reflects a broader trend of employers taking a more active role in selecting and managing their healthcare partners.

2. Rising Healthcare Costs Drive Strategic Changes: Employer healthcare spending is projected to increase by 6% to 8% this year, driven by factors such as high pharmaceutical costs, chronic conditions, and provider consolidation. In response, employers are pursuing cost-control strategies including renegotiating contracts, switching vendors, and potentially shifting more costs to employees. These efforts underscore the financial strain on employers and the balancing act between managing expenses and maintaining access to care.

3. Shift Toward Transparent and Non-Traditional PBM Models: Employers are expressing growing dissatisfaction with traditional pharmacy benefit managers like CVS Caremark, Express Scripts, and Optum Rx, citing concerns over hidden fees and lack of transparency. As a result, more employers are adopting alternative approaches, with 27% now using non-traditional PBMs compared to 16% in 2024. Transparency in pricing and data access has become a key priority, reinforced by employer demand and recent policy initiatives.

Rising ACA Costs Leave Many Unable To Pay for Coverage

By HealthDay Staff – Higher health insurance costs are forcing some people to walk away from coverage even after signing up. About 14% of people who enrolled in Affordable Care Act (ACA) plans for 2026 did not pay their first monthly premium, according to a new analysis from Wakely Consulting Group, an actuarial firm. That’s much higher than the usual early-year drop-off, which is typically in the mid-single digits. “It’s a big drop,” Michelle Anderson, a consulting actuary at Wakely, told The Wall Street Journal. Read Full Article...

HVBA Article Summary

1. Premium Increases Following Subsidy Expiration: The expiration of expanded federal subsidies has contributed to sharp premium increases for many Affordable Care Act (ACA) enrollees. As costs rise, enrollment has declined from over 24 million to about 23 million in 2026, with additional losses expected if individuals fail to make payments during grace periods. This underscores how policy changes directly influence affordability and participation in health insurance markets.

2. Consumers Shift to Lower Coverage or Go Uninsured: Higher premiums are prompting some individuals to seek cheaper, less comprehensive plans or drop coverage entirely. Patient examples show substantial cost increases that limit affordable options, particularly for older adults or those with prior health conditions. These decisions may expose individuals to greater financial and medical risk due to reduced or absent coverage.

3. Market Risk Pool Shifts and Future Cost Pressures: Rising costs are changing the composition of the insured population, as younger and healthier individuals are more likely to leave the market. Data indicates that those maintaining coverage tend to have higher expected medical costs, which can lead insurers to raise premiums further. This dynamic varies by state but may contribute to ongoing affordability challenges and declining enrollment nationwide.

EBSA chief shares his family's fight for mental health coverage

By Allison Bell – The man in charge of the U.S. Department of Labor agency that oversees employee benefits that he has a personal stake in enforcing federal behavioral health parity standards. Daniel Aronowitz, the assisted Labor secretary who serves as administrator of the Employee Benefits Security Administration, said Thursday at a hearing organized by a House Education & Workforce subcommittee that his two children have been in eight different residential treatment facilities. "Only one of them was paid for, and then, retroactively, the insurance company said it was no longer medically necessary, and then my appeal rights were taken, even though I hadn't used them," Aronowitz said. "So, I have significant personal experience with this. EBSA is 100% committed to knocking down every possible barrier to mental health." Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Personal Experience Drives Policy Focus: Daniel Aronowitz, the EBSA chief, shared his family's direct struggles with mental health coverage, highlighting the challenges many face in accessing necessary treatment. His testimony underscores the real-world impact of insurance denials and retroactive coverage changes, which can leave families without recourse. This personal connection appears to inform his agency's commitment to improving mental health parity enforcement.

2. EBSA's Enforcement and Regulatory Priorities: The Employee Benefits Security Administration is shifting its focus from burdensome comparative analyses to addressing practical barriers such as claim denials, medical necessity disputes, and so-called "ghost networks" where listed providers are not actually available. The agency is also working on a final rule for the No Surprises Act dispute resolution process, acknowledging ongoing complaints from both providers and payers about fairness and payment collection. Aronowitz emphasized a preference for supporting employers in compliance rather than resorting to litigation, but also stated that EBSA will prosecute bad-faith actors.

3. Complexities in Mental Health Parity and No Surprises Act Implementation: The Mental Health Parity and Addiction Equity Act requires equal treatment for behavioral and physical health benefits, but enforcement remains challenging due to systemic issues in plan administration and insurance practices. The No Surprises Act's dispute resolution system has generated thousands of complaints, with both providers and insurers expressing dissatisfaction with outcomes and payment processes. EBSA officials recognize these complexities and are actively seeking solutions, though they acknowledge that progress is ongoing and the regulatory environment is still evolving.

AI and life insurance: Fast today, unpredictable tomorrow

By John Hilton – Artificial intelligence is changing life insurance underwriting by making simple processes faster. How far it will go from here is the big unknown. "Carriers are still very much experimenting with how to bring AI into the underwriting process," said Michael Niemerg, principal and director of data science and analytics at Milliman. Niemerg spoke during a Tuesday session on the AI impact on underwriting at the LIMRA Life Insurance and Annuity Conference. Read Full Article...

HVBA Article Summary

1. AI's Expanding Role in Underwriting: Life insurers are integrating three main types of AI—generative AI, machine learning, and rule-based systems—into their underwriting processes. Generative AI is being used to summarize complex documents, while machine learning models help predict risk outcomes, and rule-based systems automate routine decisions. The convergence of these technologies is streamlining workflows but also increasing the complexity of data management.

2. Challenges with Data and Automation: The growth of available data sources, such as electronic health records and prescription histories, has improved risk assessment but introduced new challenges due to inconsistent formats and unstructured content. AI tools are helping insurers process and prioritize this data, enabling faster application triage and reducing manual work for simpler cases. However, experts caution that human oversight remains necessary, especially when AI-generated summaries require validation for accuracy.

3. Limitations and Future Outlook: Despite advancements, fully automated underwriting driven by generative AI is still years away due to concerns about reliability and auditability. Generative AI's tendency to produce variable outputs from the same input raises issues of trust and potential bias, prompting insurers to maintain a “human-in-the-loop” approach. Looking forward, the industry expects underwriting to become more efficient and automated, but human judgment and governance frameworks will continue to play a critical role.

FTC, Optum Rx seek another stay in antitrust case

By Kristen Smithberg – The Federal Trade Commission and Optum Rx have jointly asked to again extend a pause in the agency's antitrust case, continuing a series of procedural delays that could signal ongoing settlement discussions. The case, filed in September 2024, targets Optum Rx and affiliated entities in a Part 3 administrative proceeding — the FTC's in-house trial process before an administrative law judge. In its complaint, the FTC alleges that Optum Rx, one of the largest pharmacy benefit managers in the country, engaged in conduct that harmed competition by leveraging its position between drug manufacturers, insurers and pharmacies. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Repeated Delays in Antitrust Proceedings: Since early 2026, the FTC and Optum Rx have agreed to multiple stays in the litigation, which have postponed key deadlines and procedural steps. These delays are attributed to ongoing settlement talks as well as operational disruptions caused by lapses in federal funding. The repeated extensions suggest that both parties may be working toward a potential resolution outside of a full administrative trial.

2. Broader Regulatory Scrutiny of PBMs: The case against Optum Rx is part of a wider trend of increased federal and state oversight of pharmacy benefit managers (PBMs). Policymakers are focusing on PBMs' influence over drug pricing, rebate structures, and market access, with concerns that their practices may disadvantage independent pharmacies and impact prescription drug costs. Recent executive actions and legislative efforts at both the federal and state levels reflect a push for greater transparency and regulation of PBM activities.

3. Potential Impact on Drug Pricing and Market Practices: The outcome of this case could have significant implications for how PBMs operate within the pharmaceutical supply chain. If the FTC's allegations are upheld or a settlement is reached, it may lead to changes in how PBMs design formularies, negotiate rebates, and contract with pharmacies. Such changes could affect drug pricing strategies, the competitive landscape for independent pharmacies, and ultimately, the cost of prescription drugs for consumers.

Providers back bipartisan bill eliminating Medicare chronic care management cost sharing

By Dave Muoio – Dozens of provider and patient advocacy associations are putting their weight behind a newly introduced bill they say will promote better management of Medicare patients with multiple chronic conditions. The bipartisan Chronic Care Management Improvement Act targets a copayment that beneficiaries must agree to before they may receive a slew of behind-the-scenes services coordinating their records and care across multiple provider offices. The 20% coinsurance amount is relatively small—often around $12 a month, per the bill’s backers—but can become a financial barrier for any beneficiaries unable to shoulder additional out-of-pocket expenses. Read Full Article...

HVBA Article Summary

1. Bipartisan Support for Eliminating Cost Sharing: The proposed legislation, supported by both Democratic and Republican lawmakers, aims to remove the coinsurance requirement for Medicare chronic care management services. This cost, while relatively modest, is seen as a barrier that discourages eligible seniors from accessing beneficial care coordination. The bill is intended to make these services more accessible and reduce confusion among beneficiaries.

2. Low Utilization Despite Proven Benefits: Although chronic care management services have demonstrated positive outcomes and cost savings, only a small fraction of eligible Medicare patients have used them. The article notes that as of 2019, just 4% of eligible beneficiaries received these services, highlighting a significant gap between availability and actual use. Removing financial barriers is expected to increase participation and improve health outcomes for seniors with multiple chronic conditions.

3. Broad Endorsement from Healthcare and Patient Groups: The bill has garnered support from 40 healthcare and patient advocacy organizations, including major groups like the American Medical Association and AARP. These organizations emphasize that millions of Medicare beneficiaries could benefit from improved access to chronic care management. They also point to evidence that such services can lead to greater patient satisfaction, better adherence to therapies, and reduced hospitalizations.

Lilly’s tirzepatide sheds lean muscle harder than Novo’s semaglutide, study suggests

By Ayisha Sharma – While Eli Lilly’s tirzepatide helps patients drop more weight than Novo Nordisk’s semaglutide, this might come with greater loss in lean body mass, according to a new study awaiting peer review. The analysis, shared as a preprint, spotlights the fierce competition between Lilly and Novo in the weight loss drug market. Both companies have been trying to edge the other out by showcasing value-added drug features as well as investing in next-generation approaches and advancing oral formulations. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Tirzepatide Shows Greater Weight Loss but Higher Lean Mass Reduction: In a longitudinal analysis by nference, patients taking tirzepatide lost an average 15.2% of total body weight at one year, compared with 9.7% for those taking semaglutide. However, tirzepatide was also associated with a greater reduction in lean body mass (5.6% vs. 3.6%), with higher losses observed consistently at three-, six-, and nine-month intervals. The analysis included approximately 1,800 tirzepatide patients and 6,200 semaglutide patients, providing a broad comparative dataset.

2. Lean Body Mass Considerations and Emerging Combination Approaches: Muscle mass is an important factor in sustaining long-term weight loss, as it contributes to higher resting energy expenditure. Novo Nordisk reported that over 80% of weight loss from semaglutide in the STEP UP trial was due to fat reduction, emphasizing differences in body composition outcomes. Meanwhile, companies including Eli Lilly, Regeneron, and Scholar Rock are developing combination therapies that pair GLP-1 drugs with myostatin inhibitors to help preserve lean body mass.

3. Preclinical Findings and Ongoing Drug Development Efforts: Animal studies suggest semaglutide may activate liver cells to release anti-inflammatory compounds, supporting its use in liver-related conditions such as MASH. Additional experimental drugs targeting GIP and glucagon pathways have demonstrated comparable weight loss in animal models without typical gastrointestinal side effects. Regulatory review continues for new therapies, with the U.S. Food and Drug Administration requesting further cardiovascular and liver safety data for Eli Lilly’s investigational drug Foundayo despite positive Phase 3 results showing no liver toxicity.