CMS’s Big Bump to 2027 Medicare Advantage Rate Notice Makes Wall Street Smile

By Wendell Potter – Just minutes after the New York Stock Exchange closed yesterday afternoon, the Trump administration announced that it will pay private Medicare Advantage insurers billions of dollars more next year than it had suggested just a few months ago. Trump’s Centers for Medicare and Medicaid Services had to wait until after the market closed at 4 p.m. yesterday because it knew its announcement would be “material to earnings” for Big Insurance. And it certainly was. The share prices of UnitedHealth Group, Humana, CVS/Aetna and Elevance (Anthem) soared with all of them briefly gaining more than $20 a share almost immediately. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Significant Increase in Medicare Advantage Payments: The Centers for Medicare and Medicaid Services (CMS) announced a much larger payment increase for Medicare Advantage insurers for 2027 than initially proposed. The final rate increase jumped from a proposed 0.09% to 2.48%, resulting in an additional $13 billion for insurers. This decision came after a period of intense lobbying and a record number of public comments, many of which were generated by industry groups.

2. Immediate Positive Impact on Insurance Stocks: The announcement had a swift and substantial effect on the stock prices of major health insurers, with companies like UnitedHealth Group, Humana, CVS/Aetna, and Elevance all experiencing significant share price gains. Investors responded enthusiastically, and large stakeholders, such as hedge fund manager Ken Griffin, saw immediate financial benefits. The timing of the announcement, after market close, underscores its anticipated impact on earnings and investor sentiment.

3. Changes to Star Ratings and Ongoing Overpayment Concerns: In addition to the rate increase, CMS made it easier for insurers to achieve higher star ratings by eliminating several metrics and delaying the implementation of a new health equity award. These changes are expected to result in even more bonus payments to Medicare Advantage plans. Meanwhile, concerns persist about systemic overpayments to these plans, with MedPAC estimating that overpayments will total $76 billion this year due to risk adjustment practices.

Class actions spark greater scrutiny of broker fees

By Bruce Shutan – Several class-action lawsuits against employers alleging overpayments on voluntary benefits premiums not subsidized by employers are likely to help move the needle on a larger effort to infuse greater price transparency into the sale of health and welfare benefits. For brokers and advisers, the implication is clear. Compensation structures that may have survived on opacity will now be measured against data, benchmarking and fiduciary process, notes Justin Leader, president and CEO of BenefitsDNA. He says the focus shifts from "was it disclosed" to "was it reasonable, monitored and defensible." Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Litigation Drives Transparency: Recent class-action lawsuits targeting employer practices around voluntary benefits are accelerating the push for greater transparency in broker compensation. These legal actions are prompting the industry to reevaluate how fees and commissions are disclosed and justified. The focus is shifting from simply meeting disclosure requirements to ensuring compensation is reasonable, monitored, and defensible under fiduciary standards.

2. Broader Regulatory and Market Implications: The scrutiny is not limited to voluntary benefits but is expanding to other areas such as dental and vision insurance. Congressional oversight is increasing, with lawmakers examining market concentration and potential conflicts of interest in these sectors. This heightened attention may lead to more rigorous benchmarking, competition among brokers, and greater accountability for all parties involved in employee benefits.

3. Evolving Broker Practices and Employer Expectations: Industry experts suggest that brokers who proactively disclose all compensation streams and benchmark their offerings will be better positioned in the evolving landscape. Employers are encouraged to treat voluntary benefits with the same diligence as core health plans, ensuring employees understand what they are paying for. Transparent practices and reasonable compensation are seen as key to maintaining compliance and trust, while also supporting a more mature and stable benefits market.

Insurers committed to cutting prior authorizations have eliminated 11% so far

By Rebecca Pifer Parduhn – Prior authorizations require providers to get the green light from insurance company before they can provide certain treatments or prescribe certain drugs. Insurers argue that the preapprovals are a valuable tool for preventing unnecessary medical care and controlling rising spending. But they’re loathed by providers, who say onerous preauthorization policies contribute to burnout, slow down the provision of medical care and lead to worse health outcomes. Major insurers pledged to voluntarily pare back overly burdensome prior authorization processes last summer, including eliminating certain preapprovals and honoring existing prior authorization approvals from a member’s previous health plan. Read Full Article...

HVBA Article Summary

1. Progress on Reducing Prior Authorizations: Major U.S. insurers have reduced prior authorization requirements by 11% since making voluntary commitments to streamline these processes. This reduction, according to AHIP and the Blue Cross Blue Shield Association, translates to 6.5 million fewer prior authorizations for patients. The changes are especially notable in Medicare Advantage, where reductions exceeded 15%, reflecting targeted efforts in areas with heightened scrutiny.

2. Ongoing Provider Skepticism and Voluntary Nature: Despite these reported improvements, many healthcare providers remain skeptical about the long-term impact of the insurers' pledges. The voluntary nature of the commitments means there are no binding targets or enforcement mechanisms, leaving room for insurers to interpret or scale their efforts as they see fit. Past attempts at reform have not always led to lasting change, and some providers argue that prior authorization requirements have actually increased in recent years.

3. Future Plans and Regulatory Oversight: Insurers are working toward additional reforms, such as standardizing electronic prior authorization processes and improving real-time response rates, with some goals set for 2027. The Trump administration has indicated it is monitoring compliance and may consider regulatory action if insurers do not meet expectations. The scope of these changes is significant, potentially affecting over 250 million Americans, but ongoing oversight will be crucial to ensure meaningful progress.

Study suggests $35 monthly insulin cap has increased patient access

By Nicole DeFeudis – Diabetes patients in Medicare spent significantly less on insulin in the first year after a $35 monthly cap was put in place in 2023 — and more of them appeared to adhere to treatment. A new study published Monday in JAMA Internal Medicine looked at medical records from 4.8 million type 2 diabetes patients before and after the cap took effect. The results provide early evidence that the new pricing policy, enacted under the Inflation Reduction Act, may be linked to increased access to insulin. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Insulin Cost Caps Linked to Lower Patient Spending: A study examining Medicare Part D insulin users found that average quarterly out-of-pocket spending declined after cost-sharing initiatives were introduced. Spending dropped from $192.66 in 2019 to $95.42 by the fourth quarter of 2023 following the implementation of a voluntary $35 cap in 2021 and its expansion under the Inflation Reduction Act in 2023. These findings suggest the policy changes were associated with reduced financial burden for many insulin users.

2. Prescription Trends Reflect Broader Diabetes Treatment Changes: The study observed a slight decline in the proportion of type 2 diabetes patients filling insulin prescriptions beginning in 2021, which remained stable through 2023. Researchers noted that this trend may reflect increased use of alternative treatments such as GLP-1 medications rather than solely changes in insulin affordability. Because of these broader shifts in diabetes care, the results cannot attribute prescription trends entirely to insulin pricing policies.

3. Modest Increase in Insulin Supply May Indicate Improved Access: Researchers also found small increases in the average daily units of insulin filled, rising by 1.36 units per day in 2021 and another 1.16 units in 2023. While the data does not definitively prove improved medication adherence, the pattern suggests some patients may be less likely to ration insulin. The authors conclude that federal cost-sharing policies may help improve access to essential medications for individuals with chronic diseases such as diabetes.

Elevance to expand out-of-network penalty policy to New York

By Jakob Emerson – Elevance Health is bringing its out-of-network provider penalty policy to New York on July 1, continuing a state-by-state expansion that has drawn legislative backlash and opposition from hospitals and physician groups. Under the policy, in-network facilities in New York that use out-of-network providers to treat Anthem commercial members in inpatient or outpatient settings may face an administrative penalty equal to 7.5% of the allowed amount of claims involving those providers. Continued use of out-of-network providers could result in termination from Anthem’s network entirely. Read Full Article...

HVBA Article Summary

1. Elevance Expands Out-of-Network Penalty Policy Across States: Elevance Health implemented a policy at the start of the year across 11 states for its Anthem Blue Cross Blue Shield commercial plans and announced in March that it would extend the policy to California beginning June 1. New York was later included but with a penalty rate lower than the 10% applied in the other states. The policy establishes financial penalties for hospitals that use out-of-network providers under certain circumstances.

2. Policy Includes Multiple Hospital and Care Exemptions: The New York policy applies the same exemptions used in other states. These exemptions include emergency services, cases where Anthem grants prior authorization for a nonparticipating provider, and situations where no in-network provider is available within the same geographic area. Rural hospitals, critical access hospitals, and qualifying safety-net hospitals are also excluded from penalties.

3. State Legislation and Industry Reactions Highlight Policy Debate: In March, Indiana enacted a law banning insurers from penalizing hospitals for using out-of-network providers, a significant development given Elevance’s large market presence in the state. Elevance has stated that its policy is intended to address what it views as misuse of the independent dispute resolution process established under the No Surprises Act. Provider groups argue the policy may undermine NSA protections, shift financial pressure to hospitals, and influence independent physicians’ contracting decisions.

AI in the mental health care workforce is met with fear, pushback — and enthusiasm

By Rhitu Chatterjee – Artificial intelligence has arrived in the field of mental health. Large health systems and independent therapists alike have begun to adopt different AI tools to manage the delivery of mental health treatment. The speed of the adoption — alongside disturbing incidents of individuals using general-use AI chatbots with catastrophic consequences — is causing some concern among practitioners and researchers. "There is a lot of fear and anxiety about AI," says psychologist Vaile Wright, senior director of health care innovation at the American Psychological Association (APA). Read Full Article...

HVBA Article Summary

1. Rapid Adoption and Workforce Concerns: The mental health sector is seeing a swift integration of AI tools, especially for administrative and documentation tasks. This rapid change has led to anxiety among therapists, with some fearing that AI could eventually replace human providers or lead to job reductions. Recent labor actions, such as the strike by Kaiser Permanente therapists, highlight the workforce's apprehension about the erosion of roles traditionally held by licensed clinicians.

2. Current Uses and Limitations of AI: At present, AI in mental health care is primarily used for non-clinical functions like transcribing notes, updating electronic health records, and streamlining billing. While some companies are piloting AI chatbots for patient intake and support, experts note that clinical use of AI remains limited due to concerns about safety, lack of rigorous testing, and the need for significant infrastructure. Most small practices lack the resources to implement these technologies, and there is little regulation to ensure their effectiveness or safety.

3. Future Outlook and the Importance of Human Involvement: Experts predict that AI will continue to expand its role in mental health care, potentially leading to a hybrid model where human therapists and AI tools work together. There is consensus that AI cannot replace the therapeutic relationship and nuanced care provided by humans, but it can augment care by handling routine tasks and offering real-time feedback. Involving clinicians in the development and deployment of AI tools is seen as essential to ensure these technologies are safe, effective, and supportive of both providers and patients.

Hims & Hers says limited data stolen in social engineering attack

By David Jones – Hims & Hers, a San Francisco-based telehealth company, was impacted by a “sophisticated social engineering attack” in February in which a hacker gained access to its third-party customer service platform, according to regulatory filings. The firm said an unknown party gained unauthorized access to service tickets between Feb. 4 and Feb. 7, according to a filing Thursday with the California Attorney General’s office. The company discovered the suspicious activity on Feb. 5, took steps to secure its customer service environment and launched an investigation. Read Full Article...

HVBA Article Summary

1. Hims & Hers Reports Limited Data Exposure from Cyberattack: Hims & Hers disclosed that unauthorized third-party access was limited to its customer service software platform, where data primarily included customer names and email addresses. The company stated that electronic medical records and communications with healthcare providers on the platform were not accessed during the incident. Some treatment-related information may have been accessed for customers who contacted customer service through the platform between February 2025 and February 2026.

2. Social Engineering Attack Targeted Employees: The company confirmed that the breach resulted from a social engineering attack that targeted two employees. The incident was disclosed in a February 22 filing with the U.S. Securities and Exchange Commission and a report filed with the California Attorney General. Hims & Hers, which has approximately 2.5 million subscribers, operates a platform that provides health treatments and wellness products.

3. Company Response and Expected Financial Impact: Hims & Hers has notified law enforcement and is reviewing internal policies and procedures to reduce the likelihood of similar incidents in the future. The company reported that it is taking steps to strengthen security measures following the attack. Officials stated they do not expect the incident to have a material impact on the company’s financial performance.

Disability insurance supports employees' financial future

By Jessica Vanscavish – According to research from Guardian, workers' financial health is at a 14-year low. That's a sobering statistic, but the good news is that many employees say workplace benefits can make a real difference to their financial and overall well-being. In fact, nearly four in 10 say they'd face financial hardship if not for the benefits they get through work. Among the most impactful benefits: disability insurance. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Disability Insurance as a Critical Safety Net: Disability insurance is highlighted as one of the most valuable workplace benefits, providing income replacement for employees unable to work due to illness or injury. This coverage helps employees focus on recovery rather than financial stress, which can be crucial for both physical and mental health. The article emphasizes that many employees underestimate their risk of experiencing a disabling condition, making education about these benefits essential.

2. Common Misconceptions and Broader Coverage: Many workers mistakenly believe that disability insurance is only for catastrophic or permanent conditions, or that the Family and Medical Leave Act (FMLA) provides paid leave. In reality, short-term disability claims often arise from temporary conditions like maternity leave or minor injuries, and FMLA only guarantees job protection, not income. Employer-provided disability insurance can fill these gaps, offering wage replacement and, with additional riders, more comprehensive paid leave solutions.

3. Role of Employers and HR in Benefit Utilization: The article stresses the importance of employers and HR teams in educating employees about their disability insurance options and how to use them. Providing clear information about coverage details, eligibility, and integration with state leave laws can empower employees to make informed decisions. Incorporating wellness resources and support programs into disability insurance offerings can further enhance employee well-being and retention.