Insurers see positive results in managing health costs in Q2

By Paige Minemyer – The health insurance industry weathered a rough 2025, and the turnaround for some companies through the midpoint has surprised even Wall Street analysts. UnitedHealth Group was the most profitable company in the second quarter of 2026, posting $5.5 billion in profit. The next-highest firm was CVS Health, which reported just shy of $3 billion in profit for the quarter. The performance of both companies came as a surprise to investors. Michael Cherny, senior research analyst at Leerink Partners, said CVS, for example, "beat our number on all three segments fairly handily." Read Full Article...

HVBA Article Summary

1. Major Insurers Posted Strong Year-Over-Year Gains: UnitedHealth Group and CVS Health both delivered significant profit growth compared to the prior year, signaling improved cost management and operational execution. UnitedHealth increased its quarterly profit from $3.4 billion in Q2 2025 to $5.5 billion in Q2 2026, while CVS saw profits climb sharply from $1 billion to nearly $3 billion over the same period. Through the first half of the year, both companies also reported multi-billion-dollar increases in cumulative earnings. Their revenue totals—$112 billion for UnitedHealth and $106.1 billion for CVS—underscore the scale at which these improvements occurred.

2. Medicaid and ACA Markets Remain Key Pressure Points: Despite stronger overall results, insurers flagged Medicaid as an area of ongoing margin strain, with some forecasting negative margins ahead. Centene, which has substantial exposure to Medicaid and ACA plans, posted a $1.2 billion quarterly profit after a prior-year loss, but reported a Medicaid medical loss ratio of 93.9%, higher than its overall 89.6% MLR. Executives and analysts noted that upcoming work requirements and policy shifts could create additional turbulence in early 2027. Investors are watching closely for tangible signs that cost trends in Medicaid are stabilizing.

3. Medicare Advantage Outlook Is Improving but Uncertain: Insurers reported progress in repricing Medicare Advantage plans and adjusting geographic footprints to improve performance. However, companies such as Humana have maintained guidance rather than raising expectations, even after reporting modest profit growth to $694 million in Q2. Analysts indicated that investors are increasingly focused on multi-year margin recovery rather than short-term gains. Ongoing litigation and uncertainty around MA star ratings are also shaping how insurers communicate future expectations.

Rx Right- sizing

By Bruce Shutan – In America’s pill-popping culture, it’s not surprising that the prevalence of patients taking multiple medications to manage leading chronic conditions such as diabetes, heart disease, hypertension and high cholesterol is surging along with the graying of America. Just turn on any TV and commercials extolling the clinical bene!ts of a host of new drugs are inescapable. Read Full Article...

HVBA Article Summary

1. Polypharmacy Raises Clinical and Financial Risks: Experts warn that while using multiple medications can be necessary for complex or chronic conditions, it significantly increases the likelihood of adverse drug interactions, falls, cognitive issues and hospitalizations. One industry source notes that 30% of hospitalization issues are tied to inappropriate medications, underscoring how even a single misstep in prescribing can have serious consequences. For self-insured employers, these risks translate into higher healthcare costs and poorer outcomes. A more deliberate review process before adding or continuing prescriptions is seen as essential to mitigating these exposures.

2. GLP-1 Adoption Could Reshape Medication Use: The growing popularity of GLP-1 drugs for weight loss may substantially alter polypharmacy patterns, potentially reducing the need for medications that treat related conditions like hypertension or high cholesterol. One expert predicts that as much as 40% of the U.S. population could end up using GLP-1s based on obesity trends. However, uncertainties remain around drug interactions and side effects, and many patients regain weight after discontinuing treatment. This creates both an opportunity to streamline regimens and a need for careful long-term management.

3. Technology and Alternative Therapies Offer New Tools — With Caveats: Artificial intelligence can help clinicians prioritize dangerous drug interactions and manage large patient panels that may range from hundreds to as many as 100,000 individuals. Still, concerns about data privacy, accuracy and the limits of non-clinical AI systems remain significant. Meanwhile, cannabis-based therapies are being explored as alternatives or adjuncts, with one company reporting a more than 50% reduction over three months in the use of multiple medications among more than 250,000 surveyed patients. Experts emphasize that any innovation—whether AI-driven oversight or alternative treatments—must be evidence-based and aligned with improving overall clinical value.

Digital health funding hits $7.4B in 2026 as AI investment reshapes the market

By Heather Landi – Venture capital funding for digital health startups is on an upswing, fueled by an AI-powered rebound following a post-pandemic reset in 2023. Read Full Article...

HVBA Article Summary

1. Megadeals Are Driving Capital Concentration: Investment dollars are increasingly flowing into a small group of large financings. In the first half of 2026, 19 companies accounted for 20 financings of $100 million or more, representing 45% of all capital invested while making up just over 8% of total deals. This concentration highlights investor preference for later-stage or breakout companies with perceived scale advantages. It also suggests a more selective funding environment compared to the broader, earlier-stage surge seen during the pandemic years.

2. AI Is Shifting Competitive Expectations: As artificial intelligence tools become more accessible and foundation models improve, technical differentiation alone is becoming harder to sustain. Investors are now prioritizing attributes that AI by itself cannot easily replicate, such as deep domain expertise and strong founder-market fit. Rock Health identified durable moats including ownership of larger portions of clinical workflows, hands-on service models and embedded partnerships. These factors are increasingly viewed as critical to long-term defensibility in a crowded AI-enabled market.

3. Sector Activity Extends Beyond Venture Funding: While IPO activity has yet to materialize in 2026, several high-profile companies are preparing to go public, signaling potential future exits. At the same time, mergers and acquisitions are accelerating, with 115 acquisitions recorded in the first half of the year, outpacing prior annual trends. Revenue cycle management in particular has seen significant consolidation, alongside large private equity moves such as a $12 billion agreement to acquire Ensemble Health. Together, these trends indicate an ecosystem that is maturing and reorganizing as capital flows return.

Insurers want to hike small businesses’ premiums by 14% next year: KFF

By Rebecca Pifer Parduhn – Small businesses could face a double-digit increase in premiums for their health coverage next year, as insurers contend with rising medical prices, expensive specialty drugs and other factors inflating spending. Insurers are requesting a median 14% premium increase for the small group market next year, according to a new analysis of rate filings from health policy research group KFF. Most insurers want to raise rates between 10% and 20%, though six want to hike rates above 30%. Read Full Article...

HVBA Article Summary

1. Rising Medical Costs and Drug Spending Drive Increases: Insurers told regulators that underlying healthcare costs are climbing rapidly, with spending growth at its fastest pace in more than a decade. They cited higher prices for hospital services and prescription medications, as well as increased utilization by members. GLP-1 drugs, widely used for diabetes and weight loss, were highlighted as a significant contributor to escalating pharmacy costs. Some carriers are even scaling back anti-obesity coverage, though overall drug spending continues to rise.

2. Regulatory and Market Pressures Add to Premium Growth: Certain insurers in New York said they factored the No Surprises Act into their rate filings, adding 0.8% to premiums due to higher out-of-network dispute payouts. Providers have been winning many payment disputes and securing reimbursements above typical in-network rates, which insurers argue is raising their costs. At the same time, exchange insurers are managing added instability from the expiration of enhanced federal subsidies. Together, these policy and market dynamics are contributing to upward pressure on premiums.

3. Small Group Market Faces Ongoing Erosion: Enrollment in the fully insured small group market has fallen from 17 million in 2013 to 10 million in 2024, even as overall coverage rates among small business employees have held steady. Many employers are shifting to self-funded or level-funded plans, which can offer savings but are not subject to all Affordable Care Act benefit requirements. These alternatives may allow insurers to adjust pricing based on health status or decline certain groups, potentially leaving sicker firms in the traditional market. Researchers warn that continued migration could further weaken the risk pool and push premiums even higher for remaining small employers.

GLP-1 costs are breaking the traditional benefits model

By Chris Byrd – GLP-1 usage has officially hit the mainstream, with nearly one in eight U.S. adults currently taking these medications and one in five having tried them. This surge has transformed what was once a niche treatment for type 2 diabetes into a primary pillar of modern health and wellness — and it has placed immense pressure on employers to follow suit. As benefits leaders enter the critical 2027 planning cycle, we have reached a point of reckoning. Traditional health plans are effectively breaking under the pressure of GLP-1 utilization, and the legacy funding model is forcing employers to choose between three difficult choices. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Rising Cost-Sharing Is Undermining Treatment Continuity: Survey data cited in the article shows that 70% of traditional plan enrollees now have deductibles, an increase from the prior year. As deductibles climb, employees face greater out-of-pocket exposure for high-cost medications like GLP-1s. The article notes that 35% of people who began taking GLP-1 drugs have stopped, most commonly for financial reasons. This suggests affordability challenges are directly affecting adherence and long-term health outcomes.

2. Coverage Gaps Are Creating Employer Tension: The research highlights a disconnect between what employers offer and what workers expect. While only one in four employees report that their employer covers GLP-1 medications, two-thirds believe the drugs should be covered. Employers that do provide coverage are grappling with significant budget impacts, while those that do not may face morale and retention risks. This divergence is becoming a central issue in upcoming benefits design decisions.

3. HRAs Proposed as a Structural Solution: The author argues that carving GLP-1 coverage into a defined-contribution health reimbursement arrangement (HRA) could cap employer exposure. By setting fixed allowances and eligibility criteria, organizations could create predictable budgeting while still offering access. The approach also allows employees to seek competitive pricing outside traditional pharmacy benefit manager networks. According to the commentary, this model could balance fiscal control with competitive benefits positioning.

Gen X employees say they are burned out from caregiving responsibilities

By Laurel Kalser – Nearly 1 in 4 Generation X workers spends the equivalent of two full workdays each week on caregiving responsibilities, creating the need for more conversations about employee support, workplace flexibility and long-term workforce planning, according to a July 24 report from resume consulting firm Zety. A June survey of 1,003 Gen X workers found that 22% spend more than 16 hours a week providing care to loved ones; 37% are in the “sandwich generation” squeeze, caring for aging relatives while supporting minor and adult children; and 44% of Gen X caregivers said they struggle to stay focused and productive at work, career expert Jasmine Escalera wrote in an analysis of the data. More than half (54%) reported feeling stressed and burned out from their caregiving responsibilities, yet 3 in 10 said they receive little or no support from their employer for managing those demands, Escalera said. Read Full Article...

HVBA Article Summary

1. Caregiving Extends Beyond Basic Tasks: The report emphasizes that Gen X caregivers are not only helping with physical care but also managing complex logistical and financial responsibilities. These include coordinating healthcare appointments, handling insurance matters, arranging housing and transportation, and assisting with bills or tuition payments. Such responsibilities add administrative and emotional strain that can compound over time. This broader scope of care helps explain why many workers experience sustained stress.

2. Work Disruptions Are Common: Many caregivers report that their professional responsibilities are frequently interrupted by personal obligations. Survey data show that 40% have dealt with work interruptions due to appointments or emergencies, and 37% struggle to begin or finish work on schedule. Separate research from Atlassian indicates that nearly three-quarters of working caregivers across seven countries have used time off to catch up on work tasks. Together, these findings suggest caregiving can directly affect attendance, productivity and career progression.

3. Caregiving Responsibilities Are Growing Across Generations: Additional research cited in the article notes that the share of full-time working Americans with caregiving duties has risen 13% since 2019. The responsibility spans age groups, affecting 25% of baby boomers, 39% of Gen X, 51% of millennials and 38% of Gen Z. Experts suggest that employers may need to expand support through flexible schedules, paid leave and employee assistance programs to address retention and engagement risks. Without broader workplace flexibility, a gap may persist between employee needs and organizational policies.

Retatrutide Expanded Access Draws Mixed Clinician Views

By Marilynn Larkin – Eli Lilly is offering expanded access to retatrutide, its investigational triple hormone receptor agonist that demonstrated substantial weight loss in phase 3 studies, and not all clinicians are happy about the move. Read Full Article...

HVBA Article Summary

1. Eligibility Criteria Aim to Limit Use to High-Need Patients: The expanded access program is restricted to adults with refractory obesity defined by a BMI of at least 35 despite treatment with the highest tolerated doses of chronic weight management therapy. Patients must also have at least two serious or life-threatening obesity-related complications and be unable to enroll in a relevant clinical trial. In addition, standard treatments, including bariatric surgery, must have been discussed through shared decision-making. These requirements are designed to focus access on a narrowly defined, medically complex population.

2. Clinicians Cite Safety, Oversight, and Demand Concerns: Some physicians emphasize the importance of the FDA’s full approval process, particularly for obesity drugs that may require long-term use. They warn that early access could generate confusion among patients and trigger a surge of requests, potentially overwhelming practices. Others question who will be responsible for vetting and monitoring patients for adverse effects. There are also concerns that the move may raise expectations among individuals who may not ultimately qualify.

3. Supporters Argue Structured Access Is Preferable to Unregulated Alternatives: Other experts note that expanded access is an established FDA pathway and may be safer than patients seeking compounded or unregulated versions of similar drugs. They argue that providing the medication within a clinical setting allows for medical supervision and monitoring of side effects. Some see the program as recognition of obesity as a serious chronic disease with unmet needs. At the same time, they stress that approved therapies remain the standard of care for most patients.