White House threatens to 'deploy every tool in our arsenal' to implement most-favored-nation drug pricing

By Fraiser Kansteiner - As pharmaceutical import tariffs take shape in Europe, President Donald Trump is rounding out the week by spotlighting another one of his biggest industry bugbears: drug pricing. Still, the latest move by the President to implement so-called “Most Favored Nation” (MFN) drug pricing—which seeks to match the costs of prescription drugs in the U.S. to the lowest price offered in other developed nations—may be more bark than bite, according to at least one group of analysts. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Trump Administration Pressures Drugmakers to Match International Prices: President Trump issued formal letters to 17 of the world’s largest pharmaceutical companies, urging them to lower U.S. drug prices to match the lowest prices found in other developed nations—known as “Most Favored Nation” (MFN) pricing. The letters demanded that Medicaid patients receive these prices and warned that if drugmakers fail to comply, the federal government would consider using all available tools to curb what it described as “abusive” pricing practices.

2. Industry Response Mixed, with Cautious Cooperation: While some companies acknowledged the letters and reiterated their commitment to improving access and affordability, few offered specific agreements to the MFN proposals. Industry analysts interpreted the move more as a political maneuver than an enforceable directive, especially given the legal and procedural limits of executive authority without Congressional backing. The pharmaceutical industry remains skeptical about the feasibility and fairness of the MFN policy.

3. Policy Implications Extend Beyond MFN Pricing: In addition to MFN pricing, the Trump administration advocated for eliminating middlemen like pharmacy benefit managers (PBMs) in favor of direct-to-patient sales, provided such models don’t raise costs. This letter follows the signing of an executive order and comes amid broader policy efforts, including proposed 15% import tariffs and a pending national security review of pharmaceutical imports. These developments signal mounting pressure on the drug industry and add to the regulatory and financial uncertainty it faces.

Senate Appropriations Committee reverses federal benefits agency budget cuts

By Allison Bell - The U.S. Senate Appropriations Committee wants to stabilize funding for the federal Employee Benefits Security Administration — and for EBSA to look harder at how well employer health plans are covering mental health services and addiction treatment. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Steady Funding for Key Agencies: The Senate Appropriations Committee approved a fiscal year 2026 spending bill that maintains current funding levels for both the Employee Benefits Security Administration (EBSA) at $191.1 million and the CMS program management arm at $3.7 billion. These decisions contrast with the Trump administration’s earlier proposals to reduce funding for both agencies by over 5%, reflecting the committee’s intent to preserve operational stability across key health and labor oversight programs.

2. Increased Focus on Mental Health Parity Enforcement: The committee included language in its bill report supporting stronger enforcement of mental health parity laws, which require equal coverage for mental and physical health care. This indicates that EBSA may conduct more systemic and targeted audits of employer-sponsored health plans in the coming year, particularly those governed by ERISA, to ensure compliance with existing parity regulations.

3. Support for Medical Research: The Senate committee also demonstrated continued support for federal medical research by approving $48.7 billion in funding for the National Institutes of Health (NIH), up slightly from $48.3 billion the previous year. This move contrasts sharply with the Trump administration’s preliminary budget proposal, which had suggested cutting NIH funding by 40%, signaling bipartisan interest in sustaining biomedical research investment.

Which healthcare services are driving higher costs for insurers?

By Jakob Emerson - With second quarter earnings now reported, health insurers are navigating elevated medical cost trends that are hurting their profit margins, driven by increased member utilization of specialty drugs, behavioral health, and emergency services. In their calls with investors, executives specifically noted rising acuity in the Medicare Advantage and ACA markets, “aggressive” provider coding, and the rising demand for stop-loss insurance from employers. Read Full Article… 

HVBA Article Summary

1. Elevated Utilization Trends Across the Industry: A majority of large health insurers, including UnitedHealth, Elevance Health, Cigna, CVS Health, Centene, and Molina, are reporting higher-than-expected medical utilization across key business segments. This includes increased use of outpatient services, pharmacy infusions, specialty drugs, and behavioral health care. These trends are putting upward pressure on medical cost projections, prompting several companies to revise their cost trend estimates for the remainder of the year.

2. Post-Pandemic Market Shifts Are Driving Morbidity and Cost Pressures: Health plans are seeing the effects of structural changes in enrollment and care needs, such as the fallout from Medicaid redeterminations, a sicker population entering ACA plans, and more intensive service use. These shifts, combined with aggressive provider coding and increased emergency department usage, are contributing to significant morbidity-driven cost increases across ACA, Medicaid, and commercial segments.

3. Humana as a Notable Outlier with Positive Performance: Unlike its peers, Humana has maintained medical utilization trends that align with its original projections and has even exceeded expectations in specialty drug performance. This success is attributed to a more favorable drug mix and strategic enhancements in direct-to-consumer partnerships, positioning the company as an outlier in an otherwise challenging industry landscape.

The cost of healthcare breaches tops all industries, and AI emerges as a target

By Ron Southwick - The healthcare industry retains an unwanted distinction when it comes to cybersecurity. The average cost of a healthcare data breach has once again surpassed all other industries, according to a new report released today by IBM. In its annual report on the cost of breaches, the average healthcare data breach cost $7.42 million. It’s the 14th consecutive year that healthcare data breaches ranked as the most expensive in any industry. Read Full Article…

HVBA Article Summary

1. Healthcare Data Breach Costs Drop but Remain Highest Among Industries: The average cost of a healthcare data breach has decreased to $9.33 million, down from $9.77 million last year and $10.93 million two years ago. Despite this decline, healthcare remains the most expensive sector for data breaches—$3 million higher than the global industry average. Increased use of AI and automation is credited with improving detection and response times, though the sector still trails in breach containment speed.

2. Shifting Targets and Emerging Vulnerabilities: The decline in average breach cost may also reflect a trend of attackers targeting smaller, less-protected healthcare organizations, which are seen as easier to infiltrate due to limited budgets and weaker cybersecurity infrastructure. These entities are increasingly falling victim to ransomware attacks, further highlighting the need for robust, sector-wide security investment.

3. AI’s Double-Edged Impact and Governance Gaps: Both defenders and attackers are using AI tools—while healthcare systems leverage AI for quicker threat detection, cybercriminals use it to create more sophisticated phishing and malware attacks. Despite rising AI adoption, many healthcare organizations lack governance policies, with shadow AI use growing unchecked. Breaches involving shadow AI are more expensive, and experts warn this trend may contribute to larger and more damaging cyberattacks in the near future.

Retirement health care costs soar to $172,500

By Kristen Smithberg - The projected cost of health care expenses in retirement continues to grow, yet a significant portion of Americans are unaware of the need to save for health expenses. A 65-year-old retiring today can expect to spend $172,500 on health care and medical expenses during retirement. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Rising Retiree Health Care Costs: Fidelity's annual estimate shows retiree health care expenses have increased by over 4% year-over-year, continuing a long-term upward trend since 2002. The bulk of these costs comes from out-of-pocket payments such as co-pays, deductibles, and Medicare premiums, with prescription drug costs also contributing.

2. Gaps in Preparedness and Awareness: Many Americans are not adequately preparing for health care expenses in retirement. Over 20% have never considered these costs, and 17% have taken no action to plan for them. Additionally, a large portion of the population overestimates Medicare's coverage and anticipates difficulty navigating the enrollment process.

3. Limited Use of Health Savings Accounts (HSAs): While HSAs offer triple tax advantages and can be a powerful tool for retirement health savings, adoption remains low—especially among those nearing retirement. Only 15% of people aged 55–64 have an HSA, and most are unaware of its potential as a retirement savings vehicle, despite growing interest and asset growth in HSA accounts.

Helping Life Insurance Agents Develop Their OBBBA Marketing Response

By Charles L. Ratner - With the passage of the One Big Beautiful Bill Act (OBBBA), agents working in a certain segment of the high-net-worth market may have lost their estate liquidity sales. Moreover, they could find that their usual sales themes about the need to do planning and provide capital and liquidity are being met with a new set of objections from clients/prospects who don’t see the need or don’t want to spend the money. Read Full Article…

HVBA Article Summary

1. Objection to Life Insurance in Advanced Estate Planning: High-net-worth individuals often question the need for life insurance, citing generous estate tax exemptions, unlimited marital deductions, IRC Section 6166 business provisions, and other sophisticated wealth transfer tools. These clients view their estate plans as sufficient without the additional layer of insurance, particularly given current favorable tax laws under OBBBA.

2. Advisor Strategy and Communication Shift: Rather than relying on political scare tactics or traditional sales angles, advisors are encouraged to engage these clients through more strategic, individualized conversations. By acknowledging clients as knowledgeable planners first—before appealing to them as parents or taxpayers—advisors can better align life insurance discussions with the client’s priorities and financial sophistication.

3. Technical Planning as a Relationship Gateway: Advisors and agents can create value by helping clients navigate complex planning issues such as extracting policies from ILITs, terminating split-dollar arrangements, or reassessing annuity strategies post-OBBBA. These nuanced projects allow agents to build trust and strengthen relationships with clients and their advisors, serving as a bridge to broader conversations about life insurance integration.

Benefits innovation starts with infrastructure

By Daniel Gootner - Differentiation in insurance no longer hinges on product or price alone. It’s what’s behind the scenes that defines who leads and who lags. Today, the real advantage lies beneath the surface in the infrastructure. For benefits advisors and employers, the question isn’t just which plans to offer, but whether your agency, plan provider and partners are equipped with the right technology to deliver those plans effectively. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Fragmented Systems Undermine Agency Performance: Many health insurance agencies rely on disconnected, outdated systems for quoting, enrollment, CRM, and commissions, leading to manual work, slower service, compliance risks, and limited visibility into performance. This fragmentation is not just inefficient — it creates strategic vulnerabilities in a competitive and regulated market.

2. Rising Digital Expectations Challenge Legacy: Infrastructure: Consumers and employers increasingly expect digital-first experiences across all aspects of benefits, from real-time quoting to mobile access and proactive support. Agencies and carriers that fail to meet these expectations risk falling behind, making modern digital tools essential to competitiveness.

3. Integrated Platforms Drive Better Consumer Outcomes: As more individuals shop for health plans independently, agencies must offer transparency, choice, and efficiency. Modern, unified systems enable advisors to recommend best-fit plans, respond quickly to client needs, and deliver a streamlined, high-confidence experience for both employers and employees.