House Dems face choice on ACA compromises

By Peter Sullivan – The House is teeing up a series of health care votes this week as Democrats face a choice on their willingness to back anything but a straight extension of enhanced Affordable Care Act subsidies. Why it matters: The question is whether Democrats will ally with a handful of vulnerable Republicans and force a vote on a compromise subsidy plan that GOP leaders have no intention of letting become law. Read Full Article... 

HVBA Article Summary

1. House GOP Proposal Omits ACA Subsidy Extension: Republican House leadership plans to advance a health care bill that excludes an extension of the Affordable Care Act (ACA) tax credits, which they argue constitute unnecessary spending that benefits insurance companies. Instead, the proposal focuses on measures like increasing transparency for pharmacy benefit managers and helping small businesses access health insurance.

2. Bipartisan Alternatives Face Procedural and Political Hurdles: Two bipartisan proposals to extend the ACA subsidies are under consideration, each with different provisions and drawbacks. One includes a minimum premium requirement that some Democrats fear could reduce low-income coverage, while the other proposes a one-year extension with income caps. However, both face uncertainty regarding Senate approval and procedural challenges, such as the need for a discharge petition to bypass House leadership.

3. Democratic Preference for a Clean Multi-Year Extension: Democratic leaders, including House Minority Leader Hakeem Jeffries, are largely backing a clean, three-year extension of ACA subsidies with no eligibility changes. They express concern that short-term or modified plans could disrupt coverage and appear politically motivated to assist Republicans in the upcoming election cycle, rather than focusing on long-term policy stability.

Anthem’s 62% Profit Margin in Federal Employees Health Benefits Contract

By Chris Deacon - When the Office of Inspector General (OIG) audited Anthem Blue Cross and Blue Shield insurance plans for federal employees recently, auditors appeared to be conducting a typical contract compliance review. While they may not have been looking for a smoking gun, they stumbled upon one. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. $40+ Million in Improper Charges via Related-Party Transactions: Elevance Health’s Anthem division contracted subrogation services to its corporate sibling, Carelon, and charged the Federal Employees Health Benefits Program (FEHBP) $39,235,156 in subrogation fees and $5,638,360 in lost investment income. These charges were recorded as medical benefit expenses rather than administrative costs, which allowed them to bypass oversight restrictions and violated the FEHBP’s prohibition on profit-based pricing for such services.

2. Transparency Issues and Withholding of Cost Data: Anthem hindered the Office of Inspector General (OIG) audit by refusing to provide documentation, including all but six redacted pages of a 900-page Deloitte valuation report that it cited in defense of its fees. The company also initially denied having internal cost data, only to later accidentally reveal an Excel spreadsheet containing the exact cost information requested. This lack of cooperation led the OIG to note that it was unable to determine the reasonableness of the fees due to “scope limitation.”

3. High Potential Profit Margin and Oversight Failures: Based on the limited data obtained, the OIG estimated that Anthem’s profit margin on the subrogation work was approximately 62%—a striking figure given the FEHBP’s explicit ban on such profits. Anthem was responsible for administering $40.6 billion in benefit payments and $2.1 billion in administrative expenses during the audit period, making it the largest Blue Cross Blue Shield plan in the FEHBP. The report raises broader concerns about regulatory enforcement and suggests that other recovery-related services might similarly be generating undisclosed profits.

Top 10 340B drugs in 2024: Report

By Paige Twenter – Ten medications accounted for nearly one-third of 340B program-covered outpatient drugs in 2024, according to a Dec. 11 report. The Health Resources and Services Administration, an HHS agency, reported that 340B covered entities purchased $81.4 billion in outpatient drugs through the 340B program in 2024. Read Full Article...

HVBA Article Summary

1. Hospital Spending Breakdown in the 340B Program: Hospitals participating in the 340B drug pricing program collectively spent approximately $81.4 billion last year. The vast majority of this spending—about $64.13 billion—came from disproportionate share hospitals, which serve a large number of low-income patients. Other notable spending came from children’s hospitals ($2.37 billion), critical access hospitals ($1.19 billion), freestanding cancer centers ($602 million), and sole community hospitals ($549 million), highlighting the program’s widespread use across various types of healthcare facilities.

2. High Concentration of Spending on a Few Drugs: Nearly one-third (31%) of the total 340B program drug spending was concentrated on just 10 medications. This indicates a heavy reliance on a small group of high-cost drugs within the program, suggesting that a limited number of treatments—often for serious or chronic conditions—drive a significant portion of total expenditures.

3. Top Drugs Driving Costs in the Program: The 10 drugs with the highest expenditures under the 340B program accounted for a combined $26 billion in spending. Leading the list was Keytruda (an oncology drug) at $8.16 billion, followed by Biktarvy (used for HIV) at $4.2 billion, and Darzalex Faspro (another oncology treatment) at $2.46 billion. These medications, covering areas such as oncology, HIV, cystic fibrosis, multiple sclerosis, and immunology, reflect the program's focus on treating complex and high-cost health conditions.

IRS Issues Guidance Expanding HSA Access

By Emily Boyle - The IRS released a notice on December 9 providing guidance on new tax benefits for health savings account participants authorized by the One Big Beautiful Bill Act. The update comes as millions of Americans face uncertainty about expiring Affordable Care Act marketplace tax credits and projections of 9% higher health costs in 2026. Tax credits approved during the COVID-19 pandemic are set to end on January 1, 2026, without changes from Congress. The Urban Institute estimated earlier this year that without the tax credits, enrollment in ACA policies would decline by more than 7 million people. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Expansion of HSA Eligibility and Flexibility: Beginning in 2025, a permanent safe harbor allows Health Savings Account (HSA) holders to access telehealth and other remote care services before meeting their deductible without affecting their HSA eligibility. Additionally, starting in 2026, bronze and catastrophic plans offered through health care exchanges will be considered HSA-compatible, even if they don’t meet the traditional definition of a high-deductible health plan. This compatibility also applies to similar plans purchased outside of exchanges.

2. Clarification on Use of HSA Funds for Direct Primary Care: From January 1, 2026, individuals enrolled in high-deductible health plans will be able to use their HSA funds—tax-free—to pay for certain direct primary care services, as long as the monthly fees are $150 or less for individual coverage, or $300 or less for families. This provision expands how HSA funds can be used and may make direct primary care more accessible and affordable for eligible participants.

3. HSA Market Growth and Triple Tax Benefit: Health Savings Accounts continue to gain traction due to their unique triple tax advantages: contributions made through payroll are pre-tax, account growth is tax-free, and withdrawals used for qualified medical expenses are also tax-free. As of the end of 2024, there were 39.3 million HSAs holding nearly $147 billion in assets, covering about 59.3 million people. Market projections estimate this will grow to over 47 million accounts and $208 billion in assets by the end of 2027.

Exclusive research: Caregiving support boosts recruitment and retention

By Lee Hafner - Supporting working caregivers can be challenging for benefit leaders. But it's worth it. New research from Employee Benefit News shows a direct tie between the support caregivers receive from their employer and retention of those workers. It also reveals what different generations are facing and in need of, giving benefit leaders thorough insight into what offerings are most impactful. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Employee Turnover Risk Tied to Caregiving Needs: A growing portion of the workforce—44% of surveyed employees—are open to changing jobs to better accommodate their caregiving responsibilities, with 16% actively searching for new roles. This marks a 7% increase from 2023 and reflects a notable shift in priorities. Gen Z and millennial employees are particularly likely to consider job changes if their caregiving needs aren’t met, which could pose long-term retention challenges for employers if left unaddressed.

2. Workplace Support for Caregivers Is Improving but Remains Crucial: The survey showed progress in workplace awareness, with 69% of respondents saying their employers or managers understand the extent of their caregiving duties—up from 56% the previous year. Additionally, 57% now rate their organization’s caregiver support as good or excellent, a significant increase from 38% in 2023. However, caregiving-related benefits, along with flexibility and competitive salaries, continue to be major factors influencing job decisions, highlighting the ongoing need for targeted employer support.

3. Caregiving Impacts Employee Wellbeing and Finances: Many caregivers report high levels of stress and financial strain due to their dual roles, with 43% experiencing stress or anxiety and 35% facing economic difficulties. One in five even reported delaying their own healthcare. Despite these challenges, most caregivers say they find meaning and satisfaction in their responsibilities. These insights suggest that employers who better understand the physical, emotional, and financial toll of caregiving can develop more effective benefits that help employees manage both work and caregiving more sustainably.

Mental health parity push sparks reporting war between state regulators, health insurers

By Allison Bell – State insurance regulators and health insurers may need a counselor to help them work through their conflicts over new mental health parity compliance efforts. The dispute involves "parity," or state and federal rules that require any mental health or addiction treatment benefits that a plan offers to be similar to the plan's medical benefits. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Regulator Concerns Over NQTL Reporting Quality: State insurance regulators have expressed growing dissatisfaction with the quality of nonquantitative treatment limit (NQTL) reports submitted by health plans. In states like Arizona and New Mexico, regulators noted that insurers often group multiple NQTLs into a single analysis and fail to provide sufficient detail or transparency. This makes it difficult to assess whether mental health and substance use disorder benefits are truly comparable to medical and surgical benefits, as required by law.

2. Insurer Challenges with Inconsistent State Reporting Requirements: Health plans have reported significant obstacles in complying with parity regulations due to a patchwork of inconsistent and sometimes vague reporting standards across states. In many cases, insurers say they are asked to provide complex or service-specific data that is difficult to produce. This lack of uniformity across jurisdictions adds administrative burden and creates confusion about what constitutes adequate compliance.

3. Calls for Standardized Federal Guidance Using Existing Tools: Both regulators and insurers have pointed to the potential benefits of adopting a unified, nationwide approach to NQTL parity reporting. The U.S. Department of Labor’s self-compliance tool has been highlighted as a practical resource that outlines clear evaluation criteria. Broader adoption of this tool by states could improve clarity, enhance compliance, and streamline the reporting process for insurers across the country.

Lilly's Next-gen Drug Shows Greater Weight Loss Than Zepbound in Late-stage Trial

By Christy Santhosh and Sriparna Roy – Eli Lilly said on Thursday its next-generation obesity drug helped patients lose an average of 28.7% of their weight in a late-stage trial, outperforming its blockbuster drug Zepbound and reinforcing the company's lead in the fast-growing market. The global obesity market has surged in recent years on strong demand for GLP-1-based drugs like Zepbound and Novo Nordisk's Wegovy, prompting drugmakers to invest heavily in next-generation treatments that could deliver faster, deeper, or more durable weight loss. Read Full Article...

HVBA Article Summary

1. Strong Weight Loss Results with Retatrutide: Eli Lilly's experimental weight-loss drug, retatrutide, demonstrated significant weight reduction—up to an average of 71.2 pounds over 68 weeks in a late-stage trial. This makes it the most effective weight-loss result to date among such treatments, especially in participants with obesity and knee osteoarthritis. However, some participants exited the trial due to perceived excessive weight loss, particularly those with lower starting BMIs.

2. Mixed Tolerability and Safety Profile: While common gastrointestinal side effects were consistent with other weight-loss drugs, dysesthesia (abnormal skin sensation) was noted in over 20% of patients on the highest dose. Analysts flagged these as elevated and noteworthy, prompting calls for a closer look at the full data. Trial discontinuation rates were also higher for those on retatrutide versus placebo, suggesting some tolerability concerns.

3. Market and Competitive Context: Despite its promising efficacy, investor response to the trial was measured, with some analysts calling the profile of the drug "somewhat mixed" compared to expectations. Lilly is expected to complete seven more late-stage trials by 2026, positioning retatrutide as a potential blockbuster with long-term commercial prospects. It competes with Novo Nordisk’s “triple-G” drug candidate, highlighting a growing arms race in next-generation obesity treatments.