Daily Industry Report - February 25

Your summary of the Voluntary and Healthcare Industry’s most relevant and breaking news; brought to you by the Health & Voluntary Benefits Association®

Jake Velie, CPT
Vice Chairman & President
Health & Voluntary Benefits Association® (HVBA)
Editor-In-Chief
Daily Industry Report (DIR)

Robert S. Shestack, CCSS, CVBS, CFF
Chairman & CEO
Health & Voluntary Benefits Association® (HVBA)
Publisher
Daily Industry Report (DIR)

UnitedHealth says it faces no new DOJ probe into its billing practices, contrary to a WSJ report

By Allison Bell - UnitedHealth put out a statement Friday that rejected allegations by the Wall Street Journal that the health insurer is facing a new federal government investigation over Medicare Advantage billing practices. Read Full Article…  (Subscription required)

HVBA Article Summary

  1. DOJ Investigation Impact: The U.S. Justice Department is reportedly investigating allegations that UnitedHealth manipulated Medicare Advantage risk-adjustment data to make enrollees appear sicker than they were, potentially influencing risk-adjusted payments. This news, based on an article by the Wall Street Journal, triggered a 7.17% drop in UnitedHealth's share price to $466.42.

  2. UnitedHealth's Response and Criticism: UnitedHealth denied awareness of any new investigations and criticized the Wall Street Journal for allegedly favoring outdated fee-for-service healthcare models. The company emphasized its strong compliance record with Medicare Advantage reviews and accused the Journal of opposing modern care management strategies.

  3. Broader Industry Context: The controversy is part of a larger trend of resistance to health plan cost management initiatives, including disputes over pharmacy benefit managers' drug pricing controls and physicians' opposition to prior authorization practices. This tension reflects ongoing challenges in balancing cost containment with patient care in the evolving healthcare landscape.

HVBA Poll Question - Please share your insights

In the voluntary benefit marketplace (Accident, Disability, Hospital Indemnity, Critical Illness, etc.), which generation do you believe engages the most with voluntary benefit programs?

Login or Subscribe to participate in polls.

Our last poll results are in!

43.29%

of Daily Industry Report readers who participated in our last polling question when asked, “When offering voluntary products to employees during Open Enrollment, which of the following is the most well-received?” responded with “Accident Insurance.

24.49%  responded with “All of the above,” and that Accident Insurance, Critical Illness, and Hospital Indemnity are all among the most well-received. In comparison, 18.46% of poll participants believe the most well-received to be “Critical Illness,” while 13.76 find it “Hospital Indemnity.”

Have a poll question you’d like to suggest? Let us know!

Mental health issues ripple through the federal workforce with firings

By Katia Riddle - Federal workers and contractors who have been fired hastily in recent weeks say among the many personal and financial costs of these terminations is their mental health. Thousands of workers across the federal government including at the Department of Education, the Department of Veterans Affairs, USAID and the Environmental Protection Agency have been terminated — in many cases with little explanation or process — since President Trump took office. Elon Musk's efficiency effort known as DOGE initiated the mass firings. Read Full Article…

HVBA Article Summary

  1. Impact on Families and Mental Health: Nadia Shadravan's furlough from USAID has not only affected her job security but also caused significant stress and anxiety for her family, highlighting the emotional toll of sudden job instability. Her children are visibly worried, and she is uncertain about her family's future, underscoring the broader mental health impact on families affected by such furloughs.

  2. Productivity and Organizational Consequences: According to Harvard Business School's Amy Edmondson, mass layoffs and abrupt job uncertainties can lead to a decline in workforce productivity due to fear and intimidation. This psychological impact undermines team psychological safety, making employees less effective in their roles and damaging organizational morale.

  3. Widespread Ripple Effects and Trauma: The USAID shutdown has created a ripple effect, impacting not only employees but also the broader ecosystem reliant on government funding. The uncertainty has triggered severe mental health crises, as illustrated by Joe's experience with anxiety and panic attacks. This environment of fear and instability is compounded by statements from officials suggesting that inducing trauma among federal workers was an intentional strategy.

If you or someone you know is in crisis, you can call or text 988 for the Suicide and Crisis Lifeline.

FDA sets deadline to end sales of Ozempic, Wegovy copycats

By Mackenzie Bean - Compounding pharmacies and telehealth companies selling lower-cost versions of Novo Nordisk's Ozempic and Wegovy will soon have to halt production after the FDA set deadlines to phase out compounded semaglutide. Amid shortages, the FDA has permitted compounding pharmacies to make generic versions of the branded drugs, allowing telehealth companies such as Noom and Hims to offer low-cost alternatives as demand surged. Read Full Article… 

HVBA Article Summary

  1. Cessation of Compounded Semaglutide Sales: State-licensed compounding pharmacies and physicians must stop selling compounded semaglutide by April 22, while outsourcing facilities have until May 22 to cease production and distribution. Although exact copies of Ozempic and Wegovy are prohibited, modified versions can still be made if they comply with FDA regulations by altering dosage, ingredients, or administration methods.

  2. Supply Stabilization and Potential Disruptions: The FDA confirmed with Novo Nordisk that its manufacturing capacity can meet national demand, leading to the end of the semaglutide shortage. However, the agency cautioned about possible "intermittent and limited localized supply disruptions" as the product moves through the supply chain. Novo Nordisk continues to face "capacity limitations" and anticipates "periodic supply constraints."

  3. Ongoing Debate and Market Dynamics: The resolution of the semaglutide shortage reignites the debate between compounding pharmacies and brand-name GLP-1 manufacturers regarding safety and necessity. Drugmakers argue that the complex formulations of Ozempic and Wegovy cannot be safely replicated, while compounders question the manufacturers' ability to maintain consistent supply. Meanwhile, Novo Nordisk is expanding its manufacturing capacity with a $6.5 billion investment to meet growing demand.

Trump administration backs ACA preventive coverage mandate

By Jakob Emerson - The Trump administration plans to defend the ACA requirement that requires insurers to fully cover certain preventive services for their members. On Feb. 18, the Justice Department filed a brief with the Supreme Court, arguing in favor of maintaining the Biden administration's stance regarding the landmark case that centers on whether employers can exclude covered services on religious grounds. Read Full Article…

HVBA Article Summary

  1. Authority and Constitutional Challenge: The case challenges the authority of the U.S. Preventive Services Task Force (USPSTF) to mandate coverage for preventive services, including HIV-prevention medication (PrEP), arguing that the task force's recommendations are unconstitutional because its members are not Senate-confirmed. This raises questions about the separation of powers and the legal basis for enforcing preventive care mandates under the Affordable Care Act (ACA).

  2. Legal Developments and Court Rulings: In March 2023, U.S. District Judge Reed O'Connor ruled that USPSTF recommendations made after 2010 are not mandatory, and blocked the government from enforcing them among private insurers. However, in June 2023, the 5th U.S. Circuit Court of Appeals issued a mixed ruling, agreeing that Braidwood Management is not required to cover PrEP but reversing the broader blockage of preventive care mandates. The appeals court's decision was limited to the plaintiffs, preserving the mandate for other health plans.

  3. Implications and Supreme Court Review: The Justice Department, supported by HHS Secretary Robert F. Kennedy Jr., argues that USPSTF members are "inferior officers" legally appointed under the authority of the HHS Secretary, who can override recommendations. The case has significant implications for the ACA's preventive care provisions, which currently benefit over 100 million people. The Supreme Court's upcoming review will determine the constitutionality of USPSTF's authority and could reshape the landscape of preventive healthcare coverage in the U.S.

Heart disease remains the top cause of death in the U.S.

By Hannah Docter-Loeb - Cardiovascular disease remains the leading cause of death in the United States and accounted for 941,652 deaths in 2022, according to a report published by the American Heart Association. In the United States in 2022, heart disease and stroke killed more people than all forms of cancer and accidental deaths. Read Full Article…  (Subscription required)

HVBA Article Summary

  1. Leading Causes of Cardiovascular Deaths: Coronary heart disease was the primary cause of death attributable to cardiovascular disease at 39.5 percent, followed by stroke (17.6 percent), other cardiovascular diseases (17 percent), hypertensive diseases (14 percent), heart failure (9.3 percent), and diseases of the arteries (2.6 percent), according to the American Heart Association (AHA). Notably, more people died from cardiovascular causes in 2022 compared to 2021, which saw 931,578 cardiovascular deaths.

  2. Prevalence of Cardiovascular Disease: Nearly half of U.S. adults (48.6 percent) were affected by some form of cardiovascular disease between 2017 and 2020. The impact is notably higher among non-Hispanic Black adults, with 59 percent of women and 58.9 percent of men experiencing cardiovascular issues, highlighting significant racial disparities in heart health.

  3. Call for Preventative Measures and Health Equity: Despite advancements in clinical diagnosis and treatment, major cardiovascular risk factors such as obesity, high blood pressure, and diabetes remain prevalent. Keith Churchwell, a clinical professor at Yale School of Medicine and volunteer president of the AHA, emphasized the need for early prevention and equitable health access to effectively combat these risk factors and promote lifelong heart health.

How employers are enhancing health care benefits despite rising costs

By Christopher O’Shea - Health care costs in the U.S. continue to rise, with 2025 projected to see one of the highest increases in over a decade. In the past, employers often coped with rising prices by shifting costs to their employees or reducing benefits. But with today’s competitive job market, many are rethinking this approach. Companies are now focused on stabilizing benefits and supporting employee wellbeing, all while keeping their finances in check. Read Full Article…  (Subscription required)

HVBA Article Summary

  1. Maintaining Health Care Benefit Stability: Employers are prioritizing the stability of health care benefits to strengthen employee trust and well-being. By offering consistent and affordable health plans, companies enhance job satisfaction, reduce stress related to health expenses, and gain a competitive advantage in attracting and retaining talent.

  2. Implementing New Health Care Initiatives: Organizations are introducing innovative programs such as wellness initiatives, mental health resources, and telehealth services to better accommodate employee needs. These initiatives not only improve overall employee health but also have the potential to reduce long-term costs for both employers and employees.

  3. Managing Rising Health Care Costs: To address financial challenges, employers are focusing on preventive care, utilizing high-deductible health plans with health savings accounts, and promoting cost-saving measures like generic drug prescriptions and telehealth services. These strategies help maintain high-quality care while effectively managing expenses.

FDA declares semaglutide shortage over, spelling end to compounded GLP-1 market, for now

By Heather Landi - The Food and Drug Administration (FDA) on Friday announced that semaglutide, the active ingredient in weight loss drugs Ozempic and Wegovy, is no longer in short supply. The FDA's move is bad news for manufacturers of compounded semaglutide and the telehealth companies that have built up a market selling cheaper alternatives to branded weight loss drugs. Read Full Article…

HVBA Article Summary

  1. Regulatory Changes and Market Impact: The FDA's reclassification of the semaglutide shortage as "resolved" halts the compounding of semaglutide, impacting companies like Hims & Hers, whose shares dropped by 25%. Compounding pharmacies must cease production by April or May, depending on regulatory status, shifting the market back to branded versions from Novo Nordisk.

  2. Implications for Patients and Providers: Despite the FDA's resolution, localized supply disruptions may persist, affecting patient access to branded drugs. High costs of branded medications, like Wegovy and Ozempic, could push patients toward counterfeit alternatives. Providers express concerns about the affordability and continuous demand for weight loss treatments.

  3. Potential Legal and Political Developments: Legal challenges are emerging, including a lawsuit against the FDA by the Outsourcing Facilities Association. Additionally, political shifts, including a new HHS secretary critical of high drug prices, could influence future regulatory decisions, potentially supporting compounded medications as cost-effective alternatives.

Employee benefits: Multigenerational workforces, AI, Rx costs, and rising health care costs

By Kristen Beckman - Facing a range of political, economic and environmental uncertainties over the next several years, employers should focus on four key benefits and organizational health themes to build resiliency and hedge against risks, according to MarshMcLennan’s 2025 Employee Health & Benefits report.. Read Full Article…  (Subscription required)

HVBA Article Summary

  1. Supporting a Multigenerational Workforce: With four generations in the workforce, including a growing segment of workers over 65, organizations face challenges related to communication and problem-solving due to generational differences. However, fostering mutual understanding and leveraging mentorship opportunities can enhance learning, trust, and employee satisfaction. Employers should tailor benefits to meet the diverse needs of all age groups.

  2. Integrating Artificial Intelligence in HR and Workflows: AI adoption is rapidly increasing, impacting HR efficiency and organizational competitiveness. While nearly half of large organizations are dedicating funds to AI, careful implementation is crucial to avoid security, regulatory, and financial risks. Employers must focus on upskilling their workforce to smoothly integrate AI technologies.

  3. Managing Healthcare Costs and Pharmaceutical Spending: Rising healthcare expenses, driven by an aging population and chronic diseases, are prompting employers to explore cost-saving strategies. These include adopting biosimilar medications, renegotiating pharmacy benefit manager contracts, utilizing high-performance networks, and implementing reference-based pricing. By optimizing spending strategies, employers can better manage health care costs without compromising employee benefits.