Trump issues executive order to slash drug costs: 7 notes

By Alexandra Murphy - President Donald Trump signed an executive order May 12 directing drugmakers to sell medicines in the U.S. at prices similar to those offered in other wealthy countries, or face penalties and enforcement actions. The move tasks HHS Secretary Robert F. Kennedy Jr. with setting target prices to bring U.S. drug costs “in line with comparably developed nations,” known as a “most favored nation” model. If drugmakers do not make progress toward those targets, the order directs federal agencies to explore ways to implement most favored nation pricing. Read Full Article…

HVBA Article Summary

1. Aggressive Price Reduction Strategy with Enforcement Backstops: The executive order gives HHS 30 days to engage drugmakers on price reduction goals. If insufficient progress is made, HHS is directed to propose a rulemaking plan for “most favored nation” pricing—tying U.S. prices to those in other wealthy countries. It also authorizes trade and export restrictions, antitrust investigations, and potential drug importation if domestic negotiations stall.

2. Expanded Scope Beyond Medicare with Legal Ambiguity: Unlike the blocked 2020 attempt, this revived plan targets drugs under Medicare, Medicaid, and private insurance. However, the order lacks a clear legal enforcement mechanism and its interplay with ongoing Medicare negotiations under the Inflation Reduction Act remains uncertain, especially since 2024 drug price negotiations are already underway and expected to save over $6 billion.

3. Targeting GLP-1 Drugs Amid Industry Pushback: Although specific drugs haven't been formally named, officials signaled GLP-1 medications like Ozempic, Wegovy, and Zepbound are likely targets. The pharmaceutical industry is divided: some groups warn the policy could harm innovation, while others support using trade pressure to force foreign nations to raise drug payments and reduce the burden on U.S. patients.

CMS takes aim at provider taxes in proposed rule

By Susanna Vogel - Provider taxes have been around in some form since the 1980s, and every state, except Alaska, now has at least one provider tax in place to help finance Medicaid, according to a March analysis from KFF. The policies are designed to inflate Medicaid spending on paper to allow states to recoup more federal reimbursement dollars. Providers argue the maneuver is both legal and needed. Even the nation’s wealthiest health systems say they lose money covering Medicaid patients, and the state supplemental payments they receive help them plug holes in their budget. Read Full Article…

HVBA Article Summary

1. CMS Targets Medicaid Provider Tax Loopholes: A newly proposed CMS rule aims to overhaul how states use provider taxes to draw down additional federal Medicaid funds. The agency argues that states are exploiting complex tax arrangements to inflate federal contributions, allowing them to fund state initiatives—such as Medicaid for noncitizens—without contributing proportionally themselves.

2. Political Push to Rein in Spending and Increase Transparency: The proposal comes amid a broader GOP push to cut nearly $900 billion in federal spending, including moves to freeze current provider tax rates, block new ones, and cap state-directed Medicaid payments at Medicare levels. Conservative groups and CMS officials are calling for greater clarity around how these funds flow and are used.

3. Significant Financial and Operational Impacts Ahead: CMS estimates the rule could save taxpayers over $30 billion in five years, but industry analysts warn of potential strain on healthcare providers. The proposed changes could limit states’ abilities to support Medicaid payments, slow supplemental funding approvals, and ultimately compress margins for providers, prompting some to reassess their reliance on Medicaid-related revenues.

8 in 10 Americans Underestimate the Staggering Cost of Long-Term Care

By Adam Hardy - Most Americans seriously underestimate the cost of caregiving for themselves or a loved one when they can no longer cook, clean, bathe or do other basic daily tasks on their own. Of U.S. workers who said they expect to provide long-term care in the future, 8 in 10 estimate the cost at under $100,000 a year, according to a new study from the nonprofit Employee Benefit Research Institute, or EBRI. Read Full Article…

HVBA Article Summary

1. Widespread Underestimation of Long-Term Care Costs: While 60% of survey respondents estimated annual long-term care costs to be under $50,000, actual average costs are far higher—about $121,000 for less than a year of paid care, according to HHS. Most respondents significantly underestimate both the cost and duration of care, which typically spans 3.1 years, largely supported by unpaid family or friends until paid services are needed for about 10 months.

2. Misconceptions About Coverage Sources: The EBRI survey revealed that 43% of Americans mistakenly believe Medicare covers long-term care, though it does not. Instead, Medicaid covers the largest share (43%) of the average long-term care bill, but only for those who meet strict income and asset qualifications. This confusion leaves many ill-prepared for the financial realities of care in old age.

3. Limited Preparedness and High Out-of-Pocket Risk: Despite long-term care posing a major financial risk, most Americans lack adequate preparation. Even with some public assistance or private insurance, the average out-of-pocket cost for long-term care remains $44,800 per person. The majority of the burden is often carried by family caregivers and retirees who do not qualify for Medicaid assistance.

UnitedHealth Group CEO steps down

By Jakob Emerson - UnitedHealth Group CEO Andrew Witty has stepped down for personal reasons and chairman and former CEO Stephen Hemsley will replace him. Mr. Hemsley served as CEO from 2006 to 2017 and will remain chairman of the company’s board of directors. Mr. Witty will serve as a senior adviser. Read Full Article…

HVBA Article Summary

1. Earnings Guidance Withdrawn Amid Rising Costs: UnitedHealth has suspended its 2025 earnings outlook due to unexpectedly high and widening care utilization, particularly in its Medicare Advantage business. The company reported that utilization in the first quarter was nearly double expectations, leading to a sharp earnings cut and a 20% drop in share price on April 17.

2. Leadership Transition During Turbulent Times: CEO Andrew Witty, who led the company through a series of crises including a cyberattack and the death of UnitedHealthcare's CEO in 2024, announced his departure. The board expressed gratitude for his leadership during an exceptionally challenging period, while signaling confidence in long-term growth under new leadership.

3. Return to Long-Term Growth Expected by 2026: Despite the disruption, UnitedHealth remains optimistic about its future, reaffirming its commitment to achieving its long-term annual growth target of 13% to 16% starting in 2026. Executives emphasized continued opportunities to improve care delivery and performance across its health services and insurance arms.

IRS Announces 2026 HSA Limits

By Remy Samuels - The IRS has announced the inflation-adjusted 2026 calendar year contribution limits for health savings accounts and HSA-compatible high-deductible health plans. Starting in 2026, the new HSA contribution limit will be $4,400 for an individual with self-only coverage under a high-deductible health plan—a $100 increase from this year. The limit for an individual with family coverage under an HDHP is $8,750—a $200 increase, according to the IRS announcement. Read Full Article…

HVBA Article Summary

1. Triple-Tax Advantage of HSAs: Health Savings Accounts (HSAs) provide a rare combination of tax benefits—contributions are made pre-tax, invested funds grow tax-free, and withdrawals for qualified medical expenses are also tax-free. This “triple-tax advantage” makes HSAs a powerful tool for long-term healthcare savings. However, employees must be enrolled in a high-deductible health plan (HDHP) to contribute, which ties eligibility to specific insurance requirements.

2. HDHP and HRA Limits for 2026: For plan year 2026, high-deductible health plans (HDHPs) are defined by the IRS as having minimum deductibles of $1,700 for self-only coverage and $3,400 for family coverage. The total annual out-of-pocket expenses, including copayments and deductibles, cannot exceed $8,500 for individuals or $17,000 for families. Additionally, the cap for newly available employer contributions to “excepted benefit” Health Reimbursement Arrangements (HRAs) will rise to $2,200, providing more flexibility in covering expenses like vision, dental, and copays.

3. HSA Balances Growing Rapidly: The popularity and financial value of HSAs are climbing steadily. According to research from Devenir, total HSA balances increased by 19% in 2024 compared to the previous year, reaching nearly $147 billion. This growth underscores not only increased enrollment in HSA-compatible plans but also a broader recognition of HSAs as a long-term investment and healthcare planning strategy.

Tirzepatide Tops Semaglutide for Weight Loss

By Becky McCall, Mac, MScPh - In the first head-to-head trial of its kind, tirzepatide (Mounjaro for type 2 diabetes and Zepbound for obesity; Eli Lilly) produced significantly greater weight loss, and reduction in waist circumference, than semaglutide (Ozempic for type 2 diabetes and Wegovy for weight loss; Novo Nordisk) in adults with obesity but without type 2 diabetes over 72 weeks in the SURMOUNT-5 trial. Read Full Article… 

HVBA Article Summary

1. Tirzepatide Outperforms Semaglutide in Weight Loss: In the SURMOUNT-5 trial of adults with obesity, tirzepatide led to significantly greater weight loss than semaglutide over 72 weeks—20.2% vs. 13.7% average reduction from baseline weight. Nearly twice as many participants on tirzepatide achieved ≥25% weight reduction, with superior improvements in waist circumference and cardiometabolic markers like blood pressure and HDL cholesterol.

2. Dual Mechanism Drives Superior Outcomes: This was the first head-to-head trial comparing tirzepatide (a dual GIP/GLP-1 agonist) and semaglutide (a GLP-1 agonist) for weight loss. The results suggest that tirzepatide’s dual mechanism provides additive benefits over GLP-1 monotherapy, supporting the idea that combining mechanisms can overcome weight-loss plateaus and deliver more robust metabolic improvements.

3. Safety and Clinical Use Considerations: Both drugs had similar safety profiles, with mostly mild-to-moderate gastrointestinal side effects and low discontinuation rates (6.1% for tirzepatide vs. 8.0% for semaglutide). Clinicians view both as effective options, but prescribing decisions may hinge on drug availability, healthcare system constraints, and local treatment guidelines.

Let’s help small businesses dare to think big

By Steve Wolin - Owners of small businesses face numerous ongoing issues – adequate cash flow, rising rents and onerous taxes, among others – but few are more serious than that of health insurance for employees. Now with new worldwide tariffs threatening to trigger higher costs for health care services, small businesses are feeling an uncertainty about health insurance that borders on fever pitch. Read Full Article… ^{_{(Subscription required)}} 

HVBA Article Summary

1. Tariffs and Cost Shifting Are Raising Financial Pressures Across the Healthcare System: A large majority (82%) of healthcare leaders expect tariffs to increase hospital costs by 15%, with 90% of hospital finance executives planning to pass those costs onto payers and patients. Additionally, 84% of insurers foresee higher claims costs due to rising prices for pharmaceuticals and medical devices.

2. Small Businesses Face Structural Disadvantages in Providing Health Benefits: Only 48% of small firms offer health coverage, compared to 97% of large employers, and their employees typically pay higher premiums and deductibles for less protection. Small businesses are disadvantaged by limited risk pooling, cost-sharing inefficiencies, and significant administrative burdens—especially without dedicated HR staff.

3. ICHRAs Offer a Promising Path Forward for Small Employer Health Coverage: Individual Coverage Health Reimbursement Arrangements (ICHRAs), introduced in 2019, allow employers to contribute tax-advantaged funds for employees to buy individual health plans. Adoption is growing rapidly (up nearly 30% from 2023 to 2024), with some employers saving up to 29% at renewal. Broader adoption could be accelerated by federal legislation and state-level tax incentives.