Skyrocketing health premiums push SMBs to the brink

By Allison Bell – Founders of high-growth startups are horrified by what they see when they look at the latest price quotes for individual health coverage, small-group insured coverage and stop-loss insurance this year. That's the assessment of Josh Buchness, a vice president at Founder Shield, a Baldwin Group affiliate that helps startups with employee benefits plans as well as property and casualty coverage.” When brokers bring out the tables showing what's happening to rates now, "many small business owners are panicking," Buchness said. "Very few small businesses can shoulder such a massive increase." Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Sharp Cost Increases in Health Coverage: Small business owners across the U.S. are facing steep and often unexpected jumps in health insurance costs, with average premium increases ranging from 50% to 75% per worker — and in extreme cases, such as Nebraska, reaching up to 300%. These spikes affect not only traditional employer-sponsored plans but also individual coverage through Affordable Care Act exchanges. Even self-insured employers using stop-loss insurance are struggling, as catastrophic claims have surged and insurers are tightening underwriting while sharply raising premiums.

2. Advisors Proposing Cost-Sharing and Alternative Strategies: To help employers manage these escalating costs, benefits advisors are suggesting a variety of mitigation tactics. These include shifting part of the financial burden to employees through higher deductibles or coinsurance, creating narrow or custom provider networks to control costs, and leveraging arrangements like Individual Coverage HRAs or Qualified Small Employer HRAs to give workers funds for their own policies. Some advisors also recommend partnering with Professional Employer Organizations (PEOs) to centralize benefits administration and gain access to larger-group pricing, though these options require careful vetting.

3. New Opportunities Amid Market Disruption: Despite widespread anxiety over rising health coverage costs, the situation is also creating openings for benefits professionals and consultants. The urgency to control expenses is pushing many small employers to consider strategies they would have dismissed in the past, from alternative funding models to nontraditional benefit structures. This shift is fostering innovation in the small-business benefits market, with advisors now able to present more creative, customized solutions that align with each employer’s financial reality.

Is Mark Cuban Wrong About Employers, PBMs and Drug Prices?

By Arundhati Parmar – Mark Cuban has been chiding self-insured employers for a while, saying that they have more power to change healthcare than any politician. One has to only look at his tweets to know that he has asked employers to stop letting insurance companies and pharmacy benefit managers dictate what they can offer to employees. He has exhorted them to “demand transparency and pay cash prices [for drugs] when it’s cheaper.” It was a theme that he returned to in his main stage appearance at the recently concluded HLTH conference that draws many prominent healthcare executives to Las Vegas annually. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Employers Have Limited Influence Over Local Healthcare Markets: While Mark Cuban charges that employers are complicit in healthcare costs and could push for change, industry professionals argue otherwise. For example, although 154 million Americans get their health insurance via employer coverage and 63% of those are in self‑insured plans, these organizations still face structural limitations. At State Farm Insurance, one of their largest hubs still has only 67,000 employees in a large region — and just seven staffers work on health‑benefit strategy. The implication: even major employers represent only a fragment of local healthcare ecosystems and therefore can’t unilaterally reshape provider networks or pricing.

2. Transparency Alone Doesn’t Automatically Lead to Cost Reductions: Sementi confirmed that her employer has a “transparent contract” with its pharmacy benefit manager (PBM). But she emphasised that this clarity did not translate into lower costs — it simply revealed how money flows through the system. She also identified the two parties she believes are driving high costs: pharmaceutical manufacturers (with high drug prices and profit margins) and health systems. In other words, although employers are demanding transparency, the evidence suggests that this measure by itself falls short of reducing overall healthcare spending.

3. Innovative Models Offer Promise But Face Real‑World Constraints: Providers like Carrum Health and Lantern are working with self‑insured employers to reduce costs by connecting employees to high‑quality providers and creating competition among providers. According to Carrum, costs for certain procedures can drop by as much as 45% when these models are in place. However, the article also highlights that employers face mounting cost pressures: healthcare costs are forecasted to rise by 9% next year—“the highest it has been in a decade.” Moreover, rural markets (such as Nebraska, as one panelist noted) may lack adequate provider networks, limiting how far these models can stretch.

UnitedHealth pays its own physician groups 17% more than outside ones, study shows

By Tara Bannow – UnitedHealth Group pays its own physician practices much more than it pays competing practices, a new study finds, reinforcing STAT’s own analysis on the subject and presenting fresh evidence that the conglomerate may be skirting a rule designed to curb health insurer profits. UnitedHealth’s insurance arm, UnitedHealthcare, pays practices under its UnitedHealth-owned Optum umbrella 17% more on average for common services than it pays non-Optum practices in the same region, according to the study, published Monday in Health Affairs. In areas where its insurance arm has a large market share, it pays Optum practices 61% more. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. UnitedHealthcare Pays Optum More Than Market Average: A recent study found that UnitedHealthcare consistently paid its affiliated physician group, Optum, significantly more than other providers in the same regions — in some cases, as much as 111% more for common services. Even independent physicians received higher payments from UnitedHealthcare compared to rival insurers. This suggests that the insurer may not be using its market power to reduce costs for consumers, as typically expected, but rather may be supporting its own medical groups to enhance market position.

2. Vertical Integration May Be Used to Bypass Medical Loss Ratio Rules: Experts cited in the study theorize that UnitedHealth's strategy of paying its own subsidiaries more could be a method to retain profits while appearing to comply with federal regulations. The Affordable Care Act’s medical loss ratio rule requires insurers to spend a set percentage of premium dollars on patient care, limiting administrative profits. By shifting money within its own integrated structure — from insurance arms to provider arms — UnitedHealth may be maximizing revenue without violating the letter of the law, raising ethical and regulatory concerns.

3. Study Faces Criticism and Limitations: UnitedHealth strongly rejected the study’s findings, arguing that the data was selectively chosen and unrepresentative. The company emphasized that its payments are aligned with market standards necessary for competitiveness. Critics of the study also pointed out a significant limitation — the sample contained only 705 instances of UnitedHealthcare payments to Optum providers, making up less than 1% of the dataset. Nevertheless, independent health economists believe the findings provide valuable insight into the financial dynamics of insurer-provider integration and support the need for deeper scrutiny, especially in light of an ongoing Department of Justice antitrust investigation.

Financial Wellness Programs Can Help Improve Employee Performance

By Kelli Korducki – Financial well-being is about more than a sense of peace and security. Ample research shows that a lack of financial stress is directly linked to improved mental and physical health outcomes—and vice versa. The adverse effects of financial anxiety have direct implications for workers and the organizations they serve. A 2024 report from the TIAA Institute and consulting firm High Lantern Group found that 42% of U.S. adults say money takes a toll on their mental health, with financial stress contributing to a 34% rise in missed work and lateness. The report also found that workers under financial strain are five times more likely to be preoccupied with money matters while working and tend to take roughly twice as many sick or personal days as those who are not financially stressed. Read Full Article...

HVBA Article Summary

1. Financial Wellness is a Business Priority: Employers are increasingly recognizing that employee financial stress directly impacts productivity, recruitment, and retention. According to experts like Kevin Gaston of Vestwell, organizations are prioritizing integrated financial wellness programs that streamline decision-making and support multiple goals through a single platform. This shift reflects a growing understanding that even small financial improvements—such as an additional $5,000 in annual income—can measurably enhance both life expectancy and quality of life, making financial well-being a cornerstone of workplace performance.

2. Holistic and Personalized Support is Gaining Traction: Financial stress is widespread across the U.S. workforce, with 80% of workers holding non-mortgage debt and 25% carrying at least $10,000 in credit card debt, according to the Employee Benefit Research Institute’s 2024 Workplace Wellness Survey. In response, companies are offering educational webinars and one-on-one sessions to help employees make informed money decisions. As Jamie Sieja of Flex HR notes, smaller firms are joining larger organizations in providing these benefits, signaling a shift toward holistic wellness programs that include financial, physical, mental, and social coaching—trends expected to become essential for staff retention by 2026.

3. Customized Benefits are Driving Engagement: Employers are realizing that financial needs vary widely, and “one-size-fits-all” solutions no longer suffice. Tailored programs now address goals such as student loan repayment, emergency savings, 529 education plans, and health savings accounts. The SECURE 2.0 Act of 2022 has further accelerated this trend, with 14% of organizations offering student loan repayment programs in 2024, up from just 4% in 2019. Real-world examples like Evolve Manufacturing’s emergency savings program—matching employee contributions of $10–$20 per paycheck—demonstrate how even small, flexible benefits can help workers handle unexpected expenses, reduce financial anxiety, and build long-term financial confidence.

4 open enrollment tactics from a benefits veteran

By Lee Hafner – After more than 25 years in the benefits space, Carrum Health's chief commercial officer Matt Eurey emphasizes one universal piece of advice: Leaders will see a difference with the right, proactive approach to open enrollment. From a mandated enrollment process to creative education, communication and engagement tactics, businesses stand to see better outcomes when employees are offered a more hands-on open enrollment (OE) experience, says Eurey. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Mandated vs. Passive Enrollment: Mandated (active) enrollment is more effective than passive enrollment because it compels employees to review their benefits and make informed choices. Eurey highlights that passive enrollment leads to disengagement, while mandated enrollment helps employees select more suitable plans and allows employers to manage costs more effectively. This proactive approach creates accountability and ensures employees are better aligned with benefit programs that support both their needs and organizational goals.

2. Strategic Communication and Education: A clear and engaging communication strategy enhances benefit literacy. Eurey emphasizes explaining what the benefits are, why they matter to employees, and how they support business goals. Using interactive learning methods and incentives such as raffles can make the open enrollment process more engaging and help employees understand complex benefit options more easily. This transparency and interactivity foster trust and encourage employees to take full advantage of available offerings.

3. Leveraging Technology and In-Person Engagement: Technology tools — like cost estimators, preloaded spending data, and QR code links — empower employees to make data-driven decisions and act immediately. Complementing digital tools with traditional communication and in-person events, such as health screenings and benefit fairs, deepens participation and personal connection to the enrollment process. These combined approaches make benefits more accessible, encourage continuous engagement, and help employees connect their personal health data with their benefit choices for better outcomes.

Novo Nordisk's Obesity Pill Shows Cardiovascular Benefits, Comparable Efficacy to Injection

By Jacob Gronholt-Pedersen – Wegovy-maker Novo Nordisk presented new data on Wednesday showing its experimental weight-loss pill improved blood sugar control and reduced cardiovascular risk factors, bolstering the Danish drugmaker's case for the treatment ahead of an expected U.S. approval by year-end. If that goes ahead, the pill would be the first oral GLP-1 treatment approved for weight management. New analyses from the OASIS 4 clinical trial, presented at ObesityWeek 2025 in Atlanta, showed oral semaglutide 25 mg delivered cardiovascular benefits and weight loss comparable to the company's blockbuster injectable Wegovy. Read Full Article...

HVBA Article Summary

1. Regulatory Outlook and Clinical Results: The U.S. FDA is reviewing Novo’s application for the oral form of Wegovy, with a decision anticipated by the end of the fourth quarter. If approved, Novo intends to launch the product shortly thereafter. Results from the OASIS 4 clinical trial demonstrated strong efficacy, showing an average 16.6% reduction in body weight and significant improvements in blood glucose control—71.1% of participants with prediabetes returned to normal levels compared with 33.3% on placebo. An indirect comparison with the earlier STEP 1 injectable trial suggests the oral pill delivers similar benefits in weight loss and cardiometabolic health.

2. Business and Financial Context: Despite optimism around the new oral version, Novo recently trimmed its full-year profit and sales forecasts due to slower growth momentum. However, the company’s stock gained following a better-than-expected Medicare pricing agreement that could improve long-term affordability and market reach. The company is navigating a challenging phase marked by a share price decline, decelerating sales, and leadership changes, including a CEO transition and board restructuring aimed at restoring stability and investor confidence.

3. Commercial Strategy and Partnerships: Novo plans to make the oral Wegovy pill widely available through major telehealth platforms such as Ro and WeightWatchers, expanding access and convenience for patients. The company is also exploring a subscription-based pricing model to make ongoing treatment more affordable. Additionally, discussions are underway with Hims & Hers Health to offer both oral and injectable Wegovy through its digital platform, signaling a broader push to integrate prescription weight-loss treatments into the fast-growing online health ecosystem.

Cigna stock drops sharply on PBM rebate phase-out and profit warning

By John Tozzi – Cigna Group’s pledge to upend the way medicine is priced spooked Wall Street after the company warned the move would hurt profits in the next two years. The company’s shares closed down 17% Thursday, their worst one-day drop since 2008, after Cigna executives warned of the margin pressure during an otherwise routine earnings call. It’s evidence that the company’s plan to eliminate many drug rebates — opaque payments that fueled years of attacks on Cigna and its peers — will hit its bottom line. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Cigna is pivoting its pharmacy benefits business model: The company plans to move away from traditional drug rebate structures within its Express Scripts unit, opting instead for up-front discounts negotiated directly with drugmakers. This aims to lower patient costs, improve pharmacy reimbursements, and address longstanding criticism of pharmacy benefit managers (PBMs) from policymakers, employers, and drug manufacturers. The overhaul represents a major shift in how billions of dollars circulate through the U.S. drug supply chain, signaling a broader move toward transparency in drug pricing.

2. Short-term profit pressure and market reaction: Cigna warned of a decline in profits from its PBM segment (around 30% of operating profit) due to lower margins on renewed contracts and transition costs tied to the new model. This unexpected forecast triggered a major stock selloff, despite the company’s solid quarterly earnings and expectations for longer-term growth in 2026. Analysts noted that while the selloff may have been excessive, investors are wary of how quickly Cigna can offset these near-term financial pressures.

3. Industry and stakeholder responses: The shift drew praise from drugmakers like Eli Lilly, which see it as beneficial for patients and payers, but analysts remain skeptical about Cigna’s optimistic earnings outlook. The change could significantly reshape how money flows among drug companies, insurers, and employers, signaling broader potential disruption in the U.S. drug pricing and reimbursement system. Some experts caution that much of Cigna’s current profit depends on opaque pricing differences, and eliminating rebates could expose previously hidden margins.