Trump strikes deal with Pfizer aimed at lowering prescription drug prices

By Daniel Payne and Matthew Herper – President Trump announced on Tuesday that Pfizer has agreed to offer lower prices on its drugs to the Medicaid program and directly to patients, the first in what he said would be a series of deals intended to secure cheaper prescription medicines for the U.S. Pfizer also agreed to launch new medicines at prices “at parity” with those in other countries, the company and administration officials said. In return, provided Pfizer continues to invest in U.S. manufacturing, the company will not have to pay certain tariffs on drugs imported into the U.S., Trump said. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Pfizer Becomes First to Strike Drug Pricing Deal with Trump Administration: Pfizer is the first pharmaceutical company to finalize a pricing agreement with the Trump administration, pledging to offer many of its primary care drugs at discounts of 50% or more through a new purchasing platform, TrumpRx.gov. The deal also includes a provision for Medicaid to receive international-level pricing on Pfizer medications. In return, the company secured a three-year tariff exemption and committed to a $70 billion U.S. investment. While Pfizer listed examples of steep discounts on select drugs, the full scope and financial impact of the deal remain undisclosed.

2. Trump Administration Leverages Economic Pressure to Push Reform: In a broader campaign to lower drug prices, the administration sent formal letters to 17 major pharmaceutical companies demanding pricing parity with other wealthy nations, increased U.S. investment, and the development of direct-to-consumer sales channels. President Trump warned companies of possible 100% tariffs and emphasized that additional agreements with other manufacturers, including Eli Lilly, are forthcoming. Regulatory actions are also being pursued to give Medicare and Medicaid more leverage in reducing drug costs.

3. Impact on U.S. Patients Remains Uncertain as Experts Urge Caution: While the administration touts potential savings for Medicaid—which spent over $50 billion on drugs in 2023—health policy experts remain skeptical of the deal's broader effect. The discounted drugs account for only a small share of total U.S. prescriptions, and direct-to-consumer sales may not significantly lower out-of-pocket costs for most patients. Analysts suggest that the deal may serve more as a political and public relations victory than a structural shift in drug pricing.

ACA premium tax credit fight could burn small employers, insurers say

By Allison Bell – Health insurers want small employers to join the fight to keep the current federal premium tax credit subsidies for health insurance in place. The current subsidy levels are set to expire Dec. 31. Consumers can use the subsidies to pay for private health coverage purchased through HealthCare.gov or other Affordable Care Act public exchange programs. Most of the 24 million exchange plan users get individual or family coverage. But about 48% of U.S. adults under age 65 with individual or family coverage are self-employed, own small businesses, or work for businesses with fewer than 25 employees, according to KFF data cited by America's Health Insurance Plans. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Impact on Small Employers and Self-Employed Individuals: Nearly half of the 24 million people enrolled in ACA exchange plans are self-employed or work for small businesses with fewer than 25 employees. About 82% of these individuals rely on premium tax credit subsidies to afford their health coverage. The expiration of these subsidies could lead to significant financial strain on small business owners and their employees, potentially forcing job cuts, reduced hours, or business closures.

2. Subsidy Levels and Legislative Background: The premium tax credit subsidies were originally limited to individuals earning less than 400% of the federal poverty level, but the American Rescue Plan Act temporarily expanded these subsidies to higher income levels during the COVID-19 pandemic. This expansion allows more people at various income levels to qualify for assistance if premiums would otherwise be unaffordable. The current subsidy levels are set to expire on December 31, 2025, which could cause premium costs to rise sharply for many middle-income Americans.

3. Insurers' Advocacy and Potential Consequences: America's Health Insurance Plans (AHIP), a trade group for health insurers, is actively lobbying Congress to extend the current premium subsidy levels. They argue that failure to do so will harm small businesses and entrepreneurs by increasing out-of-pocket premium costs by as much as 75% for many middle-income individuals. Insurers also suggest that employer groups supporting the extension could benefit from increased lobbying support from health insurance organizations.

Lawsuit: CVS Health Looted Rite Aid Pharmacies, Stripped Them for Parts

By Luke Sullivan – Rite Aid - the national pharmacy chain in the middle of its second bankruptcy filing in two years - has filed a lawsuit against CVS Caremark, claiming that the pharmacy benefit manager fleeced it for $500 million with a “predatory” contract “scheme.” The lawsuit lays bare the latest example of how CVS Caremark and pharmacy benefit managers in the health care chain have bullied their way into some of America’s richest companies. CVS Caremark’s “predatory” process, as Rite Aid’s attorneys called it, is simple. Consolidate the market, push out competitors and raise prescription drug costs across the board. Read Full Article...

HVBA Article Summary

1. Allegations of Predatory Contracting: Rite Aid alleges that CVS Caremark engaged in a predatory contract scheme by retroactively billing Rite Aid pharmacies for prescriptions already filled and paid for, resulting in clawbacks totaling approximately $500 million. This practice allegedly forced Rite Aid into financial distress, contributing to store closures and sales. The lawsuit claims CVS Caremark used its market power to push out competitors and increase prescription drug costs.

2. Market Consolidation and Conflict of Interest: CVS Caremark, owned by CVS Health, controls access to patients through contracts tied to CVS Health’s insurance plans like Aetna and Medicare services. Rite Aid had to comply with CVS Caremark’s terms to serve these patients, despite CVS Health also operating over 9,000 retail pharmacies that directly compete with Rite Aid. This dual role raises concerns about anti-competitive behavior and conflicts of interest within the pharmacy benefit management industry.

3. Industry Context and Regulatory Scrutiny: Pharmacy benefit managers (PBMs) like CVS Caremark, OptumRx, and Express Scripts dominate over 80% of prescriptions in the U.S. and are owned by large health insurers. The big three PBMs face Federal Trade Commission investigations for alleged anti-competitive practices. CVS Caremark was recently fined $290 million for overcharging Medicare patients, highlighting ongoing legal and regulatory challenges in the PBM sector.

Voluntary benefits aren't voluntary anymore

By Bijit Das – When it comes to employee benefits, there’s a growing gap between what employers offer and what employees need—and nowhere is that more evident than in supplemental health coverage. These “voluntary” benefits—like accident, hospital indemnity, and critical illness insurance—have long been treated as optional add-ons. But today, for millions of workers facing rising costs, medical debt, and shrinking safety nets, they’re anything but optional. In Prudential’s 2025 Benefits & Beyond study, nearly a quarter of employees said they expect these benefits to be part of a modern workplace offering. But many don’t even know if they’re available through their employer. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Voluntary Benefits Are Becoming Essential: Traditionally considered optional, voluntary benefits such as accident, hospital indemnity, and critical illness insurance have become crucial for many employees due to rising healthcare costs, medical debt, and reduced safety nets. These benefits provide financial protection that many workers now see as necessary rather than optional, reflecting a shift in employee needs and expectations in the modern workplace.

2. Communication and Awareness Gaps Exist: Despite the growing importance of voluntary benefits, many employees are unaware if these benefits are even offered by their employers. This lack of communication represents a missed opportunity for employers to support their workforce’s financial wellbeing and leaves employees vulnerable to financial hardship in case of unexpected medical events. Employers need to improve how they frame and explain these benefits to ensure employees understand their value and availability.

3. Business Impact of Offering Voluntary Benefits: Employees who view their benefits as modern and comprehensive are significantly more likely to be satisfied with their jobs and remain with their employers. According to research cited, there is a 20 percentage point increase in employee satisfaction when benefits are perceived as modern. For employers, repositioning voluntary benefits as core components of employee support can enhance workforce retention and trust, which are critical in today’s challenging economic environment.

What ACA Policy Shifts Mean for Employer-Based Health Benefits

By Pietje Kobus – Healthcare subsidies now play a key role in the ongoing standoff between Democrats and Republicans over preventing a government shutdown before October 1. Congress has until September 30 to extend healthcare tax credits to prevent sharp premium increases for millions of Americans. With some ACA (Affordable Care Act) subsidies set to expire, employers are facing difficult decisions regarding health benefits. While costs are rising, plan options are shrinking, and employees are asking for more flexibility. Read Full Article...

HVBA Article Summary

1. Expiration of ACA Subsidies and Market Impact: The ACA subsidies, including expanded advanced premium tax credits introduced during COVID, are set to expire at the end of 2025. These subsidies have lowered healthcare costs for many Americans and encouraged healthier individuals to enroll, stabilizing the risk pool. Their expiration is expected to lead to higher premiums, a shrinking market, and potentially more uninsured individuals, which could strain healthcare providers and increase costs indirectly for employers.

2. Employer and Employee Challenges: Employers are facing rising healthcare costs and fewer plan options as ACA subsidies expire, forcing difficult decisions about health benefits. The potential increase in uninsured individuals may lead to more emergency room visits, with hospitals incurring unrecoverable expenses that ultimately impact employers through higher insurance rates or implicit taxes. Many employers may pass increased costs onto employees, affecting affordability and access to care.

3. Role of ICHRA Models and Policy Recommendations: Individual Coverage Health Reimbursement Arrangements (ICHRA) offer a flexible, employer-funded approach that allows employees to purchase individual health insurance with tax-free funds. This model can complement traditional ACA plans, potentially improving market health by bringing more employer populations into the ACA risk pool. Policy experts emphasize the need for timely resolution of subsidy extensions, market stabilization, and consumer-centered reforms to ensure long-term sustainability and to avoid a healthcare system reckoning.

High-deductible health plan enrollment surges among older workers

By Joel Kranc – Enrollment in High-Deductible Health Plans (HDHP) is on the rise. The AARP (American Association of Retired Person) says that over the past decade and a half, employers have come to rely on HDHPs as a common coverage option. The KFF Annual Benefits Survey shows that between 2011 and 2024, around one-quarter of employers offered an HDHP to employees. The Association’s analysis showed that between 2012 and 2022, the share of older workers enrolled in an HDHP increased from 30% to 53%, which is a 77% increase. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Significant Growth in HDHP Enrollment Among Older Workers: Over the past decade, enrollment of older workers in high-deductible health plans has surged from 30% in 2012 to 53% in 2022, marking a 77% increase. This trend reflects a growing reliance by employers on HDHPs as a common health coverage option. By 2022, 16.4 million older workers were enrolled in HDHPs, indicating widespread adoption across this demographic.

2. Prevalence of HSA-Qualified HDHPs and Enrollment Gaps: Nearly 90% of HDHPs offered by employers in 2024 are HSA-qualified, yet less than half of older workers enrolled in HDHPs also have health savings accounts (HSAs). Enrollment in HDHPs with HSAs among older workers increased by 13 percentage points from 2012 to 2022, but disparities exist, with higher-income older workers more likely to have both HDHPs and HSAs compared to lower-income workers.

3. Income-Related Disparities in HDHP and HSA Enrollment: The data reveals a persistent gap in combined HDHP and HSA enrollment based on income levels. In 2022, 52% of high-income older workers had both an HDHP and an HSA, compared to only 30% of low-income older workers. This disparity aligns with broader research showing that higher-income adults are more likely to utilize HSAs, highlighting potential barriers for lower-income workers in accessing these savings options.

How leaders can help address the health insurance literacy gap

By Paola Peralta – Employees prioritize better insurance coverage, but the majority don't understand what they're even signing up for. Approximately half of insured Americans have difficulty understanding at least some aspects of their health plans, according to a recent report from the Kaiser Family Foundation (KFF), with 58% of insured adults experiencing a problem with their health insurance in the past year. While much of what makes the health insurance system difficult to navigate is out of benefit leaders' control, they can help move the process along. "Even for the many of us that have been in healthcare and navigating the healthcare system for many years, it's still complicated," says Ryan Bullock, chief strategy officer at Aeroflow Health. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Prevalence of Health Insurance Literacy Issues: About half of insured Americans struggle to understand their health insurance plans, with 58% reporting problems in the past year. This widespread confusion can lead to employees facing unexpected costs and difficulties in accessing covered services, which in turn affects their satisfaction and trust in their benefits.

2. Impact on Productivity and HR Burden: Confusion over coverage details causes employees to spend time resolving insurance issues, which reduces productivity and increases stress. Additionally, HR and benefits teams face increased administrative workload supporting employees through these challenges, diverting resources from strategic initiatives and potentially increasing employee turnover.

3. Strategies for Leaders to Improve Literacy: Benefit leaders should tailor insurance education to the specific needs of their workforce, such as focusing on family planning for a predominantly female population or explaining high deductible plans to younger employees. Effective communication and collaboration with plan sponsors to provide relevant data and support can enhance employees' understanding and engagement, ultimately fostering a positive organizational culture.