UnitedHealth’s $4.3 Billion Quarter – Brought to You by Uncle Sam

By Wendell Potter – Despite losing tens of thousands of enrollees in its commercial and Medicaid health plans in the third quarter of this year, UnitedHealth still managed to make $4.3 billion in profits during those three months. Investors were initially impressed when the company reported its earnings [Tuesday] morning, sending the share price up 4%. Later in the day, though, after looking more closely at all the numbers and hearing UnitedHealth’s executives talk about the various “headwinds” the company likely will continue to face for the rest of the year and beyond, the stock price dipped again and was down more than 2% at noon [yesterday]. Read Full Article...

HVBA Article Summary

1. Medicare Advantage Drives Profitability: UnitedHealth’s significant profits in the third quarter were largely fueled by revenue from Medicare Advantage plans, despite a decline in commercial and Medicaid enrollment. The company receives much higher per-enrollee payments from the federal government for Medicare Advantage members compared to its commercial customers. This reliance on government funding highlights the central role of public programs in the insurer’s financial success.

2. Taxpayer Funding Dominates Revenue Streams: A substantial portion of UnitedHealth’s health plan revenues now comes from taxpayer-funded programs, including Medicare Advantage, Medicaid, and subsidies for ACA marketplace plans. The article notes that 78% of UnitedHealthcare’s health plan revenues are derived from government sources, not counting additional subsidies for ACA enrollees. This underscores the extent to which public funds underpin the company’s business model.

3. Vertical Integration and Self-Dealing Concerns: UnitedHealth’s strategy of acquiring healthcare facilities and integrating services through its Optum division has increased the proportion of internal transactions within the company. The article points out that 28% of UnitedHealthcare’s revenues are now spent on services provided by Optum, raising questions about competition and the impact on independent healthcare providers. This trend may make it harder for non-affiliated providers to compete and could influence the broader healthcare landscape.

Cigna’s Rebate-Free Pharmacy Model: Three Realities Behind Its Latest Push to Pop the Gross-to-Net Bubble

By Adam J. Fein, Ph.D. – On Monday, Cigna announced that it would be abandoning traditional manufacturer rebates and moving to a new, “rebate-free” approach—essentially a point-of-sale (POS) rebate model paired with a cost-plus pharmacy reimbursement framework. Here’s the press release. Moving manufacturers’ rebates and discounts to the point of dispensing is a big win for patients, who can share in the savings that pharmacy benefit managers (PBMs) negotiate with drugmakers. It's a practical, patient-friendly step toward shrinking the gross-to-net bubble that has inflated out-of-pocket costs for years. Read Full Article...

HVBA Article Summary

1. Patient Impact and Model Structure: Cigna’s new rebate-free pharmacy model aims to pass manufacturer rebates and discounts directly to patients at the pharmacy counter, which could lower out-of-pocket costs and improve medication adherence. The model combines point-of-sale rebates with a cost-plus pharmacy reimbursement framework. While this approach is positioned as a patient-friendly reform, its real-world impact will depend on how widely it is adopted by plan sponsors and how it is implemented across different insurance products.

2. Adoption Challenges Among Plan Sponsors: Despite being promoted as a standard offering, Cigna’s rebate-free model will be optional for commercial clients and is expected to see gradual uptake. Many plan sponsors currently use rebates to offset overall healthcare costs and reduce premiums, rather than directly lowering pharmacy costs for patients. Surveys indicate that only a small percentage of employers currently share rebates at the point of sale, and analysts predict that only about half of Cigna’s commercial business will transition to the new model by 2031, highlighting the slow pace of industry change.

3. Transparency and PBM Revenue Streams: The move to a rebate-free model is partly a response to ongoing criticism about the lack of transparency in pharmacy benefit manager (PBM) revenue sources. While the new approach may improve perceptions of transparency, PBMs like Express Scripts now generate significant profits from other sources, such as specialty drug dispensing and manufacturer fees, which remain opaque to plan sponsors. As a result, the model may not fully address concerns about PBM business practices, and the broader push for transparency and reform in the pharmacy benefit space is likely to continue.

UnitedHealthcare plans 11% premium increase, while employers demand more value

By Allison Bell – UnitedHealthcare thinks that it can persuade employers to pay more for health coverage in 2026, but employers are looking hard for ways to get more out of each dollar spent. UnitedHealthcare runs UnitedHealth Group's health insurance businesses. Tim Noel, the chief executive officer of the UnitedHealthcare businesses, said Tuesday during a conference call with securities analysts that the company has already priced about 60% of the company's insured group health coverage for 2026. "Our commercial pricing reflects the elevated cost levels we've seen this year, which we expect to persist in 2026," Noel said. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Premium Increase and Pricing Strategy: UnitedHealthcare has priced about 60% of its insured group health coverage for 2026, reflecting an anticipated 11% increase in premiums. This increase is driven by elevated healthcare costs experienced in the current year, which the company expects to continue into 2026. The pricing strategy aims to balance these rising costs while maintaining coverage offerings to employers.

2. Employer Response to Rising Costs: Employers are increasingly vocal about affordability concerns amid rising healthcare costs and premium increases. In response, many employers are exploring cost-containment strategies such as shifting to self-insured plans, adopting co-pay-only plans, and narrowing provider networks. These approaches are intended to maximize value and control expenses while still providing health benefits to employees.

3. Innovative Plan Features and Services: UnitedHealthcare is seeing growing interest in patient advocacy programs that assist patients with coverage access, billing issues, and negotiating lower rates. Additionally, the company has introduced a "copay-only" plan designed to steer patients toward high-value care providers through copayment incentives. These innovations reflect efforts to improve care quality and cost efficiency in the face of ongoing financial pressures.

Weight loss drugs are bringing down the country's obesity rate, a survey shows

By Yuki Noguchi – The number of people using injectable obesity treatments is increasing rapidly, and it is leading to declines in obesity, according to a new survey by the Gallup National Health and Well-Being Index. The obesity rate dropped to 37% of U.S. adults this year, down from a high of 39.9% three years ago, according to the survey. The survey found that the number of Americans taking drugs like semaglutide (which include the brands Ozempic and Wegovy) or tirzepatide (under the brands Zepbound and Mounjaro) for weight loss more than doubled over the past year and a half. That's 12.4% of respondents taking the drugs compared with 5.8% in February 2024, when Gallup first measured it. Read Full Article...

HVBA Article Summary

1. GLP-1 Drugs Are Influencing Obesity Trends: The increased use of GLP-1 agonist medications, such as Ozempic, Wegovy, Zepbound, and Mounjaro, is associated with a measurable decline in the U.S. adult obesity rate. These drugs work by suppressing hunger and slowing digestion, which helps users manage their weight more effectively. The survey data suggests that pharmaceutical interventions are beginning to shift long-standing obesity trends in the country.

2. Demographic Differences in Drug Use and Impact: The survey highlights that middle-aged adults, particularly those between 50 and 64 years old, are the most likely to use GLP-1 medications, and this group has seen the largest drop in obesity rates. Women are also more likely than men to use these drugs and have experienced greater weight loss as a result. These demographic patterns indicate that the benefits of these medications may not be evenly distributed across all segments of the population.

3. Access and Affordability Remain Significant Barriers: Despite the effectiveness of GLP-1 drugs, access is limited by insurance coverage and high out-of-pocket costs, with some insurers planning to stop coverage in the near future. Without insurance, the monthly cost of these medications can be prohibitive for many individuals. Efforts to develop less expensive pill versions are underway, but for now, financial barriers may prevent widespread adoption and limit the overall public health impact.

Where the opioid epidemic stands amid Medicaid cuts

By Maia Anderson – The opioid epidemic has been a defining public health crisis in the US for the past quarter century. With more than 800,000 people dead from overdoses over nearly 25 years, it’s hard to find an event—outside of the Covid-19 pandemic—that has impacted the US healthcare system more. The economic cost of opioid use disorder and opioid overdoses in the US was estimated to be more than $1 trillion in 2017 alone, according to CDC data. Today, the number of overdose deaths has finally started to decline. But experts warn impending changes to Medicaid could slow that progress. Read Full Article...

HVBA Article Summary

1. Recent Decline in Overdose Deaths: After years of rising fatalities, opioid-involved overdose deaths in the US began to decrease in 2023, with notable drops across synthetic opioids, heroin, and prescription opioids. Experts attribute this trend to a combination of factors, including harm reduction strategies and expanded access to treatment. However, the overall number of deaths remains higher than pre-pandemic levels, indicating the crisis is far from over.

2. Role of Medicaid and Policy Changes: Medicaid has played a crucial role in financing medication-assisted treatment for opioid use disorder, with nearly half of nonelderly adults affected relying on the program. Pandemic-era policies, such as continuous Medicaid coverage and relaxed prescribing rules for treatments like buprenorphine, have improved access to care. Upcoming Medicaid funding cuts and new work requirements could disrupt this progress, potentially leading to coverage gaps and increased overdose risks.

3. Potential Impact of Medicaid Cuts: The recently enacted One Big Beautiful Bill Act reduces Medicaid funding by about $1 trillion over the next decade and imposes work requirements for beneficiaries. These changes are expected to increase the number of uninsured individuals, including those with opioid use disorder, making it harder for them to access continuous treatment. Experts warn that interruptions in treatment significantly raise mortality risk, and the added administrative burdens may further hinder efforts to combat the opioid epidemic.

3 free HSA tools to use during and beyond open enrollment

By Lee Hafner – Educating employees about their offerings can radically improve engagement, and new free resources from Health e-Commerce can help benefit managers maximize the impact of their tax-free health savings accounts (HSAs) and flexible spending accounts (FSAs). The average household spends an estimated $1,600 on HSA- and FSA-eligible health and wellness expenses each year — well below the maximum annual contribution for either account, says Jenna Everhart, Health e-Commerce's VP of human resources. Making sure employees understand how these accounts work is a great way to help them save money and offset the cost of items and services they already use, she explains. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Employee Education Boosts Account Utilization: Providing employees with clear information about HSAs and FSAs can significantly increase participation and engagement. Many employees do not fully utilize these accounts due to a lack of understanding about their benefits and usage. By addressing knowledge gaps, employers can help staff make more informed financial decisions regarding their health expenses.

2. Free Tools Support Year-Round Engagement: Health e-Commerce offers resources such as a monthly calendar, online calculators, and learning centers to help both benefit managers and employees. These tools provide reminders, educational content, and interactive features that can be integrated into regular wellness communications. Utilizing these resources can simplify benefits management and encourage ongoing use beyond open enrollment periods.

3. Personalized and Accessible Learning Options: The HSA and FSA Learning Centers cater to a diverse workforce by offering content in various formats, including short videos and interactive games. This approach ensures that employees of different generations and learning preferences can access and understand important benefits information. Making educational materials widely accessible helps foster financial wellness and supports employees at every stage of their careers.

AI Draws Even With Clinicians for Diabetes Prevention Intervention

By Kristen Monaco – A fully artificial intelligence (AI)-led lifestyle intervention proved just as effective for metabolic improvements as a human-led one, according to a randomized trial. Among 368 adults with prediabetes and overweight or obesity, 31.7% of those referred to an AI intervention based on the Diabetes Prevention Program (DPP) achieved the composite primary endpoint compared with 31.9% of those referred to the traditional human-coached DPP intervention, meeting criterion for noninferiority, reported Nestoras Mathioudakis, MD, MHS, of Johns Hopkins University School of Medicine in Baltimore, and colleagues. Read Full Article...

HVBA Article Summary

1. Effectiveness of AI-led Intervention: The AI-led Diabetes Prevention Program (DPP) intervention was found to be non-inferior to the traditional human-coached program in achieving metabolic improvements such as weight loss and glucose control. Both interventions resulted in similar percentages of participants meeting the composite primary endpoint, indicating comparable effectiveness in diabetes prevention among adults with prediabetes and overweight or obesity.

2. Higher Adoption and Completion Rates with AI: Participants referred to the AI-led DPP showed significantly higher rates of program initiation (93.4% vs 82.7%) and study completion (63.9% vs 50.3%) compared to those in the human-led program. The asynchronous, mobile delivery format of the AI intervention likely contributed to greater accessibility and convenience, overcoming barriers associated with traditional human coaching models.

3. Potential for Scalable, Low-Cost Diabetes Prevention: The AI-based intervention offers a scalable and potentially low-cost solution to address the limited availability and low retention rates that restrict the population health impact of traditional DPPs. Given that only an estimated 3% of U.S. adults with prediabetes currently participate in DPPs, the AI approach may expand reach and engagement, helping more individuals receive structured lifestyle interventions to prevent diabetes.

Healthcare’s new AI receptionist has arrived

By Caroline Catherman – When you call up a company’s customer service line and are greeted by an off-kilter automated voice, how does that usually go? Personally, the call often ends with us yelling “Connect me to a person!” at a robot that just keeps asking the same questions over and over again. If you relate, we have good news: That might soon be an interaction of the past. AI agents promise to flip that script by offering live assistants that remember and build off past queries to personalize and improve service. These agents can be online or even take on human-sounding voices to provide guidance over calls—and unlike chatbots, they can act autonomously without being prompted. Read Full Article...

HVBA Article Summary

1. Adoption of AI Agents in Healthcare: Healthcare organizations like California’s Sutter Health are beginning to implement AI agents to improve patient communications. These AI receptionists can handle tasks such as authenticating identities, confirming appointments, and providing directions, with plans to expand to scheduling and rescheduling appointments. The integration process is gradual, involving vendor selection and system integration, with patient opt-out options and human staff handling complex cases.

2. Advantages Over Traditional Systems: AI agents offer a more natural and open-ended conversational experience compared to traditional interactive voice response systems, which often frustrate users. These agents can remember past interactions and personalize responses, acting autonomously without needing constant prompts. This technology aims to free clinicians from administrative tasks, allowing them to focus more on patient care.

3. Security and Privacy Considerations: Despite their benefits, AI agents raise concerns about potential cyberattacks, such as hackers attempting to extract private patient information. Developers address these risks by implementing strict guardrails, ensuring the AI agents operate within defined boundaries to protect sensitive data. This approach, described as “AI on a leash,” aims to balance functionality with security in healthcare settings.