SIIA Government Relations Update

By SIIA – Each year, Congress returns from their August recess the day after Labor Day, and each year, Congressional Leaders start turning up the volume on whether or not their respective political party should refuse to negotiate with the other political party to fund the government for the following Fiscal Year (which starts Oct. 1st of each year). That’s why we call it a “Shutdown-Showdown.” Currently, Congressional Democrats are saying that they won’t agree to funding the government unless Congressional Republicans and President Trump repeal certain aspects of the recently enacted “One Big Beautiful Bill” (the main focus is on the OBBB’s changes to Medicaid). Read Full Article...

HVBA Article Summary

1. Government Shutdown Strategy and Political Dynamics: Both political parties are using the threat of a government shutdown as a strategic tool. While Democrats are under pressure from their base to stand firm on demands, especially on issues like health care subsidies, Democratic leadership appears more inclined to avoid a shutdown. Meanwhile, Republicans—particularly the White House—seem willing to let a shutdown occur, hoping to shift blame to Democrats and force decisions that President Trump can control unilaterally during the shutdown period.

2. ACA Enhanced Subsidies as a Central Policy Debate: One of the primary policy disputes revolves around the future of the Affordable Care Act’s “enhanced premium subsidies,” which are set to expire at the end of 2025. Three options are being debated: extend as is, modify with bipartisan compromises, or let them expire. Republicans largely oppose a clean extension, but allowing them to expire could cause significant coverage losses, making a negotiated extension (Option #2) increasingly likely as elections approach.

3. Health Policy and Regulatory Developments Gaining Momentum: Multiple health policy issues are advancing, including concerns over abuse in the Federal IDR (Independent Dispute Resolution) process related to surprise medical billing. The article also highlights upcoming regulations on transparency in health insurance pricing, and compensation disclosure requirements for PBMs (Pharmacy Benefit Managers) and TPAs (Third Party Administrators). These regulatory actions aim to strengthen compliance, protect consumers, and address market inefficiencies.

Let the rulemaking begin: Why direct-to-consumer drug ads deserve a closer look

By Ed Silverman – Call it death by disclosure. After nearly 30 years in which prescription drug ads have become a fixture on television, the Trump administration is attempting a crafty maneuver to largely rid the airwaves of these promotions. To what extent the gambit will work is uncertain. But the effort revives an important debate that I think is worth having. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Shift in FDA Regulation Enabled TV Drug Advertising Boom: In 1997, after lobbying from pharmaceutical companies, the FDA changed its policy to allow drug ads on television to include only a brief “major statement” of notable risks and direct viewers elsewhere for full information — a concept known as “adequate provision.” This regulatory shift marked a turning point, enabling a dramatic rise in direct-to-consumer advertising and allowing companies to use the broad reach of TV to drive sales, with studies showing high returns for every dollar spent on such advertising.

2. Concerns Over Consumer Impact and Incomplete Risk Disclosure: The growth of these ads sparked enduring criticism from doctors, regulators, and advocacy groups who argued that the ads often glamorized medications, downplayed side effects, and pressured doctors by encouraging patient demand for high-cost drugs that may not be necessary. High-profile cases like Merck’s Vioxx scandal highlighted how serious side effects could be underplayed, fueling calls — including one from the American Medical Association in 2015 — for stricter regulation or even an outright ban on such ads.

3. Proposed Regulatory Overhaul Aims to Limit Broadcast Ads Without Banning Them: Health and Human Services Secretary Robert F. Kennedy Jr. is now pushing to end the “adequate provision” policy entirely, requiring full risk disclosures to be included within the ads themselves. This could make drug commercials longer, more expensive, and less appealing to air — a move that may reduce their frequency without triggering First Amendment legal battles over banning them outright. While the FDA plans tougher enforcement on misleading ads, challenges remain due to limited agency resources, and drugmakers are expected to shift focus to platforms like social media and disease-awareness campaigns to maintain promotional reach.

House Throws Wrench in Plan to Test Prior Auth in Traditional Medicare

By Shannon Firth – The House Appropriations Committee on Tuesday took aim at defunding a plan that could potentially expand prior authorization in Medicare. Enough Republicans in the committee joined Democrats in passing an amendment to an HHS funding bill that would block CMS from implementing its recently announced prior authorization pilot program in traditional Medicare. The goal of the plan is to target services including skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for osteoarthritis. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Budget Cuts and Program Eliminations in FY2026 HHS Bill: The proposed FY2026 budget for the Department of Health and Human Services (HHS) totals $108.6 billion — a 6% reduction from FY2025. It includes significant funding cuts across several agencies such as the CDC, NIH, and CMS. Additionally, the bill eliminates funding for domestic/global HIV/AIDS programs, Title X family planning, the Teen Pregnancy Prevention Program, the CDC’s Office on Smoking and Health, and gun violence prevention research.

2. Partisan Disagreement Over Health Policy Direction: The legislation has sparked sharp criticism from Democrats, who argue it undermines public health by removing essential services and embracing ideological provisions. They raised concerns about threats to vaccine access, maternal health, and science integrity. Republicans, on the other hand, defend the bill as a measure of fiscal responsibility that preserves investment in biomedical research and rural healthcare while enforcing conservative policy priorities (e.g., ending Planned Parenthood funding, preserving the Hyde Amendment, and barring funds for gender-affirming research in animals).

3. Vaccine Policy and Future Access Concerns: Although the bill calls for $1 billion to support the Biomedical Advanced Research and Development Authority — potentially benefiting mRNA vaccine research — there is no specific allocation for vaccines. Lawmakers voiced concerns that recent changes in CDC leadership and FDA recommendations could lead to the removal of COVID-19 vaccines from the child immunization schedule, potentially resulting in out-of-pocket costs for families. Proposed amendments aimed at protecting vaccine access and restoring HIV/AIDS funding failed to pass.

Employer health costs to top $17,000 per employee in 2026

By Alan Goforth – Employers can expect to pay an average of $17,000 per employee for health care costs next year. Aon, a global professional services firm, projects a 9.5% increase in 2026, marking the third consecutive year with price hikes approaching double digits. “We are seeing medical cost inflation levels at their highest in years,” said Farheen Dam, the company’s head of health solutions for North America. “But the overlooked reality is that employers continue to act as a stabilizing force. They absorb the bulk of the increase while making smart, targeted adjustments that protect employees and preserve plan value.” Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Chronic Conditions and Drug Costs Are Major Drivers of Medical Inflation: Health care costs in the U.S. continue to rise, largely due to the growing incidence of chronic conditions such as musculoskeletal and cardiovascular diseases, as well as a surge in high-cost diagnoses like cancer. Simultaneously, increased utilization of brand-name and specialty drugs—particularly GLP-1 therapies used for treating diabetes, obesity, and related chronic conditions—is placing additional pressure on overall medical spending.

2. Employers Bear the Brunt but Face Trade-offs: Employers are absorbing the bulk of rising health care expenses through strategies like adjusting benefit plan designs, increasing employee payroll contributions, and implementing targeted chronic condition management programs. However, the sustained pressure from medical inflation is forcing many organizations to make difficult trade-offs, limiting their ability to invest in broader workforce initiatives such as compensation growth, career development, and overall employee wellbeing.

3. Industry-Specific Cost Variations and Strategic Shifts: The impact of rising health care costs varies across industries. For instance, employers in the technology and communications sector are experiencing the highest average cost increases at 8.8%, while finance and insurance employees are facing the steepest hike in their personal cost burden at 6.8%. In response to these challenges and continued economic uncertainty, many employers are turning to data-driven insights and predictive analytics to better understand workforce health trends and plan more effectively for future medical expenses.

The forces driving 2026 health insurance price hike forecasts

By Elizabeth Casolo – Consulting groups and organizations are issuing their predictions for healthcare costs in 2026. And so far, they appear steep.Here is a roundup of what these groups are saying: Read Full Article...

HVBA Article Summary

1. Sharp Increases in Employer Healthcare Costs Forecasted for 2026: Several major industry surveys anticipate the steepest rise in employer-sponsored health plan costs in over a decade. Mercer projects a 6.5% increase in total health benefit costs per employee in 2026—the highest jump in 15 years. Employers in the Mercer survey initially estimated a 9% increase before implementing cost-reduction strategies. Aon forecasts a 9.5% rise, pushing the average cost per employee above $17,000. Willis Towers Watson (WTW) estimates a 9.2% increase, the fastest rate since at least 2011. The International Foundation of Employee Benefit Plans (IFEBP) predicts the highest increase at 10%.

2. Key Drivers: Chronic Conditions, Drug Costs, and Higher Utilization: Across all surveys, employers cited similar reasons for the surge: a growing burden from chronic and high-cost conditions, more frequent utilization of healthcare services, and escalating prescription drug expenses. Particular concern was raised about the rising costs of GLP-1 drugs (used for diabetes and weight loss), catastrophic claims, and increased provider costs. These factors collectively contribute to the projected 9–10% cost growth estimates from several sources.

3. Employers Likely to Shift Costs to Employees, Though Alternatives Exist: According to Mercer, most employers plan to manage these cost increases through consumer-directed strategies such as raising deductibles and expanding cost-sharing provisions. One Mercer survey found that over half of employers intend to pass some of the rising costs to employees. However, another Mercer survey indicated a growing interest in longer-term approaches aimed at managing costs more sustainably—without relying solely on shifting financial responsibility to workers.

You made a mistake with your employees' benefits. Now what?

By Paola Peralta – Everyone is entitled to make a mistake, including HR and benefit leaders. But what happens after is the important part. HR and benefit teams spend around 40% of their time on benefits administration, according to research from employee benefits solutions platform Amplify. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Prevalence and Financial/Liability Risk: The article reports that 73% of companies have at least one major benefits compliance error annually, which can cost organizations thousands of dollars. Regulatory requirements from the IRS and the Department of Labor mean affected employees must be returned to the financial position they would have been in absent the error, increasing remediation costs. Large affected populations can make those corrective costs increase exponentially.

2. Communication and Accountability Matter: Sources in the piece say many operational errors stem from insufficient communication rather than complexity alone, and admitting mistakes promptly can help rebuild trust. A Dale Carnegie Training survey cited in the article found 81% of employees say it is important for a leader to admit they were wrong, though fewer believe supervisors actually will. The author and quoted experts advise flagging errors early, communicating what happened, and explaining fixes and prevention steps to affected employees.

3. Prevention Requires Processes and Employee Engagement: The article highlights concrete prevention steps such as following plan documents, establishing cross-department checks and balances, and keeping employees educated about their plans. It notes common failures include missed enrollments, misrepresented coverage and payroll mistakes (with 44% of employees reporting they discovered a payroll mistake at some point). Engaged employees who understand plan administration can act as an additional safeguard against operational failures.

Just 1% of employees drive nearly a third of all health care spending

By Kristen Smithberg – Individuals with significant chronic and comorbid conditions drive a disproportionate percentage of the health care dollars spent by employers on workplace-based health care benefits. High-cost claimants account for about 20% of participants but about 80% of spending, according to an EBRI fact sheet. Read Full Article... ^{_{(Subscription required)}}

HVBA Article Summary

1. Employer Strategies Have Not Curbed Rising Health Care Costs: Over the past four decades, employers have continuously sought to manage the growing financial burden of providing health benefits by modifying plan designs, increasing cost-sharing with employees, and exploring innovative health care delivery models. However, these efforts have largely failed to contain expenses, as health benefit costs have consistently risen faster than the rate of inflation, making it an ongoing challenge for employers.

2. High Health Care Costs Are Driven by a Small Minority of Users: A disproportionate share of health care spending comes from a very small segment of the insured population. Specifically, just 1% of enrollees account for 29% of spending, 5% account for 57%, and 10% account for 71% of total costs. While the “80/20 rule” suggests that 20% of users generate 80% of spending, EBRI’s analysis reveals greater nuance—median spending within that group is far lower than the average, indicating that not all high spenders are heavy users, and suggesting the need for more refined classifications of high-cost claimants.

3. Chronic Conditions Are the Primary Cost Driver in Employer Plans: Chronic health conditions significantly influence overall health care spending in employment-based plans. Approximately 61% of enrollees have at least one chronic condition, and this group accounts for 92% of total expenditures. Common chronic issues include respiratory diseases, cardiovascular problems, musculoskeletal and skin disorders, mental health conditions, and diabetes. Additionally, a smaller subset—about 4%—deals with more complex and costly conditions such as liver disease, AIDS, or dementia, further amplifying the concentration of spending among a limited number of individuals.