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The temporary Medicaid shutdown
To put it mildly, last Tuesday was a “stressful day” for state Medicaid staff across the country, a former Medicaid director told me.
One day after the Trump administration released a memo saying it would freeze all “federal financial assistance,” Medicaid agencies were temporarily locked out of their U.S. Treasury accounts.
Then, the Trump administration quickly reversed course and said, well shucks, Medicaid is exempt from that order, duh.
The episode highlighted the precarious position of Medicaid programs, which often draw the ire of Republicans. The original memo explicitly exempted Medicare and Social Security from the funding freeze, but not Medicaid — an interesting exclusion.
The confusion forced the Trump administration to clarify. But with an aggressive agenda to extend tax cuts for the wealthy, Medicaid likely will continue to be a target for Republicans in Congress and the White House.
We want to hear more: Are you a current or former employee within a state Medicaid agency or the Centers for Medicare and Medicaid Services? Are you a current or former worker for a state governor’s office? We’d love to hear more about how the memo affected your Medicaid program or state capital: [email protected].
UnitedHealthcare likely to cover Vertex’s pain drug
Vertex Pharmaceuticals received FDA approval for a new non-opioid pain drug, marketed as Journavx, and it appears the nation’s largest health insurer, UnitedHealthcare, will cover it, my colleague Jonathan Wosen reports.
This is important because there’s a clear need to find non-addictive alternatives to opioid painkillers. But a big lingering question is…how well does Journavx really work? Late-stage trials showed the drug was safe and provided some modest pain relief, but it didn’t outperform a combination of acetaminophen (aka, Tylenol) and the opioid hydrocodone.
UnitedHealthcare may put Journavx on a non-preferred tier on its list of approved drugs, resulting in most insured people paying 20% coinsurance. Vertex priced Journavx at $31 per day.
“There’s almost no not covering these drugs, due to the pressures we’re getting,” a UnitedHealth Group executive told a financial analyst on Jan. 23. “It’s a matter of how, for whom, and at what price?” Read more from Jonathan.
$7.1 billion
Peak U.S. sales of Humira, made by pharmaceutical giant AbbVie, were $18.6 billion in 2022. Then, in 2023, cheaper versions of the blockbuster rheumatoid arthritis treatment finally came to the U.S. even though they had been sold in Europe since 2018.
Those biosimilars pushed down U.S. sales of Humira in 2023, but sales still amounted to a whopping $12.2 billion. Pharmacy benefit managers were afraid not to cover the highly used brand-name drug — both because they didn’t want to lose the rebates that AbbVie was giving them, and they didn’t want to annoy their employer clients.
In 2024, PBMs finally started to drop Humira (often in favor of their own private-labeled version). And we now know that shaved U.S. Humira sales down to … $7.1 billion. That means Humira still would have been a Fortune 500 company on its own last year.
It’s time to risk adjust you
“Consider us a friend,” says James Yeash, a family medicine doctor at New West Physicians, which is a physician group that UnitedHealth’s Optum bought in 2017.
Yeash appears on a local Colorado TV ad that could easily be confused for a regular news segment. And since it’s the start of a new year, he’s hoping viewers — many of whom are likely older than 65 — mosey in for their annual wellness visit.
Why would UnitedHealth want patients to come in for annual wellness visits? Because Medicare Advantage plans, like those owned by UnitedHealth, use the check-ins as a way to collect people’s health problems and convert them into lucrative billing codes. It’s all part of the multibillion-dollar coding structure that undergirds Medicare Advantage, and UnitedHealth has even incentivized its Optum physicians to promote these annual wellness visits. None of this was disclosed in the ad.
The ‘HMO czar’ speaks
Daniel Zingale was the founding director of California’s Department of Managed Health Care — or, as he was known, the nation’s first “HMO czar.” And he writes in a STAT op-ed that people’s rage against the health care system has existed for decades — and requires a “more profound regulatory overhaul that takes on any entity that puts profits before people’s health.”
Zingale aggressively regulated health insurers that denied and delayed care. He mentions the case of Margaret Utterbach, which I had never heard of before: Utterbach died in 1996 after her HMO, Kaiser Permanente, delayed treatment for an aortic abdominal aneurysm. “We didn’t go far enough,” he writes. Read more.
Industry odds and ends
- Are you going to watch the Super Bowl this weekend? Hims & Hers is spending millions on an ad for its compounded weight loss medications, and it raised a whole bunch of red flags that my colleague Katie Palmer explains.
- Cigna’s earnings report last week highlights how American workers are getting crushed with serious illnesses right now — and the workforce can expect to pick up a big tab after Cigna and others raise prices to make up for miscalculating how much care people needed.
- The health policy shop KFF dug into the latest insurance denials data for both Medicare Advantage plans and Affordable Care Act plans. One takeaway: People still rarely appeal denied claims, but when they do, they often win.
- Bain Capital already owns almost 40% of outpatient surgery center chain Surgery Partners, and it now wants to buy the rest of the company for $25.75 per share in cash. This would value Surgery Partners at a little more than $3 billion. Wall Street analysts think the non-binding offer is too low. “Bain’s offer should rekindle interest among potential financial and strategic buyers,” RBC Capital Markets analyst Ben Hendrix wrote to investors last week.
- Uber is suing a bunch of pain doctors and clinics, alleging they worked with lawyers to fabricate car crash injuries and perform unnecessary procedures as a way to milk Uber’s auto insurance, Laura Nahmias and Natalie Lung of Bloomberg report.
The Meme Ward
