Congress Wants to Crack Open Health Care’s Black Box. One Sentence Could Keep It Shut.

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Congress wants employers and unions to finally see where their health care dollars go. A last-minute change could let insurers and PBMs keep some of the most important receipts hidden.

For years, employers and other plan sponsors, such as unions, have been fighting to get the one thing they need to better control their own health care spending: the claims data their insurers/third-party administrators and pharmacy benefit managers generate on their behalf but routinely refuse to hand over. A bill working its way through Congress – the Patients Deserve Price Tags Act (PDPTA) – would finally force that data into the open. The bill is also a real test case for a simple idea: that transparency itself can help drive down unnecessary spending, lower overall health care costs, benefit patients, and strip middlemen of the leverage they use to pocket money they were never entitled to.

The fiscal case backs this up. A recent independent analysis by economists Daniel Arnold and Christopher Whaley estimates the bill would generate roughly $122 billion in additional federal revenue over 2026–2035, with a plausible range of $25 billion to $270 billion, by driving down employer plan spending in ways that eventually show up as higher taxable wages. That’s the standard logic the Congressional Budget Office uses for scoring changes in employer-sponsored insurance. Even at the low end of that wide range, it’s a meaningful number.

The usefulness of the bill, however, would be significantly undermined by a single sentence, added to Section 7 just before it was voted out of the Senate Health, Education, Labor and Pensions (HELP) Committee, that could gut the very accountability mechanism the bill is built around.

First, because this is an area where there is a lot of confusion, here’s some information and context. A plan sponsor, as noted above, is typically an employer or union that offers subsidized health benefits to workers and their families. In that role, the employers and unions are the actual “insurers.” They hire companies we typically call insurers (like Cigna, Aetna, UnitedHealthcare or a Blue Cross plan) to administer those health benefits. In that role, those companies are third-party administrators (TPAs) who use the employers’ and unions’ – and workers’ – money to pay claims, create provider networks, serve as gatekeepers to care and handle other administrative responsibilities, like approving and denying coverage for care (called utilization management or prior authorization). Employers and unions pay those TPAs huge fees to do that work.

So huge, in fact, that at Cigna, where I used to work, approximately 80% or more of revenues from the company’s U.S. commercial health insurance operations came from administrative-services-only arrangements. Even though workers have insurance cards in their wallets with the logo of a company like Cigna or Aetna, which we think of as an insurer, the workers’ employer or union is, in fact, the insurer.

Section 7 of the bill gives employer and union health plans the right to access their own complete claims data — from the insurers, third-party administrators (TPAs), and pharmacy benefit managers (PBMs) that plan sponsors hire to handle those administrative duties, and the plan sponsors give the TPAs access to the money in the bank accounts the plan sponsors set up to cover the cost of their workers’ health care benefits. Those TPAs and PBMs (which are typically owned by the TPAs) are the middlemen that are involved in every dollar a plan sponsor spends. They set network prices, retain rebates from pharmaceutical companies (kickbacks, in plainer, more precise language) and generally control the only detailed record of where a plan sponsor’s money actually went. When employers and unions can’t see that record – and in today’s world they usually do not, even though we’re talking about their own money – they can’t audit it, and audits are the only way plan sponsors ever catch things like phantom billing, upcoding, duplicate charges or the disparities in denials and prior-authorization patterns that Congress has spent years scrutinizing.

Section 7’s whole purpose is to let the people paying the bills finally be able to trace where their money goes.

The new language in the Senate bill just before it was voted out of the HELP Committee says that, “A covered service provider would not have to disclose data that could ‘reasonably identify’ a participant or beneficiary, as defined under HIPAA’s individually identifiable health information standard.”

On its face, that sounds like ordinary patient-privacy boilerplate, but it is much more than that. HIPAA already has a detailed, well-established process for exactly this situation — dealing with a health plan’s right to receive identifiable claims data for plan administration. That process encompasses two well-defined de-identification methods – the 18-identifier “Safe Harbor” standard, and “expert determination” – for when identifiability genuinely needs to be limited.

The newly inserted language doesn’t invoke either of those. To the delight of my former employers in the health insurance business, it creates a new, undefined standard — “could reasonably identify” — with no cross-reference to how HIPAA actually determines that, and no appeals process if a plan sponsor disagrees. And it hands the decision to the very parties Section 7 exists to hold accountable. If that language stays in the bill, the insurer, TPA, or PBM would get to decide, on its own, what counts as identifiable enough to withhold from plan sponsors. Keep in mind that the TPAs and PBMs, which are constantly trying to maximize their revenues, by their very nature have access to identifiable data on every insured American.

De-identification of that data before it is shared with plan sponsors doesn’t just strip names and Social Security numbers. Done under a vague, self-certified standard, it can also strip exact service dates, zip codes, and the member-level identifiers that let an employer or union sponsored health plan connect one claim to another. Those are precisely the fields that let a plan sponsor piece together a pattern.

Here’s a hypothetical example of how PDPTA would enable employers to get a better handle on how their TPAs/PBMs are using their money to pay claims – and how the inserted language would stymie their ability to do so:

Suppose an employer plan noticed it had been billed for six services in a single week for one patient from one provider. Because it could see the clustered service dates, the plan could investigate, discover the services had never been performed, report the provider for false billing, and recover the money. But strip out exact dates — which the new language would allow — and that same claim would just look like six services spread out over time. The fraud would likely go uncaught, and the health plan (which means, ultimately, workers’ wages and other compensation) would eat the loss.

The same missing fields also hide denial-rate disparities and turnaround-time patterns — the exact behavior lawmakers keep asking about in prior-authorization hearings. And they would block plan sponsors from recovering overcharges they can no longer prove occurred.

Here’s something else to keep in mind: PBMs and insurers already sell claims-level data to drug manufacturers, data brokers, and analytics firms for their own commercial gain. The inserted language would let them keep doing that while blocking the employer or union that actually paid for the data from ever seeing it themselves.

Some of the lawmakers who care most about getting this right have raised a concern that deserves to be taken seriously, hence the newly added language. They don’t want employers gaining routine access to their own employees’ identifiable medical records. That’s not a paranoid fear. An employer that can see an employee receiving mental health treatment, fertility care or substance-use treatment has information that, mishandled, could influence a promotion, a layoff list or a manager’s private judgment about someone, even where no law technically permits that use.

That concern is exactly why HIPAA built a specific structure for it, back when Congress first grappled with this same problem in the 1990s. Think of it as a locked door inside an employer’s own building. When a company sponsors a health plan for its workers, HIPAA doesn’t let that identifiable medical data just flow into the regular HR filing system where a manager could stumble across it. Instead, the law requires the employer to designate a small, specific group of people – usually benefits staff, auditors or a third party working on the plan’s behalf – who are allowed through that locked door to see identifiable claims data, but only to do plan-administration work like trying to ensure that claims are paid correctly by TPAs and PBMs and checking for fraud. Everyone else at the company – HR generalists, supervisors, anyone who could use the information in a hiring, firing or promotion decision – stays on the other side of the door. The employer has to sign a formal certification promising to keep that separation in place, and using the data for an employment decision is exactly the kind of violation HIPAA’s firewall exists to catch. And violating HIPAA can be very costly: fines of $50-$250,000 per offense and up to 10 years in jail. That is a very real disincentive to mishandle the data.

That’s the tool already built for the harm some lawmakers say they have concerns about. It doesn’t block identifiable data from ever reaching the plan; it controls who inside the plan gets to see it and what they’re allowed to do with it.

The Section 7 carve-out language inserted in the bill doesn’t touch that door at all. It does something completely different: It lets the TPA, PBM or insurer decide, on its own, that a given piece of data simply won’t go through the door in the first place – not to the walled-off auditors – not to anyone – no matter how carefully separated they are from HR. That’s not tightening the firewall that some lawmakers are worried about breaching. It’s blocking the room entirely, including the auditors it was built to let in.

Here’s what should trouble anyone who takes the privacy concern seriously: The same companies that would get to make that call are, separately, in the business of selling similar claims data to outside parties, including data brokers, drug manufacturers and marketing analytics firms, under HIPAA’s “de-identified” label. Privacy researchers have spent years documenting how easily that kind of de-identified data can be re-identified, especially once it’s cross-matched against other data sets a broker already holds. In other words, the industry treats “identifiable enough to protect from a plan’s own fiduciary auditors” as an easy bar to clear, while treating “de-identified enough to sell for profit” as an even easier one. That’s not privacy protection with a consistent standard. That’s a standard that moves depending on who’s asking and who profits.

If the goal is protecting employees from having their sensitive health information misused – and it should be – the fix is to reinforce the locked-door system Congress already built: stronger certification requirements, even more severe penalties if an employer ever uses plan data in an employment decision, and access limited strictly to the walled-off audit function. That protects workers without stripping Section 7 of its ability to catch fraud. A vague, vendor-administered “reasonably identify” standard doesn’t strengthen that door. It just lets the vendor decide who never gets a key.

The good news is that PDPTA is moving through Congress. On the Senate side, the HELP Committee approved it on a bipartisan basis in late July. The lead sponsors – Roger Marshall (R-Kansas) and John Hickenlooper (D-Colorado) – were joined by Senators Chuck Grassley and Joni Ernst of Iowa and Cynthia Lummis of Wyoming, all Republicans, and Democrats Tammy Baldwin of Wisconsin, Cory Booker of New Jersey, Elizabeth Warren of Massachusetts and John Fetterman of Pennsylvania. That’s the kind of bipartisan coalition that rarely comes together on health care and even more rarely survives a full committee markup intact.

House versions of the Senate bill also have strong bipartisan support and are working their way through three committees (Energy and Commerce, Education and Workforce, and Ways and Means) — reflecting how many parts of federal law it touches.

With a bill this far along, this close to bipartisan agreement, and this close to the end of the current Congress, the pressure to move fast is real. That’s exactly why the Section 7 carve-out needs fixing now, while it’s still open for amendment, rather than after passage when it would take an entirely new bill to undo it. That clearly is not the intention of the bill’s many sponsors.

The transparency goal of the bill is sound, the projected fiscal upside is real even under conservative assumptions, and Section 7’s data-access right is exactly the kind of tool plan sponsors need.

Companies like the ones I used to work for undoubtedly were happy to see the new language inserted in the bill, and I’m hearing evidence that they’re working behind the scenes to keep it in the bill by creating the false narrative that employers and unions want this data primarily to learn more about their workers’ health. That simply doesn’t hold up. For one thing, as I’ve explained, HIPAA is clear on how employers can use the data and what happens if they violate existing law. But it is important to keep in mind that federal law also now makes it abundantly clear that plan sponsors are fiduciaries of workers’ money. They can be sued – and some are being sued – for not fulfilling their fiduciary responsibility under the law. And plan sponsors need data they all too often cannot get from their TPAs and PBMs to meet the law’s requirements.

I’ve written before about how often plan sponsors that sue their own TPAs and PBMs to get the data they need in order to have any assurance that they are not being double billed or defrauded in other ways get bogged down for the simple reason that they can’t get at their own claims data in a form they can actually audit. Section 7, done right, is a legislative fix for that problem. But “done right” requires closing this loophole before the bill moves further. At minimum, that means:

  • Cross-referencing HIPAA’s existing Safe Harbor or expert-determination standards instead of inventing a new, undefined one;
  • Requiring the covered entity to justify any withheld field against that established standard, rather than self-certifying; and
  • Giving plans a way to challenge a withholding decision, instead of leaving the provider as sole judge.

One sentence, fixed, would let PDPTA keep its promise. Left as recently changed, it lets the middlemen write themselves an exemption from the very oversight the bill is meant to create.

The Health Care Scare Is Back

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As voters sour on private insurers and health care reform gains political momentum, decades-old warnings about “choice,” “wait times” and “slippery slopes” are resurfacing.

If you want a sense of where the health care debate is headed as we enter the final stretch before the midterm elections, take a look at what has been published over just the past week.

Last Wednesday, the New York Post published an op-ed by Pacific Research Institute President Sally Pipes warning that Medicare for All would be a “real-life nightmare.” That same day, another Pipes column, this one in Newsmax, warned that a public option would be the first step toward a “complete government takeover of health insurance.” And also last Wednesday, Reason published a piece warning that universal health care means “long waits, rationed care, and unmet medical needs.”

These old tropes are familiar to me, as I am sure they are to many readers. And there is a reason they are back getting airtime.

Health care costs have become a major vulnerability for politicians heading into November. A KFF poll this summer found that 51% of voters considered health care costs an “extremely important” issue for candidates to address. Earlier KFF polling found that 61% said health care costs would have a major impact on which party’s candidates they support. And it is Americans’ sentiments about health care costs that have pushed many Medicare for All candidates over the finish line and lit a fire under current members of Congress who are now seeking a way to increase competition in the health insurance space by creating a nonprofit health plan that would be operated by the federal government.

Americans are increasingly fed up with private health insurers. Complaints about denied care, prior authorization, rising premiums and exorbitant out-of-pocket requirements have put insurers under a level of scrutiny I haven’t seen in years. It’s not just Abdul El Sayed. It’s Marjorie Taylor Green, too.

And it’s because of this political storm brewing that the health insurance industry’s longtime defenders are coming out swinging.

I know Sally Pipes’ work especially well. Pipes, who grew up in Canada but has lived in the U.S. for years, has spent decades warning Americans about reforms that might move the United States closer to a system like our neighbors to the north have. When I was an insurance executive, she was always useful to us.

During the industry’s campaign against Michael Moore’s Sicko, for example, we drew on Pipes’ work to portray Canada’s health care system as a cautionary tale. I wrote about that in the Washington Post. And during the debate over what became the Affordable Care Act, she was a forceful critic of the public insurance option insurers desperately wanted to keep out of the final bill.

She was a reliable ally of the health insurance industry then, and she clearly is returning to that role once again.

In her New York Post column last week, Pipes reaches for one of the oldest and most effective arguments against health care reform: “choice.” Pipes says that (currently) employers can switch insurance companies, people buying their own coverage can shop among plans and Medicare beneficiaries can choose between traditional Medicare and privately run Medicare Advantage plans. Medicare for All, she warns, would take that “choice” away.

It’s an argument that has worked before because “choice” sounds pretty good. Who wants fewer “choices” when it comes to their health care? (That’s a rhetorical question. But one answer is the insurance industry, which has been eliminating “choice” and competition for decades now.)

The trick is that much of the “choice” Pipes is talking about is an illusion. Americans with employer-sponsored coverage most certainly do not get to choose their insurance company. Their employer does. And even if you can choose among a handful of health plans at work, all of them at most U.S. businesses that can still afford to offer coverage are operated by the insurance company your employer chose. That’s not the same as being able to choose your doctors or hospitals, which is the “choice” Americans really want. Your health insurer decides which doctors and hospitals are in your network and can require prior authorization before it will pay for care your doctor recommends.

In other words, Americans may have (some) “choice” of plans – with varying levels of deductibles and copayments – but that doesn’t necessarily mean they have a meaningful “choice” when it comes to their health care.

Pipes’ second column last week reveals something else about the “choice” argument. She warns in Newsmax that a public option would have advantages private insurers couldn’t match, eventually drive them from the market and put the country on a “slippery slope” toward single-payer health care. (I can’t tell you how many times I warned about that so-called “slippery slope” when I ran communications at Cigna.) So Pipes essentially is arguing that private insurers must continue to be protected from additional competition in the name of giving Americans “choices.” But give Americans the “choice” of a public plan—and the possibility that millions might prefer it to what private insurers are selling—and suddenly “choice” itself becomes the problem. She ignores the fact that seniors have long been able to choose a public option – traditional Medicare – or one operated by a private insurer – Medicare Advantage. I can assure you that Medicare Advantage is extraordinarily profitable for private insurers. No one should worry that insurance companies won’t continue to make money if people younger than 65 can also at long last be able to choose a public option.

Reason, the libertarian magazine that has been a persistent critic of the Affordable Care Act, Medicare for All and any concept that would allow the government to pass legislation that would interfere with insurance companies’ business practices, published its own warning last week under the headline: “Universal Healthcare Sounds Great. Here’s What’s Happening in Countries That Have It.”

The piece focuses heavily on Canada and Britain, arguing that people in those countries face long waits for care in overcrowded hospitals, and it cites examples of patients who received inadequate care. Those problems are real and shouldn’t be dismissed. Neither Canada nor Britain has a perfect health care system. But the United States sure as hell doesn’t either. Millions of Americans never get the care they need because they can’t afford to buy health insurance. Millions more with insurance can’t use it because of unaffordable out-of-pockets costs and have no “choice” but to go without the care they need.

Reason leans heavily on one of the most familiar scare tactics used against universal health care: the wait times. In Canada, you might wait a few months for an elective procedure like a knee replacement, and in the U.K. see a specialist or get a procedure. In Britain, you might find yourself in an NHS queue. But in either country, unlike in the U.S., you will not have to wait long at all to see your primary care doctor or be admitted to a hospital for medically urgent care.

To be sure, waiting for an elective procedure or imaging annoys many Canadians and Brits. They are real problems. But in this country, we ration care in a way that creates far more harm than waiting in a queue for a few weeks or months for non-urgent care. In the United States, if you can’t afford care, you don’t wait a few months or get thrown on a waiting list – you all too often never get the care. Because in the U.S. of A, if you’re one of the nearly 30 million Americans who are uninsured, or who can’t cover their deductibles, you don’t get it until you get so sick you have to go to the ER. And then you get saddled with hundreds or thousands of dollars in medical debt.

So comparatively, Americans put off the procedures, scans and medications they need. Americans live with pain and hope whatever is wrong doesn’t get worse. In the worst cases, folks in this country die prematurely with conditions that could have been treated because they couldn’t afford to get the care that could have saved their lives.

Reason has been making versions of this argument for years. The magazine has previously published pieces with headlines including “Medicare for All Is Bad Medicine,” “Why Bernie Sanders’ Medicare for All Is a Bad Idea,” and “Medicare for All Would Actually Be a Government Takeover of Health Care.” (“Government takeover” ranked right up there with “slippery slope” when I was an insurance industry propagandist. Get ready to hear both lies again and again and again between now and November.)

Not only did I find propaganda like this effective in my old job, I’ve also seen it effective in real life.

Obviously, the only way we are going to fix our health care system is by debating the difficult things. We can debate Medicare for All. We can debate a public option. Both proposals deserve serious scrutiny if we want to get the next version of our health care system right.

But the attacks against these reforms deserve scrutiny, too — especially when they come from the same people and organizations that have been making them for decades, and when those arguments have historically served the interests of a health insurance system with an enormous financial stake in preventing reform.

Medicare Advantage enrollees more likely to leave after new complex diagnosis

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Medicare Advantage enrollees who developed a new complex condition, such as congestive heart failure or Alzheimer’s disease, were more likely to leave their plan for traditional Medicare the next year, according to a study published Aug. 21 in JAMA Health Forum.

Medicare Advantage (MA), the private alternative to traditional Medicare, covered 54% of Medicare beneficiaries in 2025, the study noted. MA plans offer perks traditional Medicare doesn’t guarantee, such as spending caps and built-in drug coverage, but they also use prior authorization and limited networks that can slow down care. Folks with bigger health needs have left MA at higher rates than healthier enrollees.

However, leaving isn’t simple. In most states, insurers don’t have to sell Medigap, the supplemental coverage that fills traditional Medicare’s gaps, to someone who skipped it when they first signed up. That can leave beneficiaries who get sick later stuck without that backup option.

The study was led by Mark K. Meiselbach, Ph.D., of the Department of Health Policy and Management at Johns Hopkins Bloomberg School of Public Health, and his team, who said past studies treated a new diagnosis as simply yes-or-no and mostly tracked switches to traditional Medicare. The researchers wanted to see whether leaving MA increases with the number of new conditions a person develops and to separate switches to traditional Medicare from switches to a different MA plan, something earlier research hadn’t done.

JAMA Health Forum finds Medicare Advantage members with new complex diagnoses increasingly switch to traditional Medicare, highlighting MediGap barriers, state protections, and plan limits.

The retrospective cohort study used Medicare enrollment and claims data from 2016 through 2021, analyzed in late 2025 and early 2026. Researchers tracked beneficiaries who stayed in an MA plan all of 2016 and had no complex condition through 2018. Using a standard federal algorithm, they flagged eight conditions: heart attack, Alzheimer disease, atrial fibrillation, chronic kidney disease, chronic obstructive pulmonary disease (COPD), depression, congestive heart failure and stroke.

A treatment group of 219,942 beneficiaries developed one of those conditions in 2019; a comparison group of 834,984 did not develop one through 2021. Using a difference-in-differences design, researchers compared how disenrollment changed for each group before and after 2019, then checked whether that change depended on how many new conditions someone developed, their state’s Medigap rules, and whether their MA plan was a health maintenance organization (HMO).

Developing any new complex condition raised MA disenrollment by 3.3 percentage points. Almost all of that increase came from people leaving for traditional Medicare rather than switching to a different MA plan. The more conditions someone developed, the more likely they were to leave: 1.4 percentage points with one new condition, up to 12.8 points among the 1,010 people with four or more. A new Alzheimer’s disease diagnosis had the single biggest effect, an 8.6 percentage point increase, while the rest ranged from 2.9 to 5.0 points.

Beneficiaries in the four states with Medigap guaranteed-issue and community-rating rules, Connecticut, Maine, Massachusetts and New York, were 1.5 percentage points more likely to leave for traditional Medicare than beneficiaries elsewhere. Those enrolled in HMO plans were less likely to leave for traditional Medicare but more likely to switch to a different MA plan.

Dual-eligible beneficiaries, who qualify for both Medicare and Medicaid, left for traditional Medicare at higher rates and switched MA plans less often, which the authors said tracks with Medicaid reducing their need for Medigap. Plan star ratings didn’t matter much: those in 4- or 5-star plans left at about the same rate as those in 3-star plans after a new diagnosis, suggesting star ratings don’t capture how well a plan serves sicker members.

“These findings underscore the difficulty of making an initial enrollment decision in Medicare,” the study’s authors wrote in the discussion. “Beneficiaries cannot foresee all of their future health needs when they first enroll in MA, but the consequences of that decision may depend on health events that occur years later.”

Strengths in this study include the tracked disenrollment trends before 2019, not just a single before-and-after comparison, and the study found no sign the groups were already diverging. The results also held up after adjusting for other chronic conditions people developed.

However, there are limits. Since new conditions were identified from claims, which usually show up after a diagnosis, the authors said their numbers likely undercount the true effect rather than overstate it. Counting conditions is also an imperfect stand-in for true complexity, and the group with four or more new conditions was small, just 1,010 people, so those figures carry more uncertainty. The data ends in 2021 and doesn’t reflect newer MA plan designs.

The authors confirmed that state Medigap protections make it easier for more ill beneficiaries to switch to traditional Medicare, but expanding those protections more broadly could push Medigap premiums up for everyone. And MA star ratings, as they currently work, may not reflect how well a plan actually serves members whose health needs have grown more complex.

Beyond Finger Pointing: The Fight to Lower Health Care Costs

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Beyond Finger Pointing: The Fight to Lower Health Care Costs

In a live conversation recorded at Aspen Ideas: Health, executives from a hospital, insurer and pharmacy join a top Trump administration official and leading health economist to discuss how to collectively bring down health care costs.

https://embed.acast.com/170f7fea-3078-4315-9c6b-57b666e73855/?brandColor=e65a4b

The debate over how to bring down health care costs often becomes a finger pointing game. Hospitals, insurers and drug companies all say the others are to blame.

Earlier this summer, I moderated a panel that tried to take a more collaborative approach.

We brought together a health system CEO, an insurance executive, a pharmacy leader, a top Trump administration official and one of the country’s leading health economists. The goal was to discuss how everyone in the health care industry can work together to make care more affordable.

The conversation took place at Aspen Ideas: Health, a conference that gathers policymakers, clinicians, researchers and industry leaders to talk about some of the biggest issues in health care. 

I hope you listen to the conversation in our podcast feed, read the transcript or watch the video. I moderated another discussion in Aspen with two physicians and an ethicist about how we can better navigate the uncertainty that permeates our health care system, which is also worth checking out.

Rural health is ailing. Is $50 billion enough to heal it?

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https://www.managedhealthcareexecutive.com/view/rural-health-is-ailing-is-50-billion-enough-to-heal-it-

Funding from the Rural Health Transformation Program is beginning to flow to the states. The purpose is larger, but some say its success should be measured by whether it preserves access to care at rural hospitals.

The Rural Health Transformation Program represents one of the largest federal investments ever made in rural healthcare, with $50 billion authorized over five years to help states improve access, strengthen the workforce, and modernize care delivery in rural areas. Still, as states move from planning to implementation, the program faces an immediate test: Can it deliver meaningful transformation while rural hospitals continue to face mounting financial and operational pressures?

The answer is not so cut-and-dried.

Some rural health advocates view the program as an unprecedented opportunity to rethink how care is delivered in underserved communities. Others caution that although the funding can accelerate innovation, it was never designed to replace revenue that providers could lose because of Medicaid policy changes, such as work requirements.

Alan Morgan is CEO of the National Rural Health Association.

Alan Morgan is CEO of the National Rural Health Association.

“It’s apples and oranges,” says Alan Morgan, M.P.A., CEO of the National Rural Health Association. “The Rural Health Transformation Program was created to invest in long-term innovation, not to replace Medicaid funding. Comparing the two misses the intent of the legislation.”

At the same time, Morgan acknowledged that rural providers remain deeply concerned about what lies ahead.

“The math just doesn’t work,” he said. “Nearly one-half of rural hospitals already operate at a loss, and hundreds remain at risk of closure if financial pressures continue to mount.”

Innovation versus stabilization

Congress created the Rural Health Transformation Program as part of the One Big Beautiful Bill Act that President Donald Trump signed into law on July 4, 2025. It was added in part to offset the federal Medicaid cuts in the bill, which the Congressional Budget Office estimated will total $911 billion over a 10-year period. The program provides $10 billion annually through 2030 to help states invest in new care models, workforce development, technology and other initiatives intended to improve healthcare delivery in rural areas.

Ryan Cohn is chief strategy officer at Sachs Media.

Ryan Cohn is chief strategy officer at Sachs Media.

Ryan Cohn, chief strategy officer at Sachs Media, who has advised multiple states, health systems and healthcare organizations on Rural Health Transformation Program applications, says that the funding is not sufficient to offset the broader financial challenges facing rural healthcare, noting that the fund was created after lawmakers expressed concern that the Medicaid cuts could disproportionately affect rural providers, especially rural hospitals. And once CMS implemented the program, its focus shifted toward transforming healthcare delivery rather than serving as a financial backstop for struggling hospitals.

“The real question isn’t whether $50 billion is enough money,” Cohn comments. “It’s whether we can stand up a new care model fast enough to replace a hospital that may close in the next few years.”

Harold D. Miller, M.S., president and CEO of the Center for Healthcare Quality and Payment Reform, says he believes the program has the potential to preserve services in rural communities, but only if states have enough flexibility to direct funding where it is needed most.

“The $10 billion per year in new funds under RHTP [Rural Health Transformation Program] could go a long way to preventing the loss of services in rural areas if the money could be directed to the hospitals that are currently being underpaid,” Miller observes.

Instead, he adds, CMS has limited the amount states can use for direct provider payments while encouraging investment in new initiatives and technology.

“Although those investments may ultimately prove valuable, technology alone cannot replace essential healthcare services,” he says. “A phone app can’t deliver a baby, draw blood, stitch a wound or do a CT scan.”

Implementation

After months spent developing applications, states are now beginning the nuts-and-bolts work of turning proposals into operational programs.

According to Cohn, five priorities appear consistently across state plans: workforce development; telehealth and data infrastructure; prevention; new payment and delivery models; and bringing care closer to patients through mobile clinics and regional care networks.

Joe Ganley, J.D., vice president of government and regulatory affairs for athenahealth, says rural practices already operate with no room to spare. “The margin for error has essentially disappeared,” Ganley said.

Joe Ganley, J.D., vice president of government and regulatory affairs for athenahealth, says rural practices already operate with no room to spare. “The margin for error has essentially disappeared,” Ganley said.

Among those priorities, workforce development stands out as the dominant theme, he says. Many states are investing in residency programs, loan repayment initiatives and “grow your own” workforce strategies that encourage students from rural communities to pursue healthcare careers locally in hopes they will eventually remain there.

Technology investments also extend well beyond telehealth. Cohn says states are focusing on improving interoperability so rural hospitals, clinics and emergency medical services can share patient information more effectively. Others are proposing artificial intelligence for population health, drone delivery of medications and laboratory tests, and technology-enabled transportation programs designed to improve access to care.

Even so, implementation presents significant challenges. “This money was built to move fast,” Cohn says. Some states first had to establish entirely new administrative structures before funding could reach providers. Others continue to develop procurement processes while preparing to demonstrate measurable outcomes that will influence future funding allocations.

Sustainability also remains an open question. “A new residency slot or telehealth program only counts if it outlives the initial RHTP funding,” Cohn says. “Not every plan has a fully formed answer for what happens in year six.”

Financial pressures

Although much of the discussion surrounding the Rural Health Transformation Program focuses on future transformation, many providers continue grappling with immediate financial realities.

Joe Ganley, J.D., vice president of government and regulatory affairs for athenahealth, says rural practices already operate with no room to spare. “The margin for error has essentially disappeared,” Ganley said.

When patients delay appointments, ration medications or postpone treatment because of cost, practices experience more than declining revenue. Patients often arrive later with more complex medical needs, increasing clinical and operational burdens. “Providers feel it immediately — in no-shows, in collections and in the clinical complexity of patients who arrive later and sicker,” Ganley says.

Beyond those financial pressures, Ganley notes that rural physician practices also continue to struggle with workforce shortages and limited interoperability.

“Many rural practices operate with one to two months of reserves,” Ganley said. “That’s not a buffer — it’s a cliff. Any disruption to payment flows, whether from coverage losses, billing delays or reimbursement changes, can threaten the viability of organizations that communities depend on as their only access point for primary care.”

He adds that recruiting and retaining clinicians remains difficult, while limited interoperability makes it harder for rural providers to coordinate care and participate in value-based payment models.

Measuring success

Even as the rural health program dollars begin reaching states, many believe it is far too early to determine whether the $50 billion fund will live up to its name and change rural healthcare for the better. “I think it’s too early to determine, and that’s the honest truth,” says Morgan. Many states are only beginning to release requests for proposals and identify where funding will be directed. Although states must obligate the funds within required timelines, many providers are still waiting to learn whether they will receive support and how they will be permitted to use it. “Our members are concerned,” Morgan adds. “Are we going to receive any of the money? How are we going to be able to use the funds? There’s just a lot yet unknown.”

Miller notes the program’s success should not be measured by the number of grants awarded or technology projects launched. He says he believes there is a relatively simple way to take stock of the program.

“If hospitals continue to close and eliminate services in 2026 and 2027, even with $10 billion in new funds available each year, the Rural Health Transformation Program should be viewed as a failure,” Miller says.

In his opinion, preserving essential healthcare
services — including obstetrics, emergency care and primary care — must remain the priority. Even if federal Medicaid policy changes were reversed tomorrow, many small rural hospitals would continue struggling because reimbursement from Medicare Advantage, commercial insurers and other payers often fails to cover the cost of providing care in sparsely populated communities.

The No. 1

Morgan said workforce issues remain the No. 1 concern among rural hospitals, followed closely by financial stability. He’s particularly optimistic about states using the rural health funds to create “grow your own” workforce initiatives that recruit students from rural communities, train them locally and encourage them to practice close to home
after graduation.

“I think that’s going to be interesting,” Morgan says, noting that locally trained clinicians are far more likely to remain in rural communities over the long term. Cohn heard similar priorities while working with states on their applications. “Workforce development is in most states’ plans because providers everywhere are facing significant staffing shortages,” he says.

Some states are investing in rural residency programs, loan repayment initiatives and accelerated licensing efforts. Others are combining workforce initiatives with telehealth and regional partnerships designed to extend scarce clinical expertise across larger geographic areas.

Ganley notes that technology can help relieve administrative burdens, but only if it simplifies clinicians’ work rather than adding complexity.

“The practices that will sustain access are the ones that can operate efficiently under financial constraints, reduce administrative burden without growing their administrative head count and connect their patients to the right level of care regardless of where that care is delivered,” he says.

Behavioral health providers are experiencing many of the same pressures. Shannon Werb, CEO of Array Behavioral Care, says that disruptions in Medicaid coverage often interrupt outpatient behavioral healthcare, causing patients to delay treatment until they require crisis care.

“When patients lose coverage or face affordability challenges, they often delay care until their condition reaches a crisis point,” says Werb. “At that stage, the emergency room becomes the default access point for treatment.” The result, he said, is longer behavioral health boarding times, increased uncompensated care and additional strain on hospitals.

The long haul

The biggest question about the infusion of federal funds into rural healthcare is whether the investment will continue paying dividends after federal funding expires. For a problem that has been decades in the making, five years is not that much time, and $50 billion is not that much money.

Because the program is scheduled to end after five years, healthcare leaders repeatedly emphasized the importance of building sustainable systems rather than launching short-lived projects.

“The real measure isn’t dollars spent or programs announced,” Cohn says. “It’s whether a rural patient can access care in 2028 that they couldn’t get in 2025.”

Morgan agrees that outcomes, not spending, will determine whether the initiative succeeds. The first warning sign, he says, would be an increase in rural hospital and rural health clinic closures. He says life expectancy is the ultimate yardstick. “We continue to see a decline in the overall life expectancies of rural communities versus urban. At the end of the day, that’s the measure that really matters.”

Employer health care costs projected to rise 9.5% in 2027, report finds

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https://www.managedhealthcareexecutive.com/view/employer-health-care-costs-projected-to-rise-9-5-in-2027-report-finds?ekey=RUtJRDo1ODIyQzMzMS0wNDZELTQ0NkItQjlGRS03NTE4MUEwNjQ2QzM%3D&utm_campaign=newsletter_b&utm_medium=email&_hsenc=p2ANqtz–v8hus62Jy_g533UgfhyaVdsMKkfljE7eB5gHhDZO7ljQd9aKKgIWHdbLx4Uod4ZKlz4EoBbi1ImB56La4mV1JSsUpYQ&_hsmi=436123068&utm_source=hs

Key Takeaways

  • A 9.5% 2027 increase would mark the fourth consecutive year of near–double-digit employer medical trend, based on data from 1,100+ employers covering 7.9 million employees.
  • Utilization growth, chronic-condition burden, and increased high-cost claim incidence are central contributors to accelerating plan spend across employer-sponsored coverage.
  • GLP-1 costs are rising as use extends beyond diabetes/obesity into cardiovascular disease, sleep apnea, and CKD, with oral options expanding eligibility and limiting employer cost-containment.
  • Employers funded ~82% of total plan costs in 2026, yet employees still paid $5,297 on average, driven by a 10.2% out-of-pocket increase and leaner plan designs.
  • Industry variation is material, with 2025–2026 employer cost growth ranging from 6.5% (health care) to 9.8% (finance/insurance), echoing KFF and Mercer trend warnings.

Aon projects a fourth straight year of near double-digit health cost growth for U.S. employers, with 2027 costs set to top $19,000 per worker.

stethoscope, arrow up © Anwesha - stock.adobe.com

Employer health care costs in the United States may rise 9.5% in 2027, extending a fourth consecutive year of near double-digit increases the longest such stretch since 2007, according to a recent analysis by Aon.

Employer healthcare costs could rise 9.5% in 2027, pushing the average per-employee price tag past $19,000, according to a recent analysis by the consulting firm Aon. If this happens, it will be the fourth year running that cost growth has approached double digits, a run Aon says is unmatched in its trend data since 2007. The company currently has data from more than 1,100 U.S. employers representing 7.9 million employees.

Behind the projected growth is a familiar mix of pressures, including climbing utilization of medical services, a growing share of members with chronic conditions, and more high-cost claims moving through employer plans. Specialty and GLP-1 drug spending adds another layer, which is growing as GLP-1s move beyond diabetes and weight management into cardiovascular disease, sleep apnea and chronic kidney disease. New oral formulations are widening the pool of patients who can access the drugs, which cuts against employers’ efforts to hold the line on pharmacy spend. Aon also flagged providers’ use of AI tools for clinical documentation and coding, which the firm says is contributing to higher billed charges in some cases.

“The organizations best positioned for the future will be those that can proactively identify emerging risks and take targeted action before costs escalate,” Debbie Ashford, North America Chief Actuary, Health Solutions for Aon, also said in the news release. “Health care costs are becoming increasingly difficult to manage through traditional approaches alone. Employers will need better data and deeper insights to understand where costs are rising and how they can make more informed decisions about their health care investments.”

Who absorbs the increase?

Employer health plans don’t pass every dollar of that growth on to workers. Aon’s data shows employers picked up approximately 82% of total plan costs in 2026, a share that’s held roughly steady even as the underlying cost trend accelerated. Employer costs more than doubled from 2022 to 2026: climbing from 3.7% to 8.8% in 2026, respectively.

Employees still felt it. The average worker paid $5,297 toward health care in 2026, split between $3,130 in payroll premium contributions and $2,167 in out-of-pocket spending, up from $4,909 the year before. The out-of-pocket piece grew faster than premiums, up 10.2%, which Aon attributes to both higher utilization and a shift toward leaner plan designs with more member cost-sharing built in.

The picture isn’t uniform across sectors. Aon’s industry breakdown shows a wide spread in how much employer costs grew from 2025 to 2026:

  • Finance and Insurance: 9.8%
  • Technology and Communications: 9.1%
  • Public Sector: 8.8%
  • Professional Services: 8.7%
  • Retail and Wholesale Trade: 7.7%
  • Manufacturing: 7.5%
  • Health Care: 6.5%

How this compares across the industry

Aon’s numbers land alongside other recent industry data pointing the same direction. KFF’s benchmark survey of employer health benefits found family premiums rose 6% in 2025 to reach nearly $27,000, a jump the group said outpaced general inflation by a wide margin. KFF has separately flagged early signals that 2026 cost trends would run even higher. Mercer and the International Foundation of Employee Benefit Plans have published similar warnings over the past year, with some industry surveys describing the coming increase as among the largest employers have faced in over a decade.

“Employers have now experienced several consecutive years of health care cost increases that are approaching double digits,” Mike Pasterick, North America Health Solutions Leader for Aon, said in the news release. “At this level, rising health care costs become much more than a budgeting challenge and influence organizational decisions from benefits strategy and employee affordability to broader workforce and financial planning priorities.”

College Football and Healthcare: The Uncomfortable Parallel

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College Football and Healthcare: The Uncomfortable Parallel

Over the weekend, I caught parts of North Carolina’s 15-10 win over TCU in Dublin, Ireland and NC State’s loss to Virginia 34-8 in the ACC opener. All told, the NCAA Week Zero schedule included 8 games with few surprises but a welcome arrival to the sport’s avid followers including me.

As the NCAA commences its Week One schedule with 87 games Thursday thru Monday on tap, I find myself conflicted. I am a college football fan having watched religiously for years. Growing up in Chattanooga, Thanksgiving Day started with worship at Central Church of Christ, lunch at S&W Cafeteria downtown and Chamberlin Field in the afternoon to watch the University of Chattanooga Moccasins take on the likes of Southern MS and Furman. And News Year’s Day Bowl games were equally sacred: the Cotton, Gator, Orange, Sugar and Rose Bowls featured marque teams who’d survived to 10-game seasons and final rankings were determined by sports media. Pop would re-locate our second black and white TV to the den so we could watch 2 at once (provided the rabbit ears were aimed right). And Mimi made unhealthy Vienna sausage wraps so we never had to leave the room.

Those days are gone. That was before NIL (name, image and likeness) money poured in to lure elite athletes to the highest bidders. That was before the 5 major bowl games played on New Year’s Day morphed into 46 bowl games lollapalooza played over 45 days. That was when the Big 10 had 10 mostly midwestern teams (vs. 18 today including Oregon, Washington, USC and UCLA) and the SEC had 12 mostly southeastern teams vs. 16 today which include Teas and Oklahoma this year. And that was when a family of four could afford to attend a game: per StubHub, tickets for my most cherished contests this season will be $550 to $9093 for Texas-Ohio State September 12, and $434 for the “get in” seats to $4657 for the Michigan-Ohio State matchup November 28.

On Bill Maher Saturday night, Wesleyan University President Michael Roth answered the hyper- cynical host’ questions about the value of higher education and left-leaning faculty bias. Wesleyan is among the three “Little Ivies” (along with Amherst and Williams) where the curriculum is liberal arts, tuition is high, intercollegiate athletic competition is modest and politics is decidedly progressive—a “monoculture” per Roth. Maher questioned whether higher education today educates young adults to be informed, critical thinkers or indoctrinates leftist ideology. Roth countered that college faculty engage students to be thoughtful on issues otherwise overlooked/neglected.  Maher ended ‘it’s not working.’

Their dialogue might have been about healthcare. The health system, like higher education, faces a crisis of confidence and its future is being defined by its finances. The health system’s version of NIL centers on aim now centers on business models for specialty services in modern facilities. The Big Players in both industries– consolidated hospital systems, big multi-specialty medical groups, corporate insurers and universities with Big Endowments and Big Athletic Department budgets– are doing well while others struggle.

Higher education and healthcare face extinction as we’ve known them. The public thinks their purpose has been compromised by their growing dependence on private capital—boosters, donors, investors, private equity, and corporate partners. Public money plays a small role for the Big Players. The unintended consequences are well documented—higher prices for tuition and services, variable levels of institutional quality based on access to funds, and increased polarization between have’s and have nots.

In healthcare, it’s no secret. Physicians who specialize make 3 times what primary care clinicians earn and 10 times community health worker annual wages. The 2Q earnings of the nation’s multi-hospital systems were robust per Fitch while small and independent hospitals struggled. The same dynamic holds true for nursing homes, health insurers and public health programs—Darwinian reality that money matters (sometimes too much). In healthcare, it’s manifest in a growing number of shifts…

  • CMS’ crackdown on fraud, waste and abuse to protect public money is healthcare.
  • Congress’ Bipartisan demand for price transparency and limits on private equity ownership of nursing homes, hospitals and medical practices.
  • Court challenges to monopolistic-like business practices that control licensing, drug patents or even the CPT coding system.
  • Public belief that an unforeseen medical bill will bankrupt the average household.
  • The public’s growing acceptance of embracing alternative sites and methods of care and ways of paying for them.
  • And recognition by industry leaders that industries like healthcare and higher education face uncertain futures.

I will watch college football this weekend and, no doubt, hear lots about star players one year removed from their previous NIL contracts. They’re usually the highest paid and best known on the team. And, for some of that team’s followers, their performance on the field will matter more than their education off the field and the academic performance of the school.

Healthcare and higher education are institutions of noble, essential purpose to society. Both face criticism they’ve lost their way and their value propositions are suspect.

PS: Last week, Dolly Parton died leaving a legacy of music and philanthropy appreciated worldwide. I first met Dolly and Carl as he inspected the paving job his company completed in my neighborhood and later as a Vanderbilt Medical Center donor ambassador. A life well-lived and worthy of respect and appreciation.

This week, a jury verdict is expected in the trial of Lindsay Clancy that will put the spotlight on postpartum psychosis — a rare, severe psychiatric emergency that causes a rapid loss of touch with reality after childbirth. It’s is not currently included in the Diagnostic and Statistical Manual of Mental Disorders (DSM-5), but there’s momentum to have it added.