Payers

Illustration: Francis Scialabba

The Centers for Medicare and Medicaid Services (CMS) released 2027 star ratings for Medicare Advantage (MA) plans on Oct. 8, ahead of the open enrollment period’s Oct. 15 start date.

These one- to five-star quality ratings affect payers’ reputations among enrollees and investors and determine quality bonus payments, which policy and research nonprofit KFF projects will surpass $13 billion in 2026. Though this makes up just 2.3% of all MA payments, top payers see hundreds of millions or billions more in revenue than they would without the quality bonus program, per KFF.

The ratings didn’t shift much on average: CMS estimates that 37% of Medicare prescription drug contracts (188) that will be offered in 2027 earned four or more stars, compared to 44% in 2026 (229). Still, as they have in the past, the ratings rocked some payers’ stock prices and sparked litigation against the federal government.

Get the rest of the story here.—CC

      

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Pharma

Johnson & Johnson reported mixed Q3 earnings on Oct. 13.

Overall revenues for the quarter were $25.4 billion, an almost 6% increase compared to $24 billion in Q3 2025. However, net earnings fell to $210 million from $5.2 billion in Q3 last year, a decrease of 96%. The steep decline was mainly due to a $5.5 billion payment Johnson & Johnson offered in late July to settle litigation regarding claims the company’s talc powder caused ovarian cancer in tens of thousands of patients.

The company also completed a $1 billion acquisition of biotech Firefly Bio in Q3 and signed a $785 million partnership deal with biotech Sail Biomedicines to develop in vivo CAR-T therapies for autoimmune diseases.

J&J is one of the largest and most diversified healthcare companies in the world, with roughly 140,000 employees globally, $94 billion in annual revenue, and business segments spanning pharmaceuticals and medical devices.

The company’s shares closed at $248.61 on Oct. 13, about 6% lower than $263.73 the day prior. However, that’s still up over 20% from $204.07 at the start of the year.

Keep reading here.—MA

      

Payers

Illustration: Morning Brew, Photos: Adobe Stock

Bye-bye, ICHRA. Hello, CHOICE.

The scheme that allows employers to reimburse their workers to buy their own health insurance on the individual marketplace has a new name, per a Sept. 3 announcement from the Centers for Medicare and Medicaid Services (CMS) and the Small Business Administration (SBA). But aside from that, not much else about the option is changing.

Brokers and administrators are hopeful that the rebrand will help convince more employers to offer ICHRAs to their workers. While the arrangement has been around since 2020, it’s not nearly as popular as traditional group health plans. As of 2025 just 4% of firms offered ICHRA-like plans, according to KFF, whereas 61% offered health benefits overall.

Part of the strategy behind rebranding Individual Coverage Health Reimbursement Arrangements (ICHRA) to Custom Health Option and Individual Care Expense Arrangements (CHOICE) is to promote an “underused option” to small businesses, CMS Administrator Mehmet Oz said at a Sept. 14 press conference.

Health industry leaders are hopeful that the federal government will consider some changes in the near future to make this healthcare approach more attractive to employers.

Keep reading on HR Brew.—CV

      

vital signs

Francis Scialabba

Today’s top healthcare reads.

Stat: $2.8 billion. That’s the value of investment firm BlackRock’s deal to acquire a majority stake in almost 150 of Humana’s CenterWell senior primary care clinics. (Healthcare Dive)

Quote: “Based on these death reports and the hospitalizations, there are enough common factors that, I hope, would spur the FDA to look deeper at this.”—Reshma Ramachandran, an assistant professor of medicine at Yale University, on Vykat XR, a drug for Prader-Willi syndrome sold by Neurocrine Biosciences (Stat)

Read: Technology is changing breast cancer detection. (CBS)

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