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Healthcare Brew

Medicaid

Nicole Ortiz

Healthcare Brew delivers the latest news and trends in healthcare.

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The first year of a new presidential administration is always busy, but so far 2025 seems to have past years beat, as President Donald Trump has signed a record number of executive orders in just his first 100 days.

Now that we’re a little over halfway through the year, we wanted to look back on what has happened in the healthcare industry so far.

With a new administration comes the appointment of new department heads. That has included 

 being named secretary of the Department of Health and Human Services (HHS), 

 tapped to lead the Centers for Medicare and Medicaid (CMS), 

 as director of the National Institutes of Health (NIH), Marty Makary to run the FDA, and Susan Monarez to head up the CDC.

However, these departments also saw major staffing overhauls. The NIH saw top officials 

 in mid-February, with hundreds of layoffs following. HHS announced in late March it would lay off 10,000 employees—on top of 10,000 who had resigned already—which has impacted specific research areas like 

Across all agencies, funding has also been 

, impacting the industry from developing research to funding grants to keeping 

One of the concerns that came up frequently during RFK’s confirmation hearings was his past associations with vaccine disinformation and skepticism. Since taking over HHS, he has vowed to 

 that would analyze private medical records.

The spike in proliferating misinformation has public health and pharma experts 

. In particular, mRNA has come under fire (again), and some researchers are worried cuts might 

Previously, the Biden administration had also implemented a program that allowed CMS to negotiate drug prices directly with drugmakers. Trump took that a step further by signing an executive order that would 

 to be more in line with the lower costs other countries pay.

And speaking of more transparency around pricing, he also signed an executive order in late February that updated a ruling from his first administration, requiring hospitals to 

Before the election, experts were speculating about how Medicare and Medicaid 

Since cutting federal spending was a major goal of this administration, it perhaps comes as no surprise that one of the 

But, canceling out any potential savings made there, CMS announced in early April it would 

 average Medicare Advantage payments to 5.06%—a $25 billion increase—from 2025 to 2026.

Then on May 22, the House of Representatives passed a 

 that called for significant Medicaid cuts (nearly $800 billion, according to KFF) and a revamped 

, potentially leading to millions without insurance coverage. Before it was passed in the House, a report found that Medicaid cuts of this scale could lead to more than 

Across the board, diversity, equity, and inclusion (DEI) initiatives have been targeted by this new administration. Healthcare has been no different, with 

While Trump signed an executive order in late January to ban clinicians and defund institutions providing 

 for young patients, a legal expert told us the law 

. (Though that didn’t stop some institutions from pausing this type of care, at least temporarily, 

Collage of the Capitol building and hands wearing medical gloves holding pills and a vaccine bottle, arranged within abstract shapes.

Here are some of the healthcare policy highlights from the first half of the year

Because the news cycle has been so slow these last six-ish months, amirite?

Cassie McGrath

Working hard, or hardly working? That’s what Arkansas lawmakers want to ask Medicaid enrollees—again.

In June 2018, the state instituted a work requirement for Medicaid (which included coverage for 954,997 people). The idea was to make beneficiaries prove they had a job in order to get federal assistance unless they couldn’t work, were pregnant, or had a disability.

 and effectively ended the requirement, but 18,000+ Medicaid members had already lost coverage, NPR reported. As of August 2024, nonprofit health policy research organization KFF said about 780,000 people were enrolled in Medicaid in Arkansas.

 for Medicaid (with looser reporting requirements), even as the federal government works on a budget that could 

 and Republican leaders reportedly consider national work requirements.

 by think tank the Urban Institute found Arkansas’s program didn’t raise employment numbers as intended—but it did lead to people losing insurance.

Arkansas’s program applied to adults ages 30–49 and required them to file a monthly report on their employment status (at least 80 hours per month) to keep coverage. Recipients were notified of these policy changes via mail, and if they didn’t respond in three months, they risked losing coverage, according to 

 conducted by the Harvard T.H. Chan School of Public Health, which also reported similar findings as Urban Institute for changes in employment and uninsurance rates.

To study the effectiveness of the program, Urban Institute researchers pulled Census data and compared coverage and employment trends in that age group, specifically looking at people who earn low and moderate incomes and do not have dependent children, both before and after the program was implemented.

The researchers found Arkansas’s uninsurance rate was similar to other states before the program’s implementation, but after, uninsurance rose in that age group (22.6% to 29.9% from 2016 to 2019). They found “no change” in employer-sponsored insurance, and other age groups’ uninsurance rates also remained the same.

Meanwhile, the researchers found “no statistically significant change in employment in Arkansas compared to other states,” Michael Karpman, principal research associate in the health policy division at the Urban Institute and an author on the study, told Healthcare Brew.

“The effect was negative, but statistically not significant,” he added.

While the program didn’t last long, it did provide data for experts to determine the work requirement’s effectiveness, as Arkansas was the first state to implement one for Medicaid. Georgia is the 

 to make their own rules under President Donald Trump’s first administration.

 people on Medicaid are already working, in school, caring for a child, or unable to work, according to nonprofit Robert Wood Johnson Foundation, which funded the study in an ongoing research effort.

“There’s just not a lot of room to increase employment among the population that’s already working or has faced different barriers to work,” Karpman said.

The other challenge is—unsurprisingly—the bureaucracy that comes with these types of programs.

“People tend to lose coverage not because they’re able to work and they choose not to, but instead, because of difficulty navigating the paperwork requirements,” Karpman said. “Many people never learn about the policy.”

 from the Urban Institute estimated a national work requirement could leave 4.6 to 5.2 million US residents ages 19 to 55 uninsured. For Arkansas specifically, the report estimated as many as 87,000 patients could lose Medicaid coverage.

Karpman said there’s “a wealth of research” that shows health insurance 

“So the loss of Medicaid under work requirements would be expected to have the reverse effect,” he said.

Health insurance card displaying 'employed?' with 'no' marked next to it, gradually fading.

Arkansas Medicaid work requirement increased uninsured population, hurt employment 

A new study from the Urban Institute found work requirements may not boost employment. 

illustrated headshot of caroline catherman, healthcare brew reporter

Caroline Catherman

Despite low star ratings and an ongoing legal battle, Humana saw a surprisingly strong quarter, as reported in Wednesday’s Q1 2025 earnings.

The company brought in more than $32.1 billion in revenue in Q1 2025, just below Wall Street’s estimate of $32.15 billion but well above the $29.6 billion in Q1 2024. The company also reported an adjusted earnings per share (EPS) of $11.58 this quarter, 

Prepared remarks noted this better-than-expected performance was partly because there was “a shift in the expected timing” of certain expenses and investments, and partly because of outperformance in 

, Humana’s pharmacy, primary care, and home services segment.

The company lowered its full-year generally accepted accounting principles (GAAP) EPS guidance to $14.68 from $15.88, but kept its adjusted guidance the same at $16.25.

“While there are still challenges to navigate, there are no surprises,” President and CEO Jim Rechtin said during the call.

Of course, there was one ginormous elephant in the room: The payer was one of several that 

 the federal government last year over lower-than-expected Medicare Advantage (MA) 

Humana saw the largest rating drop of any major MA insurer, according to consulting firm 

. Other payers, like UnitedHealth and Centene, got higher 

 in December 2024 after filing their own lawsuits.

On April 14, the Centers for Medicare and Medicaid Services 

 Humana’s internal administrative appeal to change its rating, but a decision hasn’t yet been made on its lawsuit.

Rechtin said Humana execs do not know when a decision will be reached, but the outcome will determine when the company expects to get back to its target 3% margin for MA.

“If you set stars aside, we feel good about the underlying progress of the business,” Rechtin said.

When asked during the Q&A portion of the earnings call how the company would cope if there was no decision by the first Monday in June—the deadline for MA plans to submit bids for the following year—George Renaudin, the company’s president of insurance, declined to share Humana’s pricing strategy “given the competitive nature of the bids.”

The call came weeks after the largest MA provider, UnitedHealth Group, announced a poor quarter following a surprisingly high amount of 

Humana—the second-largest MA provider, with 18% of the market—has 

 amid rising medical costs before but wasn’t bogged down by that issue this time after it dropped “certain unprofitable plans and counties,” according to its earnings report. 

The payer expects to lose about 550,000 individual MA members by year-end. It currently has 5.2 million, compared to nearly 5.7 million at the end of 2024. In total, including Medicaid, Humana has 14.8 million medical members, not including specialty membership like dental coverage.

“We’re pleased with our membership changes to date given the members that we gained versus those we exited…with a high concentration of members in our best-performing markets, including markets such as Florida, Illinois, and Texas,” Renaudin said.

The exterior of a building with a sign for Humana

Earnings are up, members are down for Humana in surprising quarter

Who needs a five-star rating when you’ve got $32b in revenue and beef with the feds?

Maia Anderson

Imagine working multiple jobs at once to provide healthcare access to the most vulnerable residents of your community while operating on razor-thin margins and also saving the overall US healthcare system money.

That’s what it takes to be the CEO of a community health system (CHCs), according to Andrea Schwab-Galindo, chief exec of the Tiburcio Vasquez Health Center in the San Francisco Bay Area.

, which means it’s an outpatient clinic that’s eligible for certain types of state and federal funding. The health center was founded in 1971 and now operates 14 sites, treating about 30,000 patients across roughly 113,000 visits annually.

“Unlike other CEOs at other health systems, as a community health center CEO you have to wear multiple hats,” Schwab-Galindo told Healthcare Brew. “I joke around and I tell our staff that if you work at a community clinic you can work anywhere because you really have the opportunity to learn so many things and to do a lot more than you would at a private hospital.”

Schwab-Galindo took over the reins at Tiburcio Vasquez in 2020 after working her way through various leadership roles starting in 2013. Before starting at Tiburcio Vasquez, Schwab-Galindo spent four years at another community health system, Bay Area Community Health.

At Tiburcio Vasquez, providers care for a “really complex patient population” of mostly children and Medicaid beneficiaries, Schwab-Galindo said.

“They come to us either because their parents don’t have access to healthcare” or because of the quality of care health centers can give patients, she said.

Having a high Medicaid population (70%, or roughly 20,000 patients) means “the total cost of care for us typically exceeds what we get reimbursed for each visit,” according to Schwab-Galindo.

The health center works with foundations and private funders and receives grants that help offset some of the costs, she said, but “funding is the No. 1 challenge that we have.”

And that isn’t unique to Tiburcio Vasquez.

CHCs typically have very thin margins, with roughly 42% having 90 days of cash or less on hand, according to Amy Simmons Farber, communications director for the advocacy group the National Association of Community Health Centers (NACHC). For the last two years, CHCs have relied on extensions of a continuing resolution to provide a large chunk of their funding, which is set to expire on Sept. 30.

Wait…what exactly is a community health center?

CHCs were first established in 1965 as part of President Lyndon B. Johnson’s “war on poverty,” and provide healthcare to everyone regardless of insurance status or ability to pay.

The health centers are typically composed of a group of outpatient clinics that provide primary care services in addition to dental care, mental health care, nutritional care, and more, according to Simmons Farber.

Today, there are roughly 1,500 CHCs serving about 32.5 million people in the US in both urban and rural areas. Of those patients, roughly 90% have low incomes (at or below 200% of the federal poverty level, which in 2025 is $32,150 for a household of four), 18% are uninsured, 64% are people of color, and 62% have public health insurance, according to an NACHC fact sheet.

Additionally, the health centers employ roughly 310,000 providers including physicians, nurses, and advanced practice professionals.

The purpose of the centers, aside from providing greater access to healthcare, is to save the overall healthcare system money by preventing costly emergency room (ER) visits and hospitalizations, according to NACHC. ER visits cost the US $80.3 billion in 2021, according to the most recent data from the Agency for Healthcare Research and Quality, a division of the US Department of Health and Human Services.

In 2023, the Congressional Budget Office estimated that funding CHCs would reduce spending on federally subsidized health insurance by $3.4 billion between 2024 and 2033 because the health centers “could provide more cost-effective patient care.”

The financial challenges of running a community health system could become even greater if significant Medicaid cuts being floated by Congress are passed.

While Congressional Republicans have said they don’t intend to cut Medicaid, the House of Representatives in February 

 a budget resolution that calls for $880 billion in budget cuts from the Energy and Commerce Committee, which oversees Medicaid and Medicare.

If the cuts are passed, Schwab-Galindo said she and other CHC leaders would be forced to consider reducing staff and closing clinics, which would jeopardize healthcare access for the thousands of patients she says rely on Tiburcio Vasquez.

And in the long term, Medicaid cuts would likely mean more costs for the overall health system, because inadequate access to primary and preventive care could lead to 

“Community health centers and clinics could be forced to cut back services,” Schwab-Galindo said. “That’s really jeopardizing the work and access for millions of patients. For us, it’s thousands of patients, and for folks in California, it’s hundreds of thousands of patients that need access to critical care.”

CEO Andrea Schwab-Galindo on the challenges of running a community health center 

Running a health center on razor-thin margins and unstable funding is no easy feat. 

What it’s like to run a community health center 

Few pieces of legislation have been as impactful to healthcare as the Affordable Care Act (ACA). 

Signed into law on March 23, 2010, by then-President Barack Obama, the ACA was designed to increase access to health insurance, primarily for people who couldn’t get coverage through an employer.

And it’s been pretty successful at doing so. At the time the ACA was signed, about 19% of the adult population under age 65 was uninsured. That number fell to about 8% as of 2023. By 2024, more than 45 million people received insurance thanks to the ACA, according to federal estimates.

“The Act has become so entrenched in the way…we access healthcare, that people take for granted just how extraordinary its impact has been,” Abbe Gluck, professor of law and faculty director of the Solomon Center for Health Law and Policy at Yale Law School, told Healthcare Brew. “It’s an accomplishment on par with national landmark statutes like Medicare and Medicaid and the Civil Rights Act.”

But 15 years later, the Trump administration has 

 a number of policy changes that would significantly alter the legislation, including lowering federal funding and imposing Medicaid work requirements.

The ACA made several major changes to the US health insurance system.

Notably, it expanded eligibility and funding for Medicaid, required large employers (i.e., those with more than 50 full-time employees) to provide health insurance, banned insurers from denying coverage based on preexisting conditions, and created regulated, standardized marketplaces for patients to purchase insurance.

One of the ACA’s limitations, according to Gluck, who served as special counsel to the president during the Biden administration, is the fact that the pharmaceutical industry was largely left out.

“There were some benefits to increasing coverage under Medicare for prescription drugs, which were very important, but generally there was not a wholesale reform of the pharmaceutical industry,” she said.

The Biden administration took a step to change that in the 2022 Inflation Reduction Act (IRA), when it allowed the Department of Health and Human Services (HHS) to 

 the prices of a limited number of brand-name drugs. While they don’t go into effect until 2026, the negotiated prices are 38% to 79% 

Besides negotiating drug prices, other notable changes to the ACA include when, in 2017, the first Trump administration 

 penalties associated with the individual coverage mandate, a part of the ACA that required every citizen to have health insurance, Gerald Kominski, senior fellow at the UCLA Center for Health Policy Research, noted.

Getting rid of the individual mandate penalty had a “marginal” effect on the number of uninsured people in the US, according to Kominski. A 2022 

 from American University found that the likelihood of being newly uninsured increased by 24% following the elimination of the penalty.

Also under the first Trump administration, HHS 

 to impose Medicaid work requirements, meaning certain beneficiaries had to submit proof they were either employed or engaged in other approved activities, like going to school, to keep their coverage. Between 2018 and 2020, 13 states implemented work requirements, though the Biden administration 

The next significant change came with the IRA, which 

 for marketplace subsidies, Kominski noted. Previously, people with incomes up to 400% of the federal poverty level were eligible for subsidies to help pay for insurance via ACA marketplaces. The IRA removed the 400% cap, giving people with higher incomes access.

ACA marketplace enrollment surged following the change. In 2020, 11.4 million people bought health insurance from a marketplace, and by 2024, that number grew to 21.4 million—an 88% increase, according to KFF.

As the second Trump administration has started to make 

 to the federal budget, Congress is reportedly considering making significant changes to the ACA.

The House’s budget resolution adopted in February calls for 

 in budget cuts for the House Energy and Commerce Committee, which oversees Medicare and Medicaid. No specifics have been shared on what changes may be made to the federal insurance programs, but a few 

 are under consideration, according to KFF.

 for Medicaid expansion states. As part of the ACA, the federal government covers 90% of expansion states’ Medicaid budgets, while nonexpansion states get a 50%–77% match rate, depending on the state’s per capita income.

Twelve states have trigger laws saying that if their federal match rate falls below 90%, they’ll stop their Medicaid expansion programs, Kominski noted. Other states “would be hard-pressed financially to make up the loss of federal funding to maintain the expansion,” he added, which would “have a significant impact on the lowest-income individuals in the country” by effectively making them ineligible for Medicaid.

Another potential change, Kominski said, involves the expanded subsidies created under the IRA, which are set to expire at the end of 2025. Congress has the ability to extend the subsidies, but “it’s a safe bet” it won’t, he added.

Economic and social policy think tank Urban Institute 

 in November 2024 that 4 million people would lose health insurance if the subsidies expire. Insurance would also become “much more expensive for millions of people,” Gluck said.

 have signaled support for bringing back Medicaid work requirements. Three states—Ohio, Arkansas, and Arizona—are waiting on CMS to approve or deny a waiver allowing them to implement work requirements, and 10 others have pending legislation that, if approved, would direct the states to seek federal approval for work requirements, according to a Medicaid waiver 

 plans to cut Medicare or Medicaid. However, 

 assert it’s impossible to reduce the Energy and Commerce Committee’s budget by $880 billion without cuts to Medicaid or Medicare.

All these potential changes would largely shift Medicaid costs to states and away from the federal government, likely resulting in massive eligibility reductions, Sarah Lueck, VP for health policy at the Center on Budget and Policy Priorities, said during a Feb. 10 

“Gutting [the ACA] or significantly reducing the financing is going to be harmful to a lot of low- and middle-income families in the US,” Kominski said. “I hope that the drastic approach that’s being proposed by the current administration is not successful, but I fear that it will be, and it’ll be a high price to pay in terms of the health of millions of Americans.”

The podium waits for House Speaker Nancy Pelosi, D-Calif., and other speakers before an event on the West Front of the U.S. Capitol on October 29, 2009 unveiling the long-awaited House Democratic health care overhaul package, known as the "Affordable Health Care for America Act." (Credit: Scott J. Ferrell/Getty Images)

How the Affordable Care Act has transformed healthcare—and what its future may hold

Massive federal budget cuts spell uncertainty for the ACA. 

How the ACA has transformed healthcare—and what its future may hold

The Centers for Medicare and Medicaid Services (CMS) won’t go forward with a 

 that would’ve required the government payers to cover GLP-1 drugs for obesity.

 on April 7, CMS listed Part D coverage of anti-obesity medications as one of several Biden administration proposals for the 2026 contract year to be scrapped. The agency didn’t give details on why it decided against GLP-1 coverage, but said it might revisit the issue later on.

While Medicare currently covers GLP-1s for certain diagnoses like diabetes and cardiovascular disease, the Biden administration proposed in November requiring GLP-1 coverage for obesity, which goes against federal statute. States are allowed to cover anti-obesity drugs through Medicaid, but only 13 states currently do so, according to KFF.

Insurers have been largely against the proposal, arguing that covering GLP-1s would be costly.

America’s Health Insurance Plans (AHIP), the health insurance industry’s largest trade group, submitted comments to CMS in February saying the costs of covering the drugs could “place upward pressure on premiums and government costs.”

The Congressional Budget Office estimated in October 2024 that requiring Medicare to cover GLP-1s for obesity would add nearly $35 billion to federal spending by 2034. CMS estimated it would increase Medicaid spending by $15 billion over 10 years.

AHIP said in its comments that the actual costs “may far exceed CMS estimates.”

Mary Beth Donahue, CEO of the Better Medicare Alliance, a nonprofit advocacy group for Medicare Advantage, said in a statement that the group was “encouraged that the administration took a measured approach and declined to make major changes at this time.”

Some argue the up-front costs would be worth it.

Manuel Jurado, associate partner at consulting firm the Dedham Group, told Healthcare Brew in December that Medicare and Medicaid coverage of obesity medications could save costs down the road, as GLP-1s may also 

University of Southern California researchers estimated in a 2023 

 that GLP-1 coverage would save Medicare up to $245 billion in 10 years if private insurers also covered the drugs.

Millicent Gorham, CEO of the Alliance for Women’s Health and Prevention, said in a statement that the coverage would have been “transformative” for people with obesity who rely on Medicare and Medicaid.

The American Medical Association also supports GLP-1 coverage, but in a January letter to CMS, CEO and EVP James Madara cautioned against increasing premiums.

Courtney Breen, a US biopharma senior research analyst at brokerage firm Bernstein, reportedly told 

 CMS’s decision not to cover GLP-1s was “not surprising,” as the Trump administration is also considering imposing pharmaceutical tariffs.

After CMS finalized the rule on April 4, Eli Lilly and Novo Nordisk—the makers of Zepbound and Ozempic—saw their stocks drop 6.5% and 6.8%, respectively, by market close, according to Zacks Investment Research.

“Today, over 55 million Americans have insurance coverage for FDA-approved obesity medications—it is essential that seniors are in the same position,” Novo Nordisk spokesperson Jamie Bennett said in a statement sent to Healthcare Brew. “We cannot support a system where a patient loses insurance coverage for a chronic disease simply because they entered into Medicare.”

Eli Lilly spokesperson Jared Shapiro said in an emailed statement that the company is “disappointed” in the Part D rule “because it is not the best reading of the statute and impacts patient access to obesity treatments.”

“We will continue to work with the Trump administration and congressional leaders to ensure people living with obesity are covered by Medicare and Medicaid and are no longer left behind,” he said.

Catherine Howden told Healthcare Brew Medicare Part D and Medicaid coverage is "not appropriate at this time," but CMS may consider options in the future for anti-obesity medications.

Update 04/10/25: This story has been updated to include a comment from CMS.

Semaglutide injection pen or cartridge pen for diabetics and weight loss in female hand. Medical equipment for diabetes patients

Medicare, Medicaid won’t be required to cover GLP-1s for obesity, CMS says 

Insurers have warned the proposed requirement would be costly. 

Mehmet Oz has been confirmed as the new director of the Centers for Medicare and Medicaid Services (CMS).

 the cardiac surgeon and former daytime television host on April 3 in a party-line vote of 53–45.

He will lead the agency responsible for providing health coverage to more than 160 million people through Medicare, Medicaid, the Children’s Health Insurance Program, and the Affordable Care Act (ACA) health insurance marketplace.

Oz has previously vowed to reform the healthcare system, in line with 

“Dr. Oz will work closely with Robert F. Kennedy Jr. to take on the illness industrial complex, and all the horrible chronic diseases left in its wake,” then-President-elect Trump said in a statement in November, after he nominated Oz for the role.

Oz’s appointment comes as discussion ramps up about 

During a March 14 Senate confirmation hearing, Oz 

 one way or the other when asked if he would agree to oppose cuts to Medicaid, the government health insurance program for people with low income or disabilities. He did say, however, he was in favor of 

The House of Representatives plans to cut $880 billion from the budget of the department that oversees Medicare and Medicaid over the next 10 years. While the White House has said it doesn’t plan to make major cuts to Medicaid, the nonpartisan Congressional Budget Office said this budget 

 without significantly cutting Medicare or Medicaid coverage.

 last month that Oz had taken a stronger stance on Medicare, expressing interest in addressing bipartisan concerns about 

 and overpayment. (The Medicare Payment and Advisory Commission predicts the federal government will spend 

 more on Medicare Advantage plans in 2025 than if those plans were traditional fee-for-service Medicare.)

 from one plan to another in the ACA marketplace without their express permission. CMS said there was “

” of unauthorized plan switches in 2024. The agency and others have made moves to better regulate brokers, like making it easier for CMS to suspend them.

“Part of this is just recognizing there’s a new sheriff in town,” Oz said in his March 14 hearing. “We actually have to go after places and areas where we’re not managing the American people’s money well.”

 to fix the US healthcare system by turning to technology like artificial intelligence (AI) to speed up Medicare Advantage’s prior authorization process.

“We have AI support tools, navigation systems that could pretty quickly adjudicate whether you should have to wait even a day to get the medication that will get you out of pain, or even a week for the procedure that you should be allowed to have,” Oz said during the hearing. “It will take the angst out of the system for the American people.”

He also said he would continue the drug price negotiation program launched by the Biden administration and that he supports “complete and radical transparency” around the actions of 