Health Plan Weekly

While 2024 was an especially challenging year for health insurers, a major credit-rating firm is now predicting that 2025 and beyond may not be that much better.  

Specifically, Moody’s Ratings said in a newly issued report that it is changing its outlook on the health insurance sector from stable to negative.  

The company noted that although major insurers’ earnings growth is likely to remain in the low single digits, “insurers will continue to grapple with medical costs in excess of reimbursement rates” for both Medicare Advantage and Medicaid, “while commercial coverage also faces continued high medical costs.” Moody’s cited projections in PwC’s 2025 Medical Cost Trend Report, which estimated that commercial group medical cost trend in 2025 will be at its highest level in 13 years.  

Amid the chaos of a federal freeze on grant and loan payments issued by Donald Trump’s administration at the end of January, some managed Medicaid plans had to turn to pandemic-era funding mechanisms to ensure their contracted providers could continue operating, a trade organization tells AIS Health, a division of MMIT. And one prominent managed care plan decried the funding freeze as “reckless,” while Energy and Commerce Committee Democrats demanded answers from several federal agencies on the shutdown. 

On Jan. 27, the Office of Management and Budget announced a freeze on all federal grant and loan payments, which prompted immediate legal challenges. Although the White House noted that Medicaid and the Supplemental Nutrition Assistance Program would “continue without pause,” Medicaid payment portals were inaccessible for a time in all 50 states. The portals have since come back online and the freeze was blocked by two federal judges prior to its Jan. 28 effective date. But at least one state’s portal then went down again, causing more frustration. 

Here’s how major health insurers’ stock performed in January 2025. UnitedHealth Group had the highest closing stock price among major commercial insurers as of January 31, 2025, at $542.49. Humana Inc. had the highest closing stock price among major Medicare insurers at $293.23.

An executive order being penned by the White House would fire thousands of workers at HHS, The Wall Street Journal reported on Feb. 6, citing people familiar with the matter. But the article acknowledged that such a move may not actually materialize: The White House denied that an HHS-related order is forthcoming, and WSJ’s sources said the terms of the order haven’t yet been finalized. The news of the potential HHS worker purge comes just one day after CMS acknowledged that it was working with Elon Musk’s Dept. of Government Efficiency (DOGE) to find “opportunities for more effective and efficient use of resources in line with meeting the goals of President Trump.” CMS said two senior agency veterans — one focused on policy and one focused on operations — are “leading the collaboration with DOGE, including ensuring appropriate access to CMS systems and technology.” With the blessing of President Donald Trump, Musk’s DOGE has gained an unprecedented amount of access to federal agencies and systems in recent weeks. A federal judge on Feb. 6 limited two DOGE representatives’ access to a Treasury Dept. payments system, stating that they could have “read-only” access in order to perform their duties. 

In recent months, multiple Blue Cross Blue Shield insurers have disclosed layoffs and buyouts aimed at trimming their expenses to help them weather what one health plan called “significant economic headwinds.”  

Industry experts say that the problems plaguing those Blues — elevated health care utilization and rising specialty drug costs — have been hitting health insurers of all types. But the Blues plans may be feeling the pain more acutely.  

“This is the most stress, I think, on the operating performance we’ve seen for health insurers for a while,” Brad Ellis, senior director of North American Insurance Ratings at Fitch Ratings, tells AIS Health, a division of MMIT.