Health Plan Weekly

Recent studies in major medical journals have highlighted the effectiveness and potential cost savings associated with Food Is Medicine (FIM) initiatives such as providing medically tailored meals (MTMs) and nutritious foods to improve people’s health. However, Shelby Harrington, an Avalere Health managing director, tells AIS Health that the coverage of FIM programs is a “huge patchwork” and varies widely depending on the insurance type, with Medicare Advantage and managed Medicaid plans much more likely than commercial plans to offer the benefit.  

Harrington notes that FIM programs are most common in value-based care payment models, where providers have a financial incentive to ensure patients remain healthy and prevent complications. She adds that some MA plans offer FIM as a supplemental benefit, while some states have adopted coverage for Medicaid members, particularly those who have trouble paying for healthy food or have chronic conditions.  

Nationwide implementation of home-delivered medically tailored meals (MTMs) could prevent hospitalizations in 50 states and save $32.1 billion in health care costs in the first year alone, according to a Health Affairs study.

As a “Food Is Medicine” intervention, MTMs are meals prepared by registered dieticians for people with complex health conditions and high acuity of care. As of January 2025, 16 states have approved or proposed Medicaid section 1115 waivers that enabled MTM treatment coverage, the study reported. States that are utilizing MTMs in their Medicaid programs via 1115 waivers include Arizona, Arkansas, California, Massachusetts, New Hampshire, New Jersey, New Mexico, New York, Oregon and Washington.

HHS has proposed to cut its discretionary budget by one-third from $121 billion to $80 billion, according to a preliminary budget document obtained by the Washington Post on April 16. The Post noted that the 64-page document also outlines “a major shuffling and restructuring of health and human service agencies.” The proposal includes cutting the budget of the National Institutes of Health by about 40% to $27 billion and reducing the Centers for Disease Control and Prevention budget by about 44% to $5.2 billion. It would also eliminate the Head Start program, which provides early child care and education for low-income families, and eliminate numerous initiatives aimed at helping providers in rural areas. The New York Times reported that the cuts deal with discretionary HHS funding and not what the federal government is obligated to spend on Medicare and Medicaid. 

The case filed by the Dept. of Justice (DOJ) against UnitedHealth Group’s proposed acquisition of home health care company Amedisys will be settled via mediation. The antitrust lawsuit was first filed in November 2024, alleging that the $3.3 billion deal would eliminate competition between two of the country’s largest providers of home health and hospice services (UnitedHealth’s Optum bought Amedisys rival LHC Group for $5.4 billion in 2023). Attorneys general from Illinois, Maryland, New Jersey and New York also joined the complaint. While both firms have offered to divest part of their businesses to address federal regulators’ concerns, those concessions were ultimately not enough to appease the DOJ. Previously, a trial in the case was set to begin Oct. 27, but Judge Susan Gauvey for the U.S. District Court for the District of Maryland on April 10 signed an order to send the case to mediation in August, multiple news outlets reported.  

One week after announcing sweeping tariffs on nearly every country, President Donald Trump enacted a 90-day pause, sending whiplash through the health care sector as analysts and others struggle to guess how providers and insurers will be affected. 

The pause applies to all countries but China, which saw a 125% hike in tariffs. It also will not apply to pharmaceutical tariffs, which Trump announced are “coming soon.” 

“We’re going to tariff our pharmaceuticals, and once we do that, they come rushing back into our country, because we’re the big market,” Trump told the Republican National Congressional Committee dinner on April 8. 

Reflecting the addition of more recent fee-for-service (FFS) Medicare cost data in its estimates, CMS on April 7 projected that Medicare Advantage plans can expect to see upwards of 5% greater pay next year. After nearly a week of stock market mayhem due to concerns about U.S.-imposed tariffs, major insurers’ stocks soared on the news that an estimated $25 billion in extra MA funds may be available next year. To industry insiders, however, this isn’t necessarily a “rescue” (as Barron’s put it) or a confirmation that the Trump administration is all in on MA.  

The news was released as part of CMS’s Announcement of Calendar Year (CY) 2026 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies, an annual notice that must be published by the first Monday in April. The preliminary version of that notice, the 2026 Advance Notice, was released on Jan. 10 by CMS under President Joe Biden. The Biden administration estimated an average change in revenue of 2.23%, or an all-in estimate of 4.33% when accounting for an average risk score increase of 2.10%.