Health Plan Weekly

In 2024, U.S. health insurers’ Medicare and Medicaid businesses began to falter after experiencing years of growth and profitability amid the country’s increasing reliance on private companies to administer the two government health care programs. Experts at credit-rating firms predict that some of those headwinds are likely to ease this year, but they probably won’t go away entirely. Meanwhile, two business lines that were safer bets for insurers last year — commercial and individual market — may face new challenges. 

“We expect the industry’s operating performance will generally improve in 2025 based on Medicare Advantage repricing and product changes, as well as select county exits,” James Sung, director at S&P Global Insurance Ratings, tells AIS Health, a division of MMIT.  

The year 2025 is unlikely to bring any big mergers and acquisitions (M&A) action between the major insurers, experts predict. But small and mid-sized companies might seek such deals between each other — or try to catch the eye of a major player for a deal. 

The reason for this is that the smaller players don’t have as much money to invest in capabilities such as patient analytics — capabilities the major insurers are using to surge further ahead, says Michael Abrams, managing partner at consulting firm Numerof & Associates. “They’re in somewhat of a bind because… the big insurance companies add capabilities…that enable them to zero in on patients with chronic diseases or borderline conditions that need special attention to manage them in an ongoing way,” he tells AIS Health, a division of MMIT. “Small to mid-sized insurance companies don’t have money to invest.” 

As President-elect Donald Trump begins his second term later this month, lawyers are bracing for what will happen to the Affordable Care Act, No Surprises Act (NSA) and other major pieces of health care legislation that have been challenged in court. Attorneys and legal experts who are following select high-profile lawsuits pertaining to payers say that how the lawsuits turn out depends on how aggressive the Trump administration is in enforcing the legislation and how the Supreme Court and other courts decide to proceed. 

One case in particular that health insurers and others in the industry this year will continue paying close attention to is Braidwood Management, Inc. v. Becerra, which challenges the legality of the ACA’s requirement that nearly all payers cover numerous preventive services without cost sharing. 

CMS’s description of the maximum fair price determination process for the first 10 drugs in the Medicare negotiation program offered little additional insight into how the agency developed price offers or the manufacturer information and arguments the agency found most persuasive.

CMS released the multi-document post mortem on the inaugural Medicare negotiation process on Dec. 20, which was more than two months ahead of the March 1 deadline. Negotiated prices were announced in August.

The agency may have been persuaded to release the report early to help manufacturers participating in the next negotiation cycle better prepare for the process. The next cycle will begin with an announcement of the drugs subject to the process by Feb. 1.