Health Care Matters | September 11
Remembering September 11
On this day of remembrance, we honor those who lost their lives on September 11 and express our gratitude to the first responders, health care workers, and others who stepped forward to care for their communities.
Medicaid Financing Changes Could Accelerate Rural Hospital Consolidation
Hospitals are warning that two proposed Centers for Medicare & Medicaid Services (CMS) rules on Medicaid provider taxes and state directed payments could reduce funding beyond the cuts Congress enacted last year. Hospital groups estimate the proposals could result in hundreds of billions of dollars in additional reductions over the next decade, with financially vulnerable hospitals facing pressure to cut services, reduce staffing, consolidate, or close. At the same time, rural hospitals are increasingly exploring mergers with larger systems as they prepare for lower Medicaid revenue and rising uncompensated care. Recent deals across several states suggest consolidation may become a more common strategy for smaller hospitals seeking financial stability. Read here and here.
Why It Matters
Medicaid financing changes are likely to affect more than hospital balance sheets. For rural and safety-net providers operating on thin margins, lower state directed payments and tighter provider tax rules could narrow the range of viable operating models and make affiliation with a larger system more attractive. Those partnerships can provide capital, workforce support, and access to services that independent hospitals may struggle to sustain, but they can also reduce local competition and shift some care farther from patients. The combined effect of federal financing changes and growing consolidation pressure could reshape where care is delivered, which services remain available locally, and how states think about preserving access in rural communities.
Medicare Advantage Retrenchment Could Mean Fewer Choices and Leaner Benefits in 2027
Medicare Advantage insurers are continuing to narrow their footprints and adjust benefits as they respond to rising medical costs and pressure to improve margins. Humana plans to exit markets affecting roughly 600,000 members in 2027, with the company prioritizing higher-performing plans, including those with greater value-based care penetration. UnitedHealthcare has also eliminated about 13% of its plans across 18 states, while analysts expect Humana and UnitedHealthcare to be among the carriers making the largest benefit reductions next year. These changes come despite a roughly $13 billion increase in federal Medicare Advantage payments for 2027. Read here and here.
Why It Matters
The 2027 changes suggest that higher federal payments alone are not enough to offset the financial pressure Medicare Advantage plans are experiencing. Insurers are becoming more selective about where they compete and which benefits they can sustain, potentially leaving beneficiaries with fewer plan options, reduced supplemental benefits, or the need to change coverage altogether. Humana’s decision to favor markets with stronger value-based care participation also signals that underlying care delivery arrangements are becoming more important to plan economics. As insurers continue to rebalance their portfolios, the Medicare Advantage market may become more concentrated around products and provider relationships that plans believe can produce more predictable financial performance.
Look for the Helpers: Giving Kids a Voice in Pediatric Care
After retiring from cardiology, one physician found a new role volunteering at a nonprofit clinic serving uninsured and underinsured adults in Maryland. His experience highlights both the barriers many patients face in accessing routine care and the difference volunteer clinicians can make by bringing their time and expertise into community settings. It is a reminder that expanding access does not always require a new program or technology. Sometimes it starts with experienced people choosing to keep showing up. Read more here.
What We Are Reading
Accountable for Health Legislation Tracker
Accountable for Health’s tracker monitors federal legislation affecting accountable care, including proposals related to alternative payment models, primary care payment, quality measurement, and CMMI authority. Read here.
Designing Bilateral Medicare-Medicaid Risk Contracts in the New ACO LEAD Model
A Health Affairs Forefront article examines how states and accountable care organizations could structure bilateral risk arrangements under the Long-term Enhanced ACO Design (LEAD) Model to better align Medicare and Medicaid incentives for dual-eligible beneficiaries. Read here.
Chronic Underinvestment Is Compromising U.S. Primary Care
A Commonwealth Fund LinkedIn article examines how persistent underinvestment in primary care is contributing to workforce shortages, access challenges, and growing strain on the broader health care system. Read here.
What Comes After Ambient AI in Healthcare?
Becker’s Hospital Review explores what the next phase of health care artificial intelligence could look like as health systems move beyond documentation tools and consider broader clinical and operational uses. Read here.
Pop Health Podcast
What This Year's Proposed Physician Fee Schedule Means for ACOs
This year's proposed physician fee schedule includes a wide range of changes that could affect accountable care organizations, clinicians, and Medicare beneficiaries—from updates to financial methodology and quality measurement to new ideas for prospective payment and specialty care.
In this episode, Coral's Joy Chen and Maria Alexander speak with Jake Quinton, Chief Medical Officer for the Center for Medicare about which proposals matter most, what they signal about CMS’s longer-term vision for accountable care, and where CMS is seeking practical feedback from organizations working on the ground.