All the summer Friday vibes today, including a cocktail in mind for later. I’ve been trying to top the Paper Plane and the Broken Plane is close. Any other recs, let me know. In the meantime, to-do list in hand and ready to hit the ground running.

Caught my Eye

Hit Us with Your Best Shot. (Forcibly) retired members of Advisory Committee on Immunization Practices (ACIP) wrote a Viewpoint for JAMA. The article talks about the weakening of the US vaccine program and how it will impact access to vaccines and put U.S. families at risk of illness.  

Add it Up. The Kaiser Family Foundation reports that private health insurers are factoring tariffs into their 2026 premiums (2.4 – 3.6% are quoted examples).

Policy Via YouTube. FDA Commissioner Marty Makary shared a video where he talked about the FDA launching a Commissioner’s National Priority Voucher (CNPV) program focused on accelerated the drug review process for drugs that align to national priorities. If you watch, go to the 5 minute mark.

Fein Data. Drug Channel Institute put out a neat analysis of the 340B market. It found mail, specialty, and infusion pharmacy relationships from the three largest PBMs now comprise 25% of the 340B contract pharmacy market and 32,000 pharmacy locations are contract pharmacies (60% of U.S. pharmacies.)

Move over Congress. States are moving forward on pharmacy benefit manager (PBM) reform in big ways, picking up on federal efforts that have repeatedly stalled. Iowa passed PBM reform that forbids PBMs to incentivize patients to pick one pharmacy over another, PBMs have to pay a dispensing fee and have parity across pharmacies and all PBM pharmaceutical manufacturer rebates have to be passed on to health plans. Similar legislation has passed in Texas, Georgia, Indiana and Montana.

NICE Prep. The National Health Service in the UK is preparing for drug price hikes as a reaction to the Trump Administration’s Most Favored Nation (MFN) efforts.

Alternative Medicine. This article in the NYT (gift link) about seniors that are clubbing in their 80s and 90s as part of a government-funded initiative made me happy. I’m more pub than club but maybe I’m missing out?

Reviewing the Fundamentals – Medicaid Provider Tax

One of the Medicaid cuts being proposed in Congress is on Medicaid provider taxes. It wasn’t an area I knew a lot about and I’m thinking I’m not the only one so let’s dig in…

Medicaid provider taxes are a widespread financing mechanism used by states to fund their share of Medicaid expenditures. These are fees or assessments, placed on healthcare providers, such as hospitals, nursing facilities, and managed care organizations. Currently, all states but Alaska utilize these provider taxes to help finance their Medicaid programs, often using the revenue to increase Medicaid payment rates for the providers being taxed.

Medicaid provider taxes effectively drive up the federal match by increasing the total reported Medicaid expenditures. When a state levies a provider tax and then uses that revenue to increase Medicaid payment rates for the taxed providers, the total amount of state spending on Medicaid services increases. Since the federal government matches a portion of a state’s Medicaid expenditures (known as the Federal Medical Assistance Percentage, or FMAP), a higher reported state expenditure leads to a larger federal match. For example, if a state with a 60% FMAP taxes providers and uses the revenue to increase Medicaid payments, the federal government will contribute 60% of that increased spending, even though the initial state funds for the increase largely came from the providers themselves, rather than the state’s general fund. The match is 90% for the Medicaid expansion population.

Long story short – providers pay a fee which allows the state to pay providers more and the federal government contributes more to the state because the state paid more.

Critics argue that these taxes shift financial responsibility to federal taxpayers and can be used to fund programs that the federal government may not support, such as expanded coverage for non-citizens in some states. States argue that restricting these taxes would lead to significant cuts in Medicaid services, eligibility, and provider reimbursement rates, ultimately harming vulnerable populations.

There have been ongoing legislative and regulatory efforts to modify these taxes. Recent proposals from both Congress and the Centers for Medicare & Medicaid Services (CMS) aim to curb what they view as loopholes and exploitative practices. The House Budget Committee, for instance, has considered restrictions on states’ ability to use provider taxes, including proposals to lower the “safe harbor” threshold (e.g., from 6% to 4% or even 3%) or to impose a moratorium on the creation or expansion of new provider taxes. The Senate is proposing to lower the safe harbor threshold gradually starting this year from 6% to 3.5% in 2031 but only in Medicaid expansion states.  We’ve also seen movement on the regulatory front; CMS issued a proposed rule in May 2025 prohibiting states from taxing Medicaid businesses at higher rates than non-Medicaid businesses and ending the use of vague language to disguise Medicaid-specific taxes. These proposed changes are projected to save billions in federal spending but would create significant financing gaps and necessitate severe cuts to Medicaid programs.

For the Files

Medicare Trustees Release 2025 Report: When looking for Medicare stats, I often turn to the latest annual Medicare Trustees report. The report reviews Medicare enrollment and spending, project future spending, and evaluates the financial health of the trust funds that finance Medicare.

This year’s was a bit of a doozy. The trust fund is expected to run out 3 years earlier than last year (now 2033.) It’s like heading for a cliff and pretending to be able to fly; it just doesn’t look like this is going to end well. Something has to give because Red Bull for all seniors isn’t going to save Medicare.