This week, I felt like my brain experienced a “low memory” error. My capacity was maxed out trying to tackle a Python coding challenge—a task that exists in an entirely different universe than my usual work. It was a blend of excitement and absurdity. But being outside one’s comfort zone actually feels pretty relevant to health policy today. Doesn’t the news often feel like a combination of a wild, ambitious undertaking and complete nonsense?
Caught my Eye
Whoops, My Bad. On Monday, the Congressional Budget Office (CBO) updated its ten‑year score on the “One Big Beautiful Bill Act,” lifting the projected cost of negotiation exemptions/delays to $8.8B–$10.9B from $4.9B this summer. It turns out that CBO didn’t calculate, for example, how the provision would push Keytruda negotiation from 2028 to 2029.
Critics will read “giveaway.” My take: the goal is to protect innovation for rare diseases. This isn’t about Keytruda or Darzalex or Opdivo, but about others in the pipeline that might not happen or might be delayed if this wasn’t implemented.
Do Better. Berkeley Research Group (BRG) estimates that ~$13.4B in 2023 Medicare rebates didn’t materialize because 340B units are excluded from Medicare Part D negotiated rebates (and some Part B inflation rebates). Whether you like the estimate or not, the signal is clear: the rebate system and 340B are talking past each other. From a manufacturer lens, the ask isn’t less support for safety‑net care—it’s not duplicate discounts, clean attribution, and patient‑facing value. Modernizing 340B data would let Medicare capture intended savings without starving hospital finance or penalizing innovation.
Hang On MOOPy, MOOPy Hang On. Earlier this month, Milliman released a paper on the maximum out-of-pocket (MOOP) in Medicare. The title is “MOOP, There it is.” I salute the authors for their silliness. Milliman reports Medicare Part D beneficiaries spent ~$1,200 to reach the $2,000 MOOP in 2025. Confused? You’re not the only one – it’s one of the things I’ve been asked about the most since the report came out.
Beneficiaries are reaching the $2,000 threshold faster than expected. On average, non-low-income beneficiaries are satisfying the MOOP with only $1,220 in actual OOP spending because of the way Medicare allows some supplemental benefit amounts to count toward the cap. In June 2025, nearly 6% of beneficiaries that were non-low income had reached catastrophic coverage (that is, they reached the MOOP, the $2,000 cap.) This is nearly 5x higher than in 2023.
Grain of Salt. Yesterday, ICER (Institute for Clinical and Economic Review) released its first Launch Price & Access report, finding many 2022–2024 launches above its Health Benefit Price Benchmark (HBPB) and tallying ~$1.26–$1.49B in year‑one “above‑benchmark” spend. Useful input—but HBPB is not a full accounting of lifetime value, diagnostic costs avoided, or the value of first‑in‑class science. For therapies in oncology or rare disease, early prices often fund post‑approval evidence and manufacturing scale‑up that bring net prices down over time. And the Inflation Reduction Act included inflation penalties so price increases post-launch are heavily penalized depending on the patient population.
The Doc Will See You Now (in the office.) Telehealth for Medicare beneficiaries is on pause while the federal government shutdown continues.
YOY Yikes. The KFF employer survey is out and, as always, it is a gem of a survey. But the scary highlight this year is that premiums are going up by more than double the rate of inflation this year. Health insurance for a family is $27,000 a year. For a long time, we’ve been saying this is unsustainable and yet, we sustain. Sort of.
Reviewing the Fundamentals – Appreciating the Affordable Care Act
When Dr. Oz said President Trump had a plan to replace the Affordable Care Act, my immediate thought was to call BS. The premise that a vague, middle-ground replacement for the Affordable Care Act (ACA)—or any large-scale healthcare program—can achieve both massive savings and high satisfaction is highly unlikely to materialize. See the above story on KFF and employer premiums. It isn’t my first rodeo. (FWIW, I’ve been to more than a few).
The United States healthcare system is fundamentally structured around complexity and high prices, leaving very little room for simple, compromise-based solutions. Proposals that lack specific mechanisms for how costs will be controlled often fail because they ignore the difficult trade-offs required in a system driven by a multitude of private insurers, large health systems, and entities like hospitals and pharmaceutical companies. Any successful reform must confront this intricate web of vested interests; a politically perilous undertaking that a non-specific plan simply cannot do.
The reality of US healthcare economics suggests that there are no true middle-ground options for achieving the necessary scale of savings. Substantial cost reduction is inseparable from systemic change. The current trajectory of healthcare inflation is driven by system-wide factors: administrative complexity, inflated drug prices, high physician fees, and the widespread practice of fee-for-service payment that incentivizes volume over value. Tinkering with existing programs or offering a replacement that merely shifts subsidies or insurance pools, without fundamentally altering how providers are paid or how drugs are priced, will not bend the cost curve. Genuine savings require a total overhaul of the payment and delivery models, perhaps toward an all-payer rate setting, a single-payer system, or a truly capitated, integrated delivery network—changes that lie far outside the scope of vague, political compromises.
Ultimately, the most challenging truth about saving money in healthcare is that it often requires one of two outcomes: covering less or paying less. Since the latter—forcing providers, hospitals, and pharmaceutical companies to accept less—is politically explosive and met with fierce lobbying, the path of least resistance for cost-cutting often defaults to the former: reducing the generosity of coverage. This means higher deductibles, narrower networks, or excluding certain services for consumers.
The political difficulty of any reform is rooted in this dilemma: any plan that offers real savings must either explicitly tell voters that they will get less access or pay more out-of-pocket, or it must take on the powerful healthcare industry. Therefore, any plan promising massive savings and high-quality, comprehensive coverage without detailing painful structural changes is, by definition, an exercise in wishful thinking.
And yet, a tiny part of me is still hopeful. I must believe there is a better way and through compromise we can get there. Like I said, tiny part.
For the Files
Fingers Crossed. Medicare negotiated prices are going into effect on January 1. The behind-the-scenes process by which this will happen is called Maximum Fair Price Effectuation. Everything you wanted to know is in this paper by USC’s Schaeffer Center. I hope it won’t be a mess, and yet I’m pretty sure it will be.
