Jakob Emerson on Payer Policy Uncertainty and the Shifting Medicare Advantage Market

Summary

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Podcast Summary

Podcast: Becker’s Healthcare Podcast
Episode: Jakob Emerson on Payer Policy Uncertainty and the Shifting Medicare Advantage Market
Date: February 26, 2026
Host: Scott Becker
Guest: Jakob Emerson, Journalist (Payer Policy)

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Episode Overview

This episode centers on the current landscape of U.S. health insurance, focusing specifically on payer policy uncertainty, the shifting Medicare Advantage market, and broader challenges facing the industry. Scott Becker and Jakob Emerson discuss key recent events including policy shifts following President Trump's State of the Union, the state of ACA subsidies, a major Medicare Advantage fraud settlement, and evolving trends among insurers, providers, and government. The tone is candid, analytical, and reflective of ongoing systemic tensions.

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Key Discussion Points & Insights

1. State of the Union Address & Federal Policy Direction

• Minimal Focus on Healthcare in State of the Union:
  • President Trump's first State of the Union in his second term was the longest in history (107 minutes), but healthcare only received about four minutes ([00:54]).
  • “I think that kind of speaks for itself in terms of where the policy focus is for the administration in terms of healthcare right now.” — Jakob Emerson ([00:54])
• Lack of ACA Subsidy Clarity:
  • Current debates over ACA subsidies and coverage are at a standstill.
  • No “clear federal policy direction for the first time in a long time” ([02:15]).
  • “There is nowhere to go really with them at this point. It seems like the marketplace is operating without any clear federal policy direction for the first time in a long time.” — Jakob Emerson ([03:35])

2. Collapse in Exchange Enrollment & Impact on Health Systems

• Projected 20% Drop in Exchange Enrollment:
  • Citing Tenet Healthcare, a 20% drop in ACA exchange enrollment nationally may lead to significant changes in payer mix and increased volume in hospital EDs for basic care ([02:15]).
  • “That's a huge patient population coverage shift... a lot of change to your payer mix and then on the insurer side, a lot less members and overall just a directionless marketplace.” — Jakob Emerson ([03:35])

3. Medicare Advantage Market Shifts

• Big Insurers Deliberately Pare Down Enrollment:
  • Major carriers (United, Aetna, CVS, Elevance, and most Blue Cross conglomerates) have intentionally exited unprofitable Medicare Advantage (MA) markets ([04:51]).
  • Notably, Humana grew substantially, enrolling over a million new members ([05:20]).
  • Smaller, regional, nonprofit, and hospital-owned insurers are booming, with many doubling enrollment ([05:41]).
  • “The small guys, some of the hospital-owned insurers did fantastic.” — Jakob Emerson ([05:47])
• Overall MA Growth & Segment Trends:
  • MA enrollment is now over 55% of Medicare (from 54% last year), though the growth rate has slowed ([06:41]).
  • Growth is concentrated in dual special needs plans (DSNPs) — specialized MA plans for sicker, low-income populations dually eligible for Medicare and Medicaid ([08:29]).
  • “That is the fastest growing portion of Medicare Advantage now across the country for the entire program.” — Jakob Emerson ([08:35])

4. Major Fraud Settlement: Kaiser Permanente

• Record $556 Million Medicare Advantage Fraud Settlement:
  • DOJ settlement with Kaiser for upcoding and inflating risk scores to gain higher payments ([07:10]).
  • Highlights high-quality Medicare Advantage plans also being implicated in government action ([07:35]).
  • “CMS’s highest quality Medicare Advantage plans arguably now having the largest Medicare Advantage fraud settlement.” — Jakob Emerson ([07:54])

5. Broader Payer Policy Uncertainty & Washington Sentiment

• Insurers Losing Political Influence:
  • Observations that “insurers don’t have a lot of friends in Washington right now” despite decades of strong lobbying and alignment ([11:20]).
  • “It’s just a perfect storm right now... ACA falling apart, Medicare Advantage costs going up, all the tensions with providers and going out of network... Everybody is affected by all these insurance issues now.” — Jakob Emerson ([12:26])
  • Even members of Congress are feeling the pain of insurance denials and delays ([12:26]).
• Populist Pushback Against Payers:
  • Previous strength of payer lobby (AHIP) is being challenged by “a populist pushback” ([11:33]).
  • “The congressmen are complaining about health insurance at this point and care delays. It’s affecting everyone. It’s impossible to ignore anymore.” — Jakob Emerson ([12:26])

6. Structural Healthcare Workforce Issues

• Physician & Specialist Shortages:
  • Increasingly hard for consumers (even for connected people like congressmen) to get timely specialist care ([13:23]).
  • “Once you get past the front lines, there’s just a real shortage in lots of specialties, and it’s going to get a lot worse for the next 10 years.” — Scott Becker ([15:03])
• Systemic Challenges Identified:
  • Lack of clear solutions; major issues include payer-provider tension, policy stasis, workforce shortages, and benefit coverage gaps ([14:48]-[15:20]).

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Notable Quotes & Memorable Moments

• On Policy Stagnation:
  “No, no real plan right now from either side... for the hospital systems listening, it's a scary time because...a directionless marketplace as things currently stand.” — Jakob Emerson ([03:35])

• On Shifts in Medicare Advantage:
  “Deliberately, a lot of the big publicly traded guys lost a lot of members for United, up to a million just because of the rising utilization costs and trying to shed some of those unprofitable plans.” — Jakob Emerson ([05:39])

• On Populist Turn Against Payers:
  “For so long AHIP was so strong...now you see a little bit if there’s just a populist pushback against it. It’s fascinating to watch.” — Scott Becker ([11:33])

• Regarding Congress’s New Perspective:
  “The congressmen are complaining about health insurance at this point and care delays. It’s affecting everyone. It’s impossible to ignore anymore.” — Jakob Emerson ([12:26])

• On Workforce & Access Issues:
  “These are really important. Once you get past the front lines, there’s just a real shortage and lots of specialties, and it’s going to get a lot worse for the next 10 years.” — Scott Becker ([15:03])

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Timestamps for Important Segments

• [00:54] — Trump Administration’s State of the Union: Healthcare policy direction
• [02:15] — Banner/Tenet predictions: 20% nationwide exchange enrollment drop
• [03:35] — Effect of policy uncertainty on payers and providers
• [04:51] — Big insurers deliberately scale back Medicare Advantage
• [05:20] — Humana’s unique growth; smaller, regional payers booming
• [06:41] — Current Medicare Advantage penetration (55%), slower overall growth but surge in DSNPs
• [07:10] — Kaiser Permanente/DOJ: $556 million Medicare Advantage fraud settlement
• [08:29] — Surge in dual special needs plans (chronically ill/low-income)
• [09:54] — Enhanced benefits for most vulnerable MA populations
• [11:20] — Insurers’ eroding political clout; Congress now adversarial
• [12:26] — “Perfect storm” of negative trends and congressional complaints
• [13:23] — Specialist shortages now hitting even well-connected policymakers
• [15:03] — Discussion on depth of specialist shortage and systemic undersupply

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Conclusion

Jakob Emerson and Scott Becker provide a timely, in-depth discussion of the payer landscape, highlighting the interplay of policy uncertainty, market shifts, and systemic challenges. The dialogue underscores the lack of federal direction, volatility in Medicare Advantage, a growing populist backlash against large insurers, and a deepening healthcare workforce crisis. The episode offers clarity and context for healthcare leaders navigating a rapidly changing environment, concluding on the sobering note that while problems abound, concrete solutions remain elusive.

Transcript

[A]

This is where health insurance leadership comes together. Becker's 4th Annual Spring Payer Issues Roundtable brings together over 400 payer and health plan executives and more than 100 speakers to Chicago, April 13th and 14th. This year's event includes keynote conversations with the industry's top leaders and former President George W. Bush. For the full agenda and event details, visit Beckershospitalreview.com and click on the Events

[B]

tab in the upper right.

[A]

We're looking forward to hosting you here in Chicago.

[C]

This is Scott Becker with the Becker's Healthcare Podcast. Thrilled today to be visiting with brilliant journalist Jacob Emerson. Jacob follows the pear area and what's going on in the peer world. Jacob, tell us what's going on currently. What are the big stories you're watching in the payer universe Currently?

[B]

Yeah. Hey Scott, good to talk with you. So last night we had the State of the Union with President Donald Trump, the first one of his second administration. And healthcare was a topic during the speech, longest speech in history in terms of State of the unions, 107 minutes and healthcare got about four minutes of that. So I think that kind of speaks for itself in terms of where the policy focus is for the administration in terms of healthcare right now. And I can dig into that a bit in terms of some of the lack of details we have around specific things like ACA subsidies. Moving forward.

[C]

We would love you to, we would love you to tell, tell us what's going on there. I know that like I was on the, on the podcast yesterday with leader of Banner Health, leader of, of Honest Health and basically saying in terms of value based care, they're gonna have several hundred thousand people in the state of Arizona coming off of health insurance. So they've got to make sure they can take care of those people as well as possible and as efficiently as possible because there will be, there'll be not only no margin, probably no reimbursement for a lot of those people. It plays right into this discussion, but it's a brilliant discussion about value based care and how important it is, particularly in the areas we got to take care of people who don't pay. And you have to make sure they're still taken care of really well, but efficiently. But yeah. So tell us what you heard coming out of the State of the Union.

[B]

Yeah, and it's interesting you talk about what Banner told you, Scott, because we heard, I believe it was last week from Tennant Healthcare executives projecting a 20% drop in exchange enrollment nationally. And last year There was about 24 million people a Little more than that enrolled in the exchange plans. So a 20% drop, that's, you know, that's a huge patient population coverage shift for a payer mix shift for health systems all over the country, a volume shift, more people going to the ED for basic care. So huge on that front alone. But in terms of the President's speech, he definitely used the address to criticize the aca. Nothing new for the President but calling it the Unaffordable Care act and basically reiterating some of the, I don't know if I want to say their policy proposals, but some of the ideas that he and some Republicans have been pushing forward last year a little bit early this year as some of the talks over the enhanced subsidies continued, which is basically going against the insurers completely, really just talking trash about the insurance companies and proposing having funds instead of subsidies, having funds go straight to Americans. A lot of Republicans supporting the idea of that being through HSAs, which as we know it's not really a replacement for a health insurance plan funding an HSA just because HSA funds can't be used to pay insurance premiums. And you know, funding HSA, let's say like $2,000, that doesn't really get you anywhere in terms of premiums that can cost you twenty plus thousand dollars annually every year. So that's kind of where things are at with that. But I think overall it's, we're operating in a space now where the marketplace, now that these, these talks around the subsidies have completely fallen apart. There is no where to go really with them at this point. It seems like the marketplace is operating without any clear federal policy direction for the first time in a long time. So no, no real plan right now from either side ideas like I just mentioned, but no votes, no details, no implementation path. So you know, for the, for the hospital systems listening, it's, it's a scary time because you've got, According to tenant, 20% less exchange enrollees and you know, a lot of change to your payer mix and then on the insurer side, a lot less members and overall just a directionless marketplace as things currently stand.

[C]

Right. And you do see some of the big insurers paring down their Medicare Advantage marketing and populations in areas that they're serving. Is that right?

[B]

It is correct. And a lot of it was very deliberate. Basically they got too big and we're really talking about the national carriers and I put an asterisk there because there were some exceptions that we saw in some of the most recent enrollment data. During the annual enrollment period just wrapped up last fall. But yes, United, Aetna, cvs, Elevance, and then some of the big Blue Cross conglomerates besides Elevance, all seen really big reductions in MA disenrollment. And again, a lot of that was very deliberate. But I thought what was really interesting is Humana actually enrolled over a million people just this past fall. So Humana kind of bucking the trend of the national publicly traded insurers. And then what we really saw in the enrollment data was the startup, the smaller insurers, the nonprofits, some of the Blue Cross plans, plans that have a very special focus. They focus in one region or they focus on a specific population. For Medicare, they boomed. We saw plans double their enrollment in already having in the hundreds of thousands of members. So we're actually speaking with insurers about that this week. But it was a definitely noticeable trend that the small guys, some of the hospital owned insurers did fantastic. And then deliberately, a lot of the big publicly traded guys lost a lot of members for United, up to a million just because of the rising utilization costs and trying to shed some of those unprofitable plants.

[C]

Right. I mean, they truly tried to move out of those markets because they're not making money, those markets, and they'd rather not do it. Where does that leave us in terms of Medicare Advantage? Is it still last year, I think it ended up up 54% of Medicare. Where is that currently at? Do we have a sense of that or not? Exactly.

[B]

As it stands now, it's at over 55%. It slowed. The enrollment rate itself actually slowed during this past annual enrollment. We're in open enrollment, so there's still people enrolling, but for new enrollees, that was happening this past fall and the rate did slow. I think though, Scott, one story I did want to mention that contextually is a part of all of this and it's just it, it, it's massive is it's the largest Medicare Advantage fraud settlement to date with Kaiser Permanente and that happened in January between them and the DOJ $556 million settlement to resolve allegations from the government that basically the health system gamed the MA payment system by doing the upcoding that we've heard about in the headlines for over a decade now. But basically inflating patient diagnosis codes to get higher, higher payments from the government and alleged. But it's a, it's a big scheme. A lot of details that the DOJ alleged in, in their release about this. And again, it's a record fraud settlement, which I just think is interesting even just from the fact that Kaiser often has some of the highest quality rated Medicare Advantage plans in the country in some of their markets. They get five out of five stars in some of their markets with CMS. So CMS's highest quality Medicare Advantage plans arguably now having the largest Medicare Advantage fraud settlement. So, you know, I, I would let the listeners, you know, come to their own conclusions about that, but I just think that's a very interesting contrast in terms of recent developments.

[C]

No, it's, that's a fascinating. You've got some actually moving in the right direction, some moving in the wrong direction. Even though the growth is slow to Medicare Advantage, it's still up to 55% as opposed to retrenching. That's fascinating too, isn't it?

[B]

Yeah, definitely. And where we saw most of the growth, majority of the growth was not in traditional Medicare Advantage with healthy seniors. It was in dual special needs plans, special special Medicare Advantage plans that take care of very sick, chronic, chronically sick populations or people who are dually eligible for Medicaid and Medicare. So really, really low income seniors. That is where that is the fastest growing portion of Medicare Advantage now across the country for the entire program. And that's what drove most of the growth this last fall as well. So not normal MA anymore.

[C]

And who are the payers that specialize in that market? Are there peers that really specialize there?

[B]

Honestly, they all have business lines in this market because it's growing so fast and it's really. Scott, it's grown. I'd say in the last two, three, four years is where we've really started to see resources invested in this space and, and then the, the corresponding enrollment. A lot, a lot of the reasons because you get higher reimbursements for taking care of sicker populations, especially when they're dually eligible for Medicaid.

[C]

Right. And I was, that was the next question I was going to ask you. Is there higher reimbursement because they're more, more sick and thus payers are still making money off it? So that part of the market grows. It's fascinating how it works, how things really do follow the money. And I don't mean bad way or good way, just an observational way.

[B]

Yeah, definitely. But I think some would argue that now these individuals, pretty vulnerable populations are now getting health benefits that are a lot more comprehensive than just traditional Medicaid. Traditional Medicare, which, you know, doesn't really cover much on the Medicare side, much of anything beyond just you know, the hospital stays and stuff like that. You know, now they're getting at least dental benefits, hearing benefits, things like that. So some could argue, you know, the growth here is a good thing because it's getting better benefits for some of these more vulnerable populations.

[C]

100%. I mean those are the people that need it the most. And if you can manage it efficiently, get them some extra benefits. God bless. What a fascinating thing to watch. I mean, well, you sort of have a little bit of a government policy that's all over the board, not very clear. You do have Medicare Advantage manage growing in certain segments even though the big traditional MA is slowing down some and some of the big players have moved out of it. It's a lot to digest there, isn't it?

[B]

It is. And like connected to, you know, some of the, the tensions we've seen with the health systems and ma. They use that as kind of a marketing piece to tell people, well, if you come into our MA plan that we own, you're not going to go out of network like you would with some of the big guys are always in danger of that. So it kind of all works together what we saw. But, but like I said, the smaller guys, the hospital owned, insurers with ma, they did really well this past year and that's what they told us they were, they were hoping to do.

[C]

Absolutely fascinating. Jacob, anything else you wanted to share today?

[B]

No, I don't, I don't think so. I mean the president's speech also touched a little bit on Trump Rx. We've covered that pretty extensively on the websites with Beckers. And then, you know, I think just overall insurers don't have a lot of friends in Washington right now.

[C]

Yeah. Tell us. And that's unusual because for 30, 40 years they've had an insane amount of friends in Washington partly because of so much lobbying in Washington and a general bent to turn over a lot of government healthcare to have it managed for the payers. And that seems like it's not going as well as people expected. Certainly it's become very expensive. Lots of concerns about denials and pre auth all the things that you need the payers to do to try and manage cost but that the population actually just hates. And so what a fascinating, what a fascinating situation where that's going sort of, you know, for so long AHIP was so strong, you know, in a great job advocating for their members, the big payers. They were so strong in Washington, both sides of the island. Now you see a little bit if there's just a populist pushback against it. It's fascinating to watch.

[B]

Yeah. And I think it's also, it's just a perfect storm right now, Scott, in terms of the economics of all this with the Medicaid cuts coming down the line, the fact that employers are facing just huge costs right now with self insured plans because of just rising costs overall, all with healthcare, but also the glp. One factor that's rising care costs with everybody ACA falling apart, Medicare Advantage costs going up, all the tensions with providers and going out of network. So I think everybody is affected by all these insurance issues now, whereas maybe in the past it was just certain segments, certain populations. And then during these hearings with the insurance CEOs, last month you had congressmen complaining to the CEOs talking about I couldn't get this prescription of mine covered by, by my health plan through you. I couldn't get this prior authorization approved. The congressmen are complaining about health insurance at this point and care delays. It's affecting everyone. It's impossible to ignore anymore. And I think that's why we're seeing there's very little friends.

[C]

But I think that's fascinating because at the end of the day there's two different things here that you mentioned right there. One is we always thought Congress was somewhat immune to this because the rest of us see this as consumers. The challenge, getting the access we need. But even those with better access that know everybody, there's just a shortage of physicians and caregivers. So as much as you know, you know, the CEO of this, you know, CEO of this, it's still hard to get the right oncologist when you the right oncologist, right whoever when you need the right whoever. It's just, it's just getting more challenging. I mean the flip side is you could point the fingers at the insurers, but this is completely a problem that D.C. created by turning over so much of the federal government spend and Medicaid spend through the payers. And it's, it arguably caused a lot of hyperinflation in health care. And no one, at least none of them are focused on the real issue. The congressman yelling at AHIP members will AHIP members have funded the congressmen and they've had this mutual sort of love for each other is literally the height of political theater in some ways. And instead of complaining about the insurance companies trying to solve problems like how do we end up with more specialists, more doctors, more primary care, how do we end up actually solving the problem versus just political theater, which is yelling at the payers. You say it right. The payers don't have a lot of friends in Washington, but even the Washingtonians don't seem to be really focused on solving the problem. They're just grandstanding, from what I could tell. And it is what it is.

[B]

Yeah. I think you talk to any of our audience, the people we interview, it's a mess. And nobody really seems to know how to solve the problem. Nobody knows what to tackle first because it's just this giant, messy web. So, yeah, yeah, it is what it is.

[C]

But we need more doctors and nurses particularly, and more specialists and everything. I mean, you look at the benches for oncology, the benches for some of these specialties. These are really important. Once you get past the front lines, there's just a real shortage and lots of specialties, and it's going to get a lot worse for the next 10 years.

[B]

Yeah.

[C]

So, no, I agree with you. People don't know where to start, but we could tell more. You think they should start, but it is what it is. Jacob, as always, fantastic to visit with you. I always learn something. It's my favorite, favorite podcast of the week where I get to visit with you and learn something. Thank you for joining us on the Backers Healthcare podcast.

[B]

I appreciate that. It's good to talk with you, Scott.