When the FDA was deciding whether to approve the drug Tavneos several years ago to treat a set of rare autoimmune diseases, agency experts argued that would be a mistake, according to FDA records.

One problem cited: The manufacturer had provided only “limited safety data.”

As it often does, the FDA in 2021 approved the drug with a proviso: It required the manufacturer to conduct an additional years-long safety study once the drug was on the market.

Today, like many similar “postmarket” studies mandated by the FDA, that additional study is delayed, according to a federal database. As of last fall, only 21 of the planned 300 patients had been enrolled, the FDA said in an April letter and regulatory posting.

Meanwhile, the FDA has identified dozens of cases of liver damage “possibly” or “probably causally associated” with the drug. That was one of the potential side effects the postmarket study was meant to evaluate.

Tavneos illustrates the perils of the FDA’s approach to many drugs and medical devices — and the frequent lapses in follow-through.

A KFF Health News analysis of Food and Drug Administration data found hundreds of postmarket studies listed as delayed. In some cases, the work was delayed by more than a decade or the manufacturer was still developing a plan for the study.

As a result of delays, patients, doctors, and others could be left in a fog about the risks and benefits of the drugs or devices, even as they stake their money, their health, or their lives on the products.

Postmarket study requirements “have often proven toothless,” said cardiologist Sanket Dhruva, an associate professor of medicine at the University of California-San Francisco who has published related research.

The FDA’s reliance on postmarket studies reflects a balancing act.

Making new treatments available faster can save or improve lives, especially when patients with grim prognoses and no good options have little to lose. The full risks and benefits may be revealed only over the long term, and when therapies are used by far more people than even large clinical trials enroll.

But relying on post-approval studies to resolve questions risks exposing patients to products that do more harm than good. Whoever is paying the bills — patients, insurance companies, employers, or government health programs such as Medicare and Medicaid — can end up wasting money and rewarding manufacturers for useless or risky products.

“Doctors rely on this evidence, patients rely on this evidence, and if that evidence is not there, it’s going to lead to a lot of uncertainty,” Dhruva said.

Trump administration policy changes designed to hasten drugs through FDA review could leave more riding on postmarket studies, medical researchers say.

For example, in February, FDA leaders announced that “the default requirement” for agency approvals will be one clinical trial instead of two.

Reducing pre-approval testing “will inevitably put a lot of pressure on the post-approval system,” said Aaron Kesselheim, a professor at Harvard Medical School who has analyzed postmarket studies.

FDA officials said the new policy would “substantially reduce costs” for manufacturers and “speed drugs to market.” Writing in The New England Journal of Medicine, they denied the change would compromise safety or efficacy, saying that “erroneous conclusions may be reached even with two, three, or four studies.”

In response to questions for this article, a spokesperson for the Department of Health and Human Services, which includes the FDA, said postmarket studies can experience delays for legitimate reasons. “Assessing the significance of any delay requires a case-specific review,” said the spokesperson, Emily Hilliard.

The fact that a study is delayed “should not be treated as evidence that a product has an unresolved safety or effectiveness issue,” Hilliard said.

Amgen, the company that makes Tavneos, is still working on the postmarket research the FDA mandated, company spokesperson Alison Chartan said, adding, “We remain committed to completing this important study.”

Amgen’s headquarters in Thousand Oaks, California, in May 2023. (Mario Tama/Getty Images)

Behind Schedule

An FDA database downloaded by KFF Health News in August tracks the progress of postmarket studies that makers of drugs or biologics — such as vaccines and gene therapies — were required to perform or promised to perform.

The database showed almost 600 were running behind schedule.

Of those, more than 250 originally had final reports due before July 31, 2026 — the date that, according to an FDA webpage, the database last had been updated.

About a third of ongoing studies were listed as delayed.

In some cases, the FDA has granted extensions. In others, it has denied them. And in rare instances, the products were discontinued before the studies ran their course.

Postmarket studies can involve clinical trials or other analyses of patient data. They can look at safety or efficacy. A product can be the subject of more than one postmarket study.

The nearly 600 delayed studies involved almost 350 products, KFF Health News found.

The FDA has defined delayed as behind the original schedule. That can mean off track or overdue.

As of August, other FDA databases tracking medical devices listed dozens of postmarket studies as behind schedule.

Products included:

The CustomFlex Artificial Iris, a prosthesis implanted in the eye in place of damaged, defective, or congenitally missing irises. The protocol for a study in children was accepted in 2019, the database said. The study was meant to follow patients for five years. According to an FDA page downloaded in August, zero patients were enrolled.

Barbara Fant of Clinical Research Consultants, to whom the FDA’s 2018 letter approving the product was addressed, said the rarity of an eye disease called aniridia poses challenges for post-approval studies. The German manufacturer, the U.S. distributor, and Clinical Research Consultants are working with the FDA to identify alternative ways to fulfill the postmarket requirements, Fant said.

“Confirming the long-term safety of the device remains a top priority for both the study team and FDA,” Fant said.

Paxlovid, a treatment for covid. A study to assess its safety in pregnant women was originally to be completed by the end of 2024, the FDA database said. “The trial completion and final report milestones were missed,” the database said.

Pfizer, the manufacturer, is working with the FDA and remains committed to “submitting results as soon as practicable,” Pfizer spokesperson Jerica Pitts said.

The Scandinavian Total Ankle Replacement system. The device and the original protocol for the clinical trial were approved in 2009. The study was meant to include a minimum of 500 subjects, the database said, but the actual number enrolled was 142. Almost half those patients had one or more adverse events, with dozens of “reoperations,” “revisions,” or “removals,” the database said.

Rachel Colloff and Cristina Pasquino — spokespeople for Enovis, which markets STAR Ankle — did not respond to multiple inquiries. Jenny Braga, a spokesperson for Stryker, which previously sold the product, did not answer questions about the postmarket study.

Oxaydo (originally named Oxecta), a form of the potentially addictive opioid painkiller oxycodone touted as designed to deter abuse. When the FDA approved it in 2011, it required the manufacturer, part of Pfizer, to conduct a postmarket study to assess whether it reduces “misuse and abuse, and their consequences: overdose, death and addiction.” The final report was originally scheduled to be submitted in 2016.

The FDA database listing the study as delayed said the agency “issued a failure to respond letter” in 2022.

Today the issue may be all but moot.  

Control of the product passed from company to company over the years until 2023, when Acura Pharmaceuticals said in a Securities and Exchange Commission filing that patents on Oxaydo would begin expiring that year and it didn’t intend to continue marketing the drug.

According to another FDA database, Oxaydo has been discontinued.

The FDA has enforcement powers and uses them “where appropriate,” HHS’ Hilliard said. She did not provide requested details, and she did not answer questions about the studies listed above.

Delay Can Pay

For manufacturers, delay can pay, Harvard’s Kesselheim said. While postmarket studies are ongoing, companies can continue to sell the products.

“Medicare and Medicaid spent more than $18 billion from 2018 to 2021 for accelerated approval drugs with incomplete confirmatory trials past their original planned completion dates,” the HHS Office of Inspector General estimated in 2022.

The FDA can demand postmarket studies for a variety of reasons, including to address concerns that arise after a product has been approved. Some look at uses not covered by the original approval, and some are meant to shed light on serious risks that are already known.

In April, when it approved Foundayo, a weight loss drug made by Eli Lilly, the FDA required the company to conduct additional research to assess a variety of concerns, including “retained gastric contents,” “major adverse cardiovascular events,” and “drug-induced liver injury,” as well as effects of exposure during pregnancy, such as “major congenital malformations,” “spontaneous abortions,” and “stillbirths.”

The FDA said it approved the drug under the new Commissioner’s National Priority Voucher program, intended for products that “address critical national health priorities.” The program strives for an “ultra-fast” review, the FDA has said — one to two months, instead of six months or more with other expedited pathways.

“Postmarketing requirements and enhanced safety monitoring are a routine part of the FDA’s approach to evaluating newly approved medicines,” Eli Lilly spokesperson Kristiane Silva Bello said, “including ongoing monitoring in areas identified during clinical development.”

‘False Hope’

The FDA waded into a world of uncertainty in 2016 when it granted accelerated approval to a drug for Duchenne muscular dystrophy, a degenerative disease that primarily affects boys, disabling them at a young age and ultimately killing them.

Agency scientists had found that the drug, Exondys 51, was unproven and argued against greenlighting it.

Ellis Unger, then a senior drug evaluation official at the FDA, wrote in an internal memo that “thousands of patients and their families would be given false hope in exchange for hardship and risk.”

The manufacturer, Sarepta Therapeutics, conceded the uncertainty. “A clinical benefit of EXONDYS 51 has not been established,” it said when the drug, also known by the generic name eteplirsen, was approved.

The drug, the first FDA-approved treatment for Duchenne muscular dystrophy, targeted a subset of patients with the disease.

The FDA required Sarepta to conduct further studies and warned that it could withdraw approval if postmarket trials failed to verify a clinical benefit or were “not conducted with due diligence.”

Unger issued a warning of his own: “FDA has not succeeded in withdrawing the marketing of a single drug for lack of verification of clinical benefit following accelerated approval. The reality is that if eteplirsen is given accelerated approval, it is highly likely to remain on the market indefinitely, irrespective of whether or not efficacy is verified.”

Sarepta was originally required to submit a final report on a postmarket study by a May 2021 deadline, according to an FDA database and a 2016 FDA letter to the company.

Almost a decade after the drug was approved, and more than five years after that deadline, the study was listed in an FDA database as delayed.

“The final report milestone was missed, because the sponsor requested milestone extensions due to study delays,”  the database said.

Meanwhile, in 2022 the website Pharmaceutical Technology ranked Exondys 51 as the second-most expensive drug in the U.S., at an annual cost of $750,000 to $1.5 million.

Last year, the drug generated $538 million in sales for Sarepta, according to a company presentation to investors.

Sarepta found it difficult to recruit patients for the postmarket clinical trial, company spokesperson Tracy Sorrentino said. The target population is small, patients were hesitant to enroll, and Sarepta was competing with other clinical trials for participants, Sorrentino said.

The study has been fully enrolled since 2023, Sorrentino said, and the company plans to provide an initial look at the data late this year.

‘Manipulated’

Amgen is the maker of the drug Tavneos. (Hannah Yoon/Bloomberg via Getty Images)

Amgen has cited similar challenges, even as Tavneos generated $459 million in global sales last year.

When an approved treatment is available, patients may be reluctant to enroll in a study in which they could be given a placebo, Amgen’s Chartan said.

The clinical trial was originally supposed to be done by the end of 2030. As of July 24, just 49 patients had been enrolled, Chartan said.

The FDA has said the study was to include 300 patients, and each patient enrolled must be followed for five years, said Hilliard, the HHS spokesperson.

Tavneos was approved to treat severe cases of a group of diseases — known by the shorthand ANCA-associated vasculitis — in which, as the Cleveland Clinic explains, the immune system inflicts potentially fatal damage on blood vessels and organs. 

“As of January 2026, estimated real-world exposure” to Tavneos “exceeds 25,000 patient-years globally, consisting of over 6,500 in the United States and 19,000 abroad,” Amgen has said. (For context, one patient taking a drug for five years would amount to five “patient-years.”)

A clinical trial sponsored by ChemoCentryx to secure approval of Tavneos failed to prove it was effective, the FDA now alleges. Instead of disclosing that outcome to the FDA, company personnel “manipulated” the results, the FDA alleged in an April letter to Amgen.

Amgen, the parent company of ChemoCentryx, has denied the results were manipulated and has said the data “remain valid.”

Nonetheless, the European Union recently revoked its approval of Tavneos.

The FDA is trying to pull Tavneos from the market, and Amgen is fighting that effort.

The company has a lot riding on the outcome. Tavneos can cost more than $220,000 per year, according to the drug discount website GoodRx, and when Amgen acquired ChemoCentryx in 2022 for $3.7 billion, Tavneos was the only drug ChemoCentryx had brought to market.

In a June letter to the FDA, Amgen said the benefits of Tavneos outweigh the risks.

The FDA disagrees.

The FDA “can no longer conclude that there is, or has ever been, a valid demonstration of substantial evidence of effectiveness for TAVNEOS,” the agency wrote.

Citing 76 cases of DILI — drug-induced liver injury — the agency said it was “increasingly concerned about the safety profile of TAVNEOS.” Without proof of effectiveness, at least for its approved use, “the drug’s benefits cannot outweigh its known risks,” the FDA wrote.

Data reporter Maia Rosenfeld contributed to this report.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The Host Julie Rovner KFF Health News @jrovner @julierovner.bsky.social Read Julie's stories. Julie Rovner is chief Washington correspondent and host of KFF Health News’ weekly health policy news podcast, "What the Health?" A noted expert on health policy issues, Julie is the author of the critically praised reference book "Health Care Politics and Policy A to Z," now in its third edition.

Reports from a top artificial intelligence company that it stopped several attempted uses of its product that could assist in manufacturing a bioweapon caught the attention of lawmakers in Washington this week. But it is still unclear whether or when Congress will act to regulate the fast-moving industry — and the House has left town until after Election Day.

Meanwhile, with many voters expressing anger over the rising cost of healthcare, President Donald Trump is proposing to send $500 checks to some people enrolled in Affordable Care Act insurance plans before the election. But even if those checks materialize, in most cases they will be smaller than the increases many policyholders have already seen.

This week’s panelists are Julie Rovner of KFF Health News, Anna Edney of Bloomberg News, Tami Luhby of CNN, and Alice Miranda Ollstein of Politico.

Panelists Anna Edney Bloomberg News @annaedney @annaedney.bsky.social Read Anna's stories. Tami Luhby CNN @Luhby Read Tami's stories. Alice Miranda Ollstein Politico @AliceOllstein @alicemiranda.bsky.social Read Alice's stories.

Among the takeaways from this week’s episode:

• Anxieties about AI reached a fever pitch this week, with a few leading developers calling to slow the pace of innovation amid troubling reports about AI’s progress and use, including reported attempts to misuse AI for biological warfare. Meanwhile, the Trump administration is pressing to incorporate AI into healthcare.
• Federal lawmakers are exploring changes to the independent arbitration system created by the No Surprises Act, which took effect in 2022. While the law has cut down on patient exposure to surprise out-of-network medical bills in emergencies, the system has resulted in far larger paydays than anticipated for many doctors — which, in turn, has prompted a sizable increase in coverage costs, including for employers.
• Some cities and states are suing to block implementation of the latest public charge rules from the Trump administration, arguing they could have a chilling effect for some who are entitled to public benefits, such as the eligible children of immigrants. They allege that could leave cities and states on the hook and harm local economies.
• Abortion opponents are claiming victory as the Environmental Protection Agency moves to test water for remnants of abortion pills, among other chemicals and drugs. California’s attorney general is wrapping up a lawsuit against two nonprofits offering what they describe as abortion pill reversals, despite a lack of evidence the method works or is safe. And the family of a Texas woman who died after being denied an abortion is suing her doctors and the state’s attorney general, Ken Paxton.

Also this week, Rovner interviews Sabrina Corlette of the Georgetown University Center for Health Insurance Reforms, discussing some potential short-term fixes to the nation’s health system.

Plus, for “extra credit” the panelists suggest health policy stories they read this week that they think you should read, too: 

Julie Rovner: KJZZ Phoenix’s “Data Shows DES Failed To Complete Most SNAP Eligibility Interviews, Resulting in Massive Cuts,” by Camryn Sanchez.

Tami Luhby: The Washington Post’s “What ‘Ferritin Face’ Means — And How To Tell If You May Be Iron-Deficient,” by Erica Sloan.  

Anna Edney: Bloomberg News’ “Patients Who Fight Health Insurance Denials Often Win,” by John Tozzi, Tanaz Meghjani, and Ike Swetlitz.

Alice Miranda Ollstein: KFF Health News’ “Indigenous Groups Are Exempt From Medicaid Work Rules, but Native Hawaiians Aren’t,” by Ashley Mizuo.

Also mentioned in this week’s podcast:

• Science’s “‘Chilling’ Warning or Overreaction? AI Bioweapons Report Divides Experts,” by Jocelyn Kaiser.
• The New York Times’ “U.S. Health Officials Move Quickly To Deploy Medical A.I. Despite Concerns,” by Christina Jewett.
• Roll Call’s “Surprise Billing Dispute Process In ‘Crisis,’ Groups Say,” by Ariel Cohen.
• KFF Health News’ “A Generation of Kids Suffer as Trump Destabilizes Immigrant Families,” by Claudia Boyd-Barrett.
• Politico’s “Abortion Opponents Claim ‘Tremendous Victory’ as EPA Tests Water for Abortion Pills,” by Miranda Willson, Alice Miranda Ollstein, Ariel Wittenberg.
• Politico’s “Free Speech or False Advertising? California Judge To Rule on ‘Abortion Pill Reversal’ Claims,” by Rachel Bluth and Alice Miranda Ollstein.

Credits Francis Ying Audio producer Emmarie Huetteman Editor

Click here to find all our podcasts.

And subscribe to “What the Health? From KFF Health News” on Apple Podcasts, Spotify, the NPR app, YouTube, Pocket Casts, or wherever you listen to podcasts.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

The scenario often unfolds like this: Medical researchers investigate a frequently used drug and report that it’s less effective for older patients than previously thought, or that its risks outweigh its benefits in older adults. More studies follow, confirming those findings.

After a few years, medical associations revise their guidelines, warning that the drug in question should be avoided or at least prescribed more selectively. It might be added to the Beers Criteria, an influential list of potentially inappropriate medications for older patients, published by the American Geriatrics Society.

If the drug’s role is preventive, the U.S. Preventive Services Task Force, an independent expert panel, may weigh in with cautions. The FDA may issue “black box” warnings about concerning side effects.

After a few more years, researchers look at broad national data to see whether use of this drug declined. Often, the answer is: Yes, but not enough. Sometimes, though, use didn’t decline much at all or actually increased.

“Medications are like barnacles,” said Michael Steinman, a geriatrician at the University of California-San Francisco and co-director of the U.S. Deprescribing Research Network. “They’re easy to start, but they can be hard to stop.”

This medical inertia partly reflects the time lag involved in disseminating findings. “Clinicians have a million things they need to know and attend to, and information may take a while to get to them,” Steinman said.

But it also reflects the way “clinicians and patients get used to treating conditions in certain ways,” he said. “They become ingrained habits.” Finding alternative approaches is challenging, so “it’s easy to go with what you know.”

Recent studies of three medications or classes of drugs widely used among older Americans illustrate the problem.

The Drawbacks of Benzodiazepines

Scientists began raising alarms about benzodiazepines more than 20 years ago. Prescribed for insomnia and anxiety, “they offer prompt relief,” said Mark Olfson, a psychiatrist and epidemiologist at Columbia University.

The problem? Benzodiazepines (including Valium, Xanax, and Ativan) and the related “Z” drugs (Ambien, Lunesta) “may impair balance, coordination, and cognition that can translate into falls and fractures and motor vehicle accidents,” Olfson said. In patients also taking opioids for pain, benzodiazepines can cause overdoses.

Moreover, “once you’ve taken them for a period of time, you develop a dependence,” Olfson added. “When you come off them, you may develop withdrawal symptoms.”

So what’s happened to benzo use among older adults, who are more sensitive to these effects? In a recent examination of prescribing trends, published in the Annals of Internal Medicine, Olfson and his team reported progress. Among people 65 and older, the rate of patients filling prescriptions for benzos dropped to 11.5% in 2024, from about 14% in 2015.

But that decline has stalled since 2020, perhaps related to the covid-19 pandemic. Moreover, prescribed use actually rose among those over 75, from 12% in 2020 to about 13% four years later. Dispensing through pharmacies in long-term care facilities more than doubled. And about a third of users were taking the drug for longer than six months, increasing the likelihood of dependence. “It’s worrisome,” Olfson said.

But he cautioned that patients shouldn’t stop benzodiazepines suddenly or on their own, which can provoke withdrawal. “It requires supervised tapering” with a medical professional, he said. “It takes many weeks.”

Overprescribing Antibiotics

For years, the standard treatment for diverticulitis, the inflammation or infection of small pouches that form in the colon, was antibiotics, primarily fluoroquinolones (like Cipro and Levaquin) or amoxicillin-clavulanate (Augmentin).

“It was unquestioned,” said Jesse Sutton, a pharmacist and researcher at the Minneapolis Veterans Affairs healthcare system. “Antibiotics are safe and effective, great, lifesaving drugs, so the mindset was: When in doubt, use them.”

But in 2015, the American Gastroenterological Association recommended against routinely prescribing antibiotics for “uncomplicated” diverticulitis, which represents a great majority of cases. Other medical groups followed suit.

Clinical trials had shown that, for this condition, antibiotics had little or no effect on mortality, the need for surgery, complications, or recurrences. “They hadn’t improved anything,” Sutton said.

And as with any drug, “there are downsides, unintended consequences,” he said. “Side effects from antibiotics account for a substantial amount of emergency room visits” for symptoms like nausea, vomiting, and diarrhea. Antibiotics heighten the risk of the virulent C. difficile infection, too.

Plus, “the more you use antibiotics, the less they work in the future,” Sutton said. The World Health Organization has deemed antimicrobial resistance “a major global health threat.”

So Sutton and his colleagues, studying treatment in 70,000 visits to 120 VA facilities, expected to see antibiotic use for uncomplicated diverticulitis decline over 10 years.

Instead, they reported recently in the Annals of Internal Medicine that antibiotic prescriptions remained nearly universal at 97% of visits, guidelines or no guidelines. The patients would most likely have done as well with a few days of Tylenol and a clear liquid diet.

Antibiotic overuse remains common for other conditions of later life, too, including the kind of urinary tract infections that cause no troublesome symptoms and upper respiratory infections that are typically viral, not bacterial.

In such cases, when a doctor prescribes an antibiotic, “I’d encourage patients to say, ‘Please explain the rationale for doing this,’” Sutton said. “If they don’t, it’s OK to press pause.”

When Aspirin Isn’t the Answer

Aspirin is different. Because it’s cheap and sold over the counter, anybody can start taking it on their own — and millions of older Americans do, thinking it will help prevent cardiac problems.

For people who’ve already had a heart attack, stroke, or cardiac intervention like a stent or bypass surgery, daily low-dose aspirin for “secondary prevention” does lower the odds of another event, studies have demonstrated.

But for “primary prevention” in people who haven’t had one, the guidelines changed in 2019, when the American College of Cardiology and the American Heart Association recommended against aspirin for this purpose in those 70 or older. The U.S. Preventive Services Task Force went further, warning against aspirin for primary prevention starting at age 60.

Large clinical trials had shown scant benefit for aspirin as a primary prevention measure, but there were harms, notably gastrointestinal bleeding. “As we age, the risks of bleeding go up,” said Timothy Anderson, an internist at the University of Pittsburgh who co-directs its Prescribing Wisely Lab. More rarely, but more seriously, aspirin can cause bleeding in the brain.

In a JAMA study published last year, Anderson and his co-author found the message was getting through: Aspirin use for primary prevention, as reported in the National Health and Nutrition Examination Survey, had dropped substantially from 2011 to 2023. But more than a third of those 70 or older were still taking it.

Some caveats: A subgroup of older adults with high risk factors for cardiovascular disease may benefit from aspirin for primary prevention. And, confusingly, some evidence suggests that older patients already taking aspirin face a higher risk of cardiovascular disease if they discontinue it.

“Step 1 is a conversation with your primary care physician” about aspirin, Anderson said. “‘Is this still right for me as I get older?’”

Older patients taking aspirin, many without any medical guidance, “are interested in reducing their risk of heart attack and stroke,” he said. “They’re trying to be proactive and healthy.” But with blood pressure medications and statins for cholesterol, “we have better strategies than aspirin for that.”

The New Old Age is produced through a partnership with The New York Times.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

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When Josh Fleig, Louisiana’s chief innovation officer, learned his state had set aside $20 million a year, for five years, to invest in startup rural health companies, his reaction was not surprising: “Wow!”

In rural America, where people are often reported to be sicker with poor access to healthcare, the cash influx is a relief. In the economic development space where Fleig operates, it’s an opportunity.

“Look, that’s a lot of money for what we do,” said Fleig, whose state-funded economic development office invests in corporate launches, ranging from software startups to shipbuilders.

Josh Fleig, chief innovation officer for the Louisiana Economic Development agency, says he’s excited to help fund startup technology companies that could improve the health of rural residents in the state. (Margot McNeely/Louisiana Innovation)

Louisiana and a handful of other states set aside money from their share of the $50 billion federal Rural Health Transformation Program to quickly invest in new technologies, mirroring private industry moves. Lawmakers added the rural health program to offset more than $900 billion in reduced Medicaid spending expected over 10 years from Republicans’ sweeping 2025 tax and spending law.

But rather than filling the budget hole, the rural program’s assignment is to find new approaches for revitalizing rural communities where doctors are in short supply and hospitals have been downsizing and closing for decades. The federal government doled out the first-year rural health program awards to states this year, with pots ranging from $147 million in New Jersey to $281 million in Texas.

Modernizing technology infrastructure is a key pillar of the federal rural health program, and the catalyst money epitomizes the administration’s strategy to move fast and experiment with untested technology — much like the “move fast and break things” mantra during the heyday of Silicon Valley.

Instead of breaking things, though, the goal is to “move fast, fast-fail, innovate quickly, and move to sustainability,” said Aaron Bujnowski, a managing director with the healthcare industry group at the consultancy Alvarez & Marsal. “This is a transformation that is still meant to serve the people.”

Rigorous Rules and Tight Deadlines

Beyond Louisiana, Timothy Foster, a spokesperson for the Centers for Medicare & Medicaid Services, confirmed that Delaware, Georgia, Massachusetts, Nebraska, South Carolina, Virginia, and West Virginia are also creating rural health tech catalyst funds.

Every year, states must compete for rural funding in the five-year federal program. Federal regulators will take money away from states that do not meet the goals promised in their applications, including whether they designated money to companies for tech innovations.

CMS, which is overseeing the program, released a seven-step guidance document for states to follow when creating the tech catalyst operations. No more than 10% of each state’s award can be spent on a rural tech catalyst fund.

States’ initial annual progress reports for the rural fund were due at the end of August. CMS has declined to publicly post those reports; it plans to publish an annual report on state progress. States must show that first-year funds will be obligated — but not necessarily spent — by Oct. 30, according to the CMS guidance document.

Daniel X. O’Neil, a technology consultant who advocates for open data and open government, created a state tracker and parsed the original state applications to find dozens that mention catalyst awards and technology funds.

O’Neil said he is “looking forward to the clawbacks and the craziness of October because, you know, that’s serious stuff.”

For the rural health catalyst funds, CMS requires states to submit the list of finalists “at least 15 business days” before announcing winners, along with “sufficient information” for the agency to “assess each proposed project,” according to the guidance document.

The document outlines intellectual property and federal rights but does not provide guidance or standards for patient rights or protections. CMS spokesperson Foster stated in an email that the technology investments must comply with federal “privacy, security, interoperability, and patient safety” requirements.

Protecting Patients

Maya Sandalow, director of the health program at the Bipartisan Policy Center and one of the leading analysts watching the rural fund, said the catalyst funds are “public dollars” and has called for more transparency in the overall rural health program. The center is a nonprofit think tank in Washington, D.C.

Accurate and timely reporting must be done to ensure “the necessary guardrails are in place” to protect patients, she said, adding that the innovation needs to be “tested in a way that’s safe for the patients that they are going to be used on.”

To apply, startups must be less than 10 years old and have raised less than $50 million in early funding. Companies that win a portion of state catalyst funds must meet predetermined milestones before being paid — and federal officials will make “targeted reviews as needed,” according to the guidance document.

Louisiana officials announced the state’s tech catalyst fund with an event in rural Natchitoches, known as the filming location of the 1989 film Steel Magnolias. The fund quickly drew more than 200 companies competing for between $250,000 and $3 million in seed money.

Tiny startup Greens Health was invited to the event. The 2-year-old company analyzes Medicare claims to identify patients with chronic diseases, such as diabetes, and works with local home health nurses and senior facilities to improve care.

“We’ve been looking for a way to launch in Louisiana,” said Kehlin Swain, co-founder and chief executive of Greens Health. The company serves about 100 patients across Texas, Alabama, and Florida and hopes to get a $250,000 investment from Louisiana.

Louisiana’s Fleig said his state is “at a really interesting turning point.” The state secured $208.4 million for the first year of the rural health program and quickly created its catalyst fund using the state’s already established innovation department.

At the same time, nearly 1.1 million people live in Louisiana’s rural parishes and the state ranks as the “least healthy” in the nation, according to its own application. State rates of diabetes, obesity, and cardiovascular disease are among the highest in the nation.

Fleig believes Louisiana is an ideal place to test technology solutions. So, while Silicon Valley has “not needed much of what Louisiana has had to offer” for much of its existence, it does now, he said.

Caret Health is one of those companies. Co-founders Riya Pulicharam, who is a physician-researcher, and Kevin Zhao, an engineer, met in Silicon Valley. Together, they created a technology platform that identifies patients who need help getting to their appointments, having scans done, or picking up prescriptions. That technology flags a human, who then contacts the patient with a call or text.

Zhao said Caret had successful pilots at large health systems, but those places also had other vendors and “it was a pretty big uphill battle” to get in and scale. Then, in 2024, the company began paying attention to rural places.

“There wasn’t a lot of existing infrastructure. And that was really good for us because we were able to come in very quickly,” Zhao said. “A lot of the hospitals really needed this kind of service.”

Fast-forward to 2026: Caret Health is about 4 years old and has contracted with about 60 hospitals in 16 states. Pulicharam and Zhao hope to win $3 million to expand into Louisiana.

Louisiana’s Fleig said the state will take an equity stake in each company it invests in. “The dream” is that selected startup companies will also help the state make money to reinvest. If some companies fail — or fail fast — that’s to be expected, but the state should still make money because of “the law of averages,” he said.

“If we are good, we’ll make more money than we spent,” Fleig said. “Either way, it’s going to go back into improving healthcare outcomes.”

Rural Tech-Catalyst Funds: Fast-Moving, High-Pressure

First-year progress reports were due at the end of August. Using the annual report, federal officials will recalculate and potentially claw back money from underperforming states, according to reporting requirements created by the Centers for Medicare & Medicaid Services, which oversees the program.

States will be scored on a multitude of initiatives and plans, plus whether they earmark their first-year spending by Oct. 30. Year 2 funding will be determined by the end of October.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Taya Hailstone has been in remission from childhood Hodgkin lymphoma for five years. But the cancer’s lasting damage to her organs and nerves can make basic tasks, like loading a dishwasher, hard.

Still, Montana’s health department decided last year that Hailstone is no longer eligible for low-cost disability health coverage through Medicaid. The department switched her coverage to the state’s Children’s Health Insurance Program, another Medicaid program — three months before she aged out.

Before making the decision, the state didn’t seek records from the medical team treating Hailstone, according to letters from those doctors reviewed by KFF Health News. Rather, the administrative ruling came after state officials learned the now-19-year-old had stopped receiving Social Security disability payments. She said she did that because she hoped to get healthy enough to work and save some money — beyond what’s allowed under the strict income caps tethered to those payments. But her health changes day to day, and she said for now she’s still too sick to consistently work.

Hailstone, who lives with her mom, has been able to keep Medicaid coverage while they appeal the case. She said that without Medicaid she can’t afford the treatment to manage the aftermath of her cancer.

“It feels like this process was made to make you give up,” Hailstone said.

Patients with disabilities have long struggled with administrative hoops, blunders, and confusion when trying to qualify for federally subsidized health coverage because of their illness. Now, new federal Medicaid work requirements mean states face the additional task of deciding who qualifies for a medical exemption. That means reviewing medical cases for an even larger swath of Medicaid enrollees.

Attorneys, researchers, and advocates who specialize in public aid said disability cases like Hailstone’s — though separate from the incoming work requirements — are an indication that states aren’t ready. As a result, they said, more people will be denied coverage in an opaque process.

“This will be the story of millions of people,” said Anthony Wright, who heads Families USA, a national nonprofit that advocates for ways to make healthcare more accessible.

Jon Ebelt, a spokesperson with the Montana Department of Public Health and Human Services, said the state doesn’t comment on individual Medicaid cases.

An estimated 18.5 million people will have to meet the new rules requiring them to prove they’re working, going to school, or volunteering to keep their Medicaid coverage, according to the Congressional Budget Office. More than 40% of those enrollees live with a chronic health condition, according to KFF. Some will be excused from those rules if they can prove they’re too sick to work.

More than 5 million people are expected to lose Medicaid coverage by 2034 because of the work requirements, according to the CBO.

Work Requirements Become Law

Many Republican policymakers and the Trump administration have touted Medicaid work requirements to preserve coverage for the neediest. Congress made that national policy through last year’s One Big Beautiful Bill Act and gave states until January 2027 to implement work-for-coverage rules.

Some states are starting those checks early. Montana began in July. Nebraska initiated work requirements in May.

In the federal law creating the work requirements, Congress allowed states to exempt people who have an illness that qualifies them as “medically frail.” Many states created plans for those judgment calls, only to be surprised when federal officials released rules for the requirements that went beyond what Congress outlined, by also requiring enrollees to prove their illness makes it too hard to work.

Families USA and other organizations have argued the new rules force states to set up a patchwork of systems that, together, would be larger and more complicated than the Social Security Administration’s own disability review system. Last year, that federal program cost more than $5 billion to administer to roughly 7 million people nationally. For comparison, Wright said, the federal law provided $200 million for states to share as they implement the work requirements. States are paying contractors millions of dollars to prepare often already flawed public aid systems to meet the new standards.

In June, 25 states sued the Trump administration over the medical frailty rules, arguing they’re too hard for patients to meet and for states to assess. That case is ongoing.

Hailstone was diagnosed with blood cancer at age 10. Her intestines tore, which led to their partial removal. As a result, her body struggles to process food and she can face severe dehydration. She said lingering side effects from her cancer treatment can leave her mind foggy and cause her hands and feet to swell enough that it’s hard to grip a fork or walk across a room.

Cancer dominated nearly half her life. It left mental scars, too.

“Some days you feel fine and then you suddenly crash,” Hailstone said.

Hailstone during her treatment for Hodgkin lymphoma. Though she has been in remission for five years, she deals with lasting effects from the disease. Now she is trying to convince the state of Montana that she should still qualify for Medicaid’s disability coverage. (Kyla Hailstone)

Hailstone and her mom live in Roundup, a central Montana town of roughly 2,000 people. They regularly make the nearly two-hour round-trip drive to Billings for specialized care. She typically has three medical appointments a week to see her physical and occupational therapists and a mental health counselor.

Hailstone said she’s lucky she has her mother’s help navigating Medicaid. Her mom, Kyla Hailstone, said that the state hasn’t clearly defined how it determined her daughter’s disability status and that its appeal process has been slow and dysfunctional.

Taya Hailstone would qualify for Medicaid based on her income if she can’t prove her eligibility for disability coverage. But that would mean proving she’s too sick to meet the work requirement — putting her in the same position of having to rely on a state review of her illness.

“If I lose this, this is life-changing,” Hailstone said.

‘Things Fall Through the Cracks’

Hailstone qualified as disabled through the federal government as recently as 2024, about a year before the state said it was dropping her coverage. State officials can do their own medical review to determine whether someone meets the federal definition of a disability to access Medicaid.

“Whether that happens is always a bit of a crapshoot just based on state capacity,” said Megan Dishong, deputy director of the Montana Legal Services Association, which helps low-income people navigate public programs. “Things fall through the cracks.”

Ebelt said the state health department accepts disability decisions from the Social Security Administration. The state agency can conduct an internal disability determination if a person doesn’t have one from the SSA, but Ebelt said it doesn’t have to if a person qualifies for coverage another way.

“We are committed to treating every client with respect and helping those who are eligible receive appropriate Medicaid coverage,” Ebelt said.

Montana instituted a three-month grace period for the work requirements. State officials won’t begin disenrolling people for noncompliance until October.

Pamela Herd, a University of Michigan social policy professor who has studied bureaucratic obstacles to public benefits, said convoluted disability cases are common enough for attorneys to specialize in accessing aid.

“When we’ve designed public programs in ways that people can’t figure out whether they’re eligible without consulting lawyers, we’ve done something wrong,” Herd said. “That has huge, huge implications for what’s to come.”

Montana officials have said they’ll automatically review medical records that could help patients qualify for an exemption. Even so, the federal guidelines released in June mean patients will probably still face additional steps to guarantee an exemption.

Meanwhile, already overstretched doctors worry they’ll face the burden of judging whether someone’s illness qualifies them for a work exemption.

Dishong said that between now and October, Montana officials could offer more clarity on how the process will work. She said she’s worried the state will end up “with a slow-roll mess” instead.

“This is a problem that’s just starting,” Dishong said.

As for Hailstone, she’s now reapplying for Social Security disability payments. That aid would limit how much she can work. But it would also guarantee access to Medicaid.

Have you tried to prove your eligibility for Medicaid under new rules that require people to show they are working, going to school, or participating in another qualifying activity? Click here to contact KFF Health News.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Employer-sponsored health insurance covers more than 165 million Americans. It can entice someone to work at one company over another, or be a set of golden handcuffs that keeps them locked into a job they may not enjoy.

But rising costs are straining that system like never before. As premiums balloon, employers have started to pass on more costs to their workers, and the percentage of small businesses offering employees health insurance has dropped significantly.

Stat reporter Bob Herman has been covering this in his series “Out of Pocket, Out of Reach.” An Arm and a Leg host Dan Weissmann and Herman break down how businesses big and small handle the skyrocketing cost of providing health insurance and what it means for workers.

Dan Weissmann @danweissmann @danweissmann.bsky.social Host and producer of "An Arm and a Leg." Previously, Dan was a staff reporter for Marketplace and Chicago's WBEZ. His work also appears on "All Things Considered," Marketplace, the BBC, "99% Invisible," and "Reveal," from the Center for Investigative Reporting. Credits Emily Pisacreta Producer Claire Davenport Producer Adam Raymonda Audio wizard Ellen Weiss Editor Click to open the Transcript Transcript: System meltdown: employer-sponsored health insurance

Note: “An Arm and a Leg” uses speech-recognition software to generate transcripts, which may contain errors. Please use the transcript as a tool but check the corresponding audio before quoting the podcast.

Dan: Hey there. Rachel Bernier-Green runs Thrive-O Financial Advisory on Chicago’s South Side. She describes herself as a fractional CFO for small businesses, offering strategic financial advice along with accounting services. And she says employee health insurance was part of her business plan from the beginning.

Before she even had employees, she built extra money into her prices, and at first, she put that extra money into a rainy day fund. But by late 2024, she thought the time had come. 

Rachel Bernier-Green: I’d been in business for a while. I had a few team members, and things were moving along. 

Dan: She wanted to keep those team members around, and she knew health insurance would help do that

Rachel Bernier-Green: And so that’s when I actually started to think, “How do we actually get this in place?”

Dan: She says she moved quickly– and by January 2025, her six-person team had health insurance.  Then things got wobbly.

Early in the year, a major client left. Income took a hit, and by spring she could see big trouble coming toward her. Insurance for 2026 was going to be way more expensive. And she could tell because some of her clients were already seeing rate hikes from their health insurance companies.

They had policies that renewed early in the year, . And these were much steeper increases than they’d been expecting, so they came to Rachel, their fractional CFO, to help them figure out how to adjust, and Rachel knew she would have to do the same.

Rachel Bernier-Green: It was almost like standing on a train tracks and you’re just kind of staring down the impending doom because you know you’re going to be in the exact same situation in a couple of months.

Dan: She says she shared the bad tidings with her team as data came in right from the start, and she said she makes a practice of sharing the company’s finances, details and all, with her colleagues. She calls it open book accounting.

Rachel Bernier-Green: We have regular team meetings where we’re discussing these things and we could all look at the numbers and the writing was on the wall. So when we kind of got to the end of the road, it wasn’t me saying, “Surprise, here’s what’s going on with the health insurance.” It was more, okay, we’ve reached the point where we have to make a decision and call it.

Dan: They made the call at a regular team meeting, which doesn’t mean the meeting was routine.

Rachel Bernier-Green: My heart was just in my stomach. Um, Because like I knew what we needed to do and I just didn’t want to, want to do it. 

Dan: But they’d gotten their renewal notice for 2026. Health insurance was gonna go up by more than 10%. Rachel says everybody agreed the business couldn’t afford it. 

Rachel Bernier-Green: The numbers were pretty clear in black and white. the entire team was on the same page that what was most important was that the business continues to survive so that we could bring back those benefits in the future. 

The thing I remember the most is that another team member who relied on the insurance reassuring me that that was the right thing to do.

Dan: Even with that kind of consensus, and even with a plan in place to bring back those benefits for 2027, Rachel describes the whole episode as devastating. She’s gone on a plan from her husband’s employer. Some other colleagues have done the same, one has left the firm, and two are uninsured. Rachel and her colleagues aren’t alone.

They’re a case study. A reporter named Bob Herman featured them recently in a story for STAT — a news outlet dedicated to health and medicine.  The headline for Bob’s story: America’s Small Businesses are Giving Up on Health Insurance. And the crisis Bob is reporting on goes beyond small employers. That story kicked off an eight-part series called Out of Pocket, Out of Reach, with a subtitle that tells you how big and how deep this crisis goes.

It’s “How America’s Employer-Based Healthcare System Continues to Crumble in Slow Motion,” which sounds scary and absolutely sucks, but it’s the kind of big picture look we really need, and Bob is exactly the person to break it down. He’s the Business of Healthcare Reporter at Stat. He has done the most comprehensive reporting on the giant UnitedHealth Group.

And for years, he’s published a list of the top paid CEOs in healthcare. These compensation packages go to the hundreds of millions of dollars a year in some cases. It’s completely wild. And he knows how to bring a huge story down to earth. He’s coming right up. This is An Arm and a Leg, a show about why healthcare costs so freaking much and what we can maybe do about it.

I’m Dan Weissmann, I’m a reporter. I like a challenge, so the job we’ve chosen here is to take one of the most enraging, terrifying, depressing parts of American life and bring you something entertaining, empowering, and useful. Bob Herman joined me from a closet. One of his kids had a friend over, it was the quietest place in his house.

He was sitting on the floor. I should’ve been recording the whole time. But we did have the recorder on when I asked him, “How did you come to the conclusion that employer health insurance doesn’t just suck, it’s crumbling?”

Bob Herman: Well, here, maybe it’ll help if I explain kind of the origins of why we even started it. Um, so I’d gotten back from parental leave last year around November. My wife and I just had our second kid, and literally the first thing I have to do, both of us, we both have to do when we get back, is we have to figure out what health insurance plans we’re gonna enroll for the next year, which, as I’m sure you and every one of your listeners knows, is a miserable experience. Um, and I… And we cover healthcare, and it’s still miserable. It’s tedious but also it’s, it, it is high stakes. And at that time, we had seen all the headlines that employer-sponsored health insurance was experiencing double-digit increases ac- everywhere. It is one of the primary ways that Americans are covered, and we’re all getting slammed in the face with historically high premium increases. It turned into, like, this needs to be a project at Stat. Let’s go after it. Let’s figure out what’s going on. And I think it just became very clear that employer-sponsored health insurance is not, you know, the robust product that I think a lot of people think it is.

Dan: And your conclusion here is, like, there’s a structural problem here, starting with how fast the cost of employer-sponsored insurance is going up. 

There’s a, there’s a really big number in your story where you kind of compare how much more health insurance costs now than it did 40 years ago comparing it to the rate of inflation. And basically, health insurance prices have risen almost four times as much as inflation in general. 

Bob: ?Right. And like, you know, we’re talking over the past several decades, almost 1,000% increase versus wages that were much, much lower than that., 

Dan:  So, one takeaway there is:  This huge increase amounts to something like a hidden pay cut for all of us. 

Bob Herman: Hopefully that’s one thing that this series can accomplish is for all workers out there, when you enroll in your health plan every year, how your employer’s paying for it, how much is getting taken out of your own paycheck. These are things that ultimately affect how someone can pay for their day-to-day things, like groceries feel expensive, rent feels expensive. Why? I think part of it is because your employer health plan, it’s become such a financial burden for everybody

Dan: Yeah. Yeah. That is, I, yes. I mean, you, you’ve said to me, I, I think about all the time, which is like, even if your employer covers your health insurance, , like every dollar that your employer is putting toward health insurance is a dollar they could be paying you. It’s a dollar that’s on the budget line for your position

Bob Herman: It’s exactly right, Dan, and this is like, you know, it’s like an iceberg. I think a lot of people see, like, what’s, what gets taken out of their paycheck every month. Like, okay, I’m paying, you know, a couple hundred dollars toward my health- health insurance premium. That is only, like, 20 to 25% of what your actual premium is.

Your employer’s paying most of it. You just don’t see it. But, like, there is so, like, this big block of compensation that you get, a big and growing chunk of it is for the h- for your health plan, and it’s so hidden, and I think that’s what kind of makes the whole p- the, the whole thing so difficult, uh, for Americans to afford.

Dan: I mean the amounts are really striking. The average employer plan for a family now costs 27 thousand dollars a year. That’s average, not the most expensive. And that’s like? It’s a new car, right? These days it’s y- and not, I mean, not a top-of-the-line car, but a Toyota Corolla is, you know, a car yeah 

Bob Herman: Yeah, it, it’s that new, it’s that new car every year, but the employer’s paying the tens of thousands that makes up most of the car. That’s the part that is hidden and that’s what, you know, I think makes the healthcare system, you know, really take advantage of everything

Dan: And, um, you know I notice you’re saying that the fact that it’s hidden helps the health care SYSTEM take advantage of everything.  Not just the health insurance companies. Because they make profits, band they’re the conduit through which everyone else also gets paid.

Bob: You’re right, like it is the health, the health insurance company often takes some for itself, yes, but majority of that money is, it goes out the door to hospitals, to drug companies, to doctors, to device makers, drug distributors, whoever else. Like, all those different companies know that the employer-sponsored system is like their golden goose. 

Dan: So that wild inflation in health insurance premiums — it’s driven by how much more everything in health care costs. How much prices keep going up.  You’ve said — I mean, everybody knows — we pay more for health care in the US than anywhere in the world. Knee replacement, MRI, any meds you can name, we pay a lot more. And I hear you saying: The fact that some of these costs are hidden — they’re bundled into employer health plans — that actually creates opportunities for price gouging, for all kinds of gaming the system. 

Bob Herman: there’s all this money that employers are dumping into these, you know, health insurance premiums for their workers, and it is, it’s like a feeding frenzy. Uh, you know, years ago I remember going to JP, the JP Morgan conference, uh, out in San Francisco. It’s just like the confab where all the big healthcare industry players, you know, gush about how much money they’re making. And commercial insurance, the employer-based insurance is their golden goose, and they know it. And, I, I went around talking to people, and it’s not like they were dismissing that idea. They know that the commercial insurance market, the, what we get, what we all pay for and through our employers, that’s where they make hay. They could charge whatever they want, they being hospitals, doctors, drugs, doesn’t matter. They know that there’s that massive pool of money there. It is, you know, just imagine, like, Scrooge McDuck, right, where there’s this massive pile of coins, and he’s kinda swimming through it. And

Dan: That image has come up before on this show. 

Bob Herman: Yeah, it, it’s just that is, that is the employer market. And, you know, it’s, it’s a lot easier to make money when, you know, the people who are paying into it don’t understand how much they’re paying into it

Dan: Yeah. So you came into this project ’cause you cover the whole business of healthcare. You were already thinking like, “This is a huge story people need to know about. It’s a hidden pay cut. It keeps making insurance and healthcare more expensive every year. Keeps getting worse.” But it, it sounds like you didn’t realize at first the kind of trouble that small businesses were in

Bob Herman: As I was just doing research and talking with people and reading up, you know, there was a KFF employer health benefits survey, I and just buried deep th- within this, very detailed report, there was this chart showing for companies with 200 or fewer employees, you know, a little bit less than 60% of these small companies were offering health insurance now. Historic low, it’s the lowest it, it had ever been . And I was like, And I was like, oh my God, like, that is a shift. It’s this idea that small companies are giving up on this grand American idea of offering health insurance. It’s actually unraveling right now. 

Dan: and so, you concluded small businesses are giving up on health insurance what does that mean they’re actually doing?

Bob Herman: Yeah. I think when we think about employer-sponsored health insurance, companies do it because it’s a retention tool. And , it could be a deciding factor for an employee to come work for you, right?

Like, “Oh, my gosh,” like, “this health plan looks pretty good. Sign me up.” but if, if it’s actually eating into your bottom line, especially as a small business where you don’t have a whole lot of margin to begin with, like that is, that is huge.

 Small companies, they already kind of live on the bleeding edge, right? They just, you know, if you’re at a Fortune 100 company, you have more money than you know what to do with. If you’re a small company, just by your nature, you don’t, you know, your business is small. And it means that the cost of health insurance eat into your expenses so much more.

 And, you know, if you’re just a company of like, for example, 25 people, and you have one really big medical claim, your insurance company can, could come back to you next year and say, “We gotta raise rates 20% because of that one medical claim.”  and, and you know what the crazy thing is? It’s like a 20% is a, a g- gigantic amount, and it’s not, like, that uncommon for a small business to get slapped with that. Like, I, I spoke with, a business in Pennsylvania, and they were staring down the barrel of, like, a 50% increase.

 It’s not uncommon for premiums to, like, double, which, what are you gonna do then? You have to look for other options.

Dan: A-and what you knew when you started was things are getting bad, like rates have been going up even faster than we’re used to, right?

Bob Herman: And the, the past two years in particular have been really bad because, you know, insurers, like they endured a lot of losses. Not a lot of losses, but like they, this … The, the losses were more than they had expected over the past couple years, and so they’re making up for it now. They made up for it in 2026, and they’re making up for it again in 2027, and that’s exactly what you and others are feeling right now

Dan: C- I mean, they’re the house. It’s a casino and they set the odds, and the house never loses. Like, it’s, it’s made that way. Like, you can’t… Like, the, the bookmaker never loses. Like, , they employ a lot of actuaries, and actuaries are just bookmakers, right?

Bob Herman: Yeah. The actuaries, they are the, the very smart people that analyze, like, how much care everyone’s getting and how much they can predict that that will go up next year. , and they’re pretty good at it. And, you know, obviously the past couple years they were less good at it, but They know if there is a bad year, they can easily adjust the premiums to make up for that bad year. There is no, there’s no multiple years of losing money in health insurance. That, that just doesn’t happen

Dan: Unlike, unlike the rest of us. Yeah. So, if you’re really big, you’re spreading the risk out across a whole bunch of people, and you have reserves, and you have long-term plans.

 And if you’re a tiny little business you don’t have all of the tools to kind of sock money away for something or pull money out of your budget someplace else. Is that, is that basically the, the deal?

Bob Herman: I thi- yeah, I think you have it spot on. If you’re a big company, you can weather these things better.The more people you have, the more money you have to pay out when someone does have to file some kind of claim.

Dan: So but so what did your reporting show you about what small businesses are doing instead and what workers are doing instead?

Bob Herman: Yeah. I mean, none of it is ideal, right? ‘Cause, like, m- a lot of small businesses, they… The ones that I spoke with, and I think this is generally true, like, they wanna offer health insurance. And when they can’t do that, some are just saying, like, “You’re just gonna have to figure it out yourself,” which is, like, it’s a great way to lose an employee, right? Like, “Oh my God, I don’t have the safety net anymore.”

Others are doing, you know, maybe giving their employees extra cash that they can say, “Hey, go buy a health plan on the ACA marketplace.” And you know, it’s not ideal because if you think, you know, when, if you have a employer plan, usually it’s, you know, there’s a, a pretty big network or there’s, like, lower out-of-pocket costs, and when you go to the exchanges, it is a world of difference.

 Like, your doctor may or may not be in-network. Out-of-pocket costs and deductibles are generally much higher, and it’s just, it’s a completely different product. 

Dan: It’s worse. That what you find on the exchanges as an individual is worse than what you’d

Bob Herman: It is. 

Dan: I, I have, I, I, I know this firsthand. Like, the first episode of our podcast, I’m shopping on the exchange. I’m like, “This is bad.”

Bob Herman: Yeah, and like, don’t get me wrong, the ACA provided some kind of baseline level of protection for people who would otherwise be uninsurable. Like b- like, it’s crazy to think about 20 years ago, if you had some kind of preexisting condition, you just couldn’t get insurance. Like, sorry. And, um, but, uh, like the ACA plans are, they’re rough.

Like, it, like it’s, it almost… Like, if you have a $9,000 deductible, is that even insurance at that point? I think that’s a fair question to ask

Dan: And, a- and just to zoom out from there, like that chart you found, the one that showed smaller employers are down to just like 60% offering health insurance, it, it also showed that for larger employers, that number hasn’t changed much, right? It’s like still like 97%.

Bob Herman: Yeah, it’s, um, I think this question’s important because, um, it, it does kind of help explain the economy in terms of haves and have-nots, right? Where the biggest companies are always gonna be able to offer health insurance if they really want to. They just, they have the money to do it. Small businesses, like, we’re living in the shift right now where small businesses are not thriving anymore in terms of offering health insurance, . Well, guess what? Like, I don’t s- foresee this reversing course anytime soon. Ask any small business, and more of them are gonna be like, “You know, my time is, like, up.”

 And, you know, is it, does this, does this spur companies to shut down? I don’t know. Like, it’s totally plausible. Um, it’s not good. It’s not good for the economy, and it, there was even a recent survey that shows that it’s not good for workers either. Like, a lot of people just stick in their jobs, jobs that they hate, because they’re just doing it for the health insurance.

 Like, what kind of economy is that where you’re doing something, you’re collecting a paycheck really to just also get health insurance? It’s not, doesn’t feel particularly productive. So, like, these are all problems that are happening right now

Dan: The, I, I saw that survey and you wrote about it. Like twenty four percent of people in that survey said, “I would leave my job except for the health insurance.” A quarter of people

Bob Herman: Yeah. And what a term, right? Job lock. Like it’s, it’s this well-known economic term, job lock. Like you’re s- you’re locked into your job not because you want to, because, but because you feel like you need to. It’s, 

Dan: And you dug into some of those numbers. You were like, “Yeah, and job lock does not hit all people equally,” right? That people are… Who’s, who’s more vulnerable to job lock?

Bob Herman: It’s, it’s oftentimes it’s people who have more chronic health conditions, right? It’s like, “Oh my God, I know I’m going to be a user of my health insurance.” So like, that makes more s- like especially women because, um, you know, especially if, if you’re planning on having a baby or if you just have any kind of chronic condition, it’s like you are… If you know you’re gonna be using your health plan, you can’t afford to leave your job even if you think it sucks

Dan: , you said at the top of our conversation that, you know, this system is collapsing and that, that health insurance isn’t, employer health insurance is not the kind of robust product we thought it was. And not just for small businesses, even though it’s more obvious for them. But you did report this spring briefly on a survey that said, like, some large number of CFOs were like, “Yeah, we didn’t hire people,” or, “We raised our prices,” uh, because of the cost of health insurance, right?

Bob Herman: Yeah, this is still affecting larger businesses, and it’s happening in all the usual ways that we’ve seen over the past, you know, two decades. It’s making deductibles higher for employees. It’s making them contribute more from their paychecks. It’s changing the health plans. And, you know, I, I just spoke with someone the other day. They said that their out-of-pocket max, it’s the term like after you reach this amount, you don’t have to pay any more for the rest of the year, like it doubled. Like that is a health benefit design change where it actually functions like a wage cut too, right? So th- big companies will always be able to do it, but they have been making changes, and most of the times it just means that the worker and their dependents are taking it on the chin somehow.

Dan: Making health insurance worse. So, I mean, there’s a big story that’s just coming out right now: Did you see the story that Disney is saying, “Actually, your spouse can’t be on your plan anymore if they have an offer from their employer”?

Bob Herman: Yeah, , Disney’s basically saying if your spouse has an offer of insurance through their own employer, they have to take that. They can’t join the Disney plan, which is just, honestly, it’s batshit crazy.

For a company that is, like, supposed to be very family-friendly, this is a very anti-family-friendly thing that they’re doing

Dan: The analysis that I saw was like, look, uh, who chooses our insurance when they have an offer from their insurance? It’s somebody who thinks our insurance is better and is, and thinks they’re likely to use it.

Bob Herman: Right. 

Dan: We think we’re gonna be paying out claims. 

Bob Herman: Right. Yeah, I mean, if you think about it, um, if, if you are sick and you know you’re gonna use insurance, you’re gonna choose the plan that, uh, that offers you more protection. Um, so I mean, like actuarily, like it makes sense. Like they’re, they, they have data showing that like when people join or when dependents join the plan, it is costing them more money, and now they’re going to actively stop it. Like if, if the entire social fabric of employer-based insurance is you, if you have a job, you can get an offer of insurance and your, you and your family can join it, even that is starting to unravel. Like what happens if every other employer did this?

Dan: Yeah, it sounds like the idea you started with — that big employers will keep offering health insurance — they’re not gonna walk away but it sounds like you’re reconsidering this?

Bob Herman: I am kind of reconsidering, and honestly, it’s the GLP-1s that have really started making me reconsider this. Like, Pepsi just this week said, “We’re not offering GLP-1 coverage for weight loss anymore for our employees.” Like, it’s not to say, like, that big… I still think big companies are always gonna offer health insurance, but e- but something like GLP-1 coverage, where it is o- so much money and so many people are using it, 

[00:29:46] Even for that, they’re saying, “No, we can’t do it anymore.” they’re still gonna offer coverage that will, that will try to attract people that they wanna attract. But stuff like this shows that, and, like, it is very clear the employer-sponsored health insurance system is unraveling more than perhaps I’ve ever seen.

Dan:  And yet: The experts Bob talked to all said, they don’t expect this system to change anytime soon.  And Bob ended up with some pretty clear ideas about just why that is. That’s coming right up.

This episode of An Arm and a Leg is a co-production of Public Road Productions and KFF Health News. That’s a nonprofit newsroom covering health issues in America. It’s a newsroom full of superstar reporters; we are honored to work with them.. 

Dan: The sense I got, you know, from your reporting is it, like, big employers aren’t happy about it. They’re, they’re mad. Um, they’re unhappy, but that this system is not likely to go away, So, if everybody’s like, “This sucks,” why doesn’t somebody do something? And you had, like, you had a kind of analysis of like, who’s getting things out of it. Who’s benefiting from, from the way things are?And who would get hurt if, if things changed?

Bob Herman: Getting rid of the employer sponsored health insurance system is just vehemently opposed by big business. They know, especially the largest businesses, if they offer an attractive health plan, they could get anybody they want.And then going back to the job lock, those people could also stay with them for a long time because they know that they have the health plan. Um, and the, the largest tax break in the entire code is employer sponsored health insurance, so it’s great for, you know, middle and upper class p- you know, people. It’s great for the businesses. They don’t… Like, nobody pays any taxes on it. 

Dan: I was really struck by the note that it’s the biggest, it’s the biggest tax break in the entire tax code, , we’re talking hundreds of billions of dollars that otherwise would go into the federal kitty that don’t. Um, so businesses, they see all of these, things that are beneficial to them, and even though it costs them so much money, it is not worth giving that up. like, “We, we still have way too many advantages from it, even though it costs us an arm and a leg.” You had a specific example, but like the Affordable Care Act was, part of its design was like super suped up, workplace health plans would incur a tax, and that this did 

Bob Herman: Yes. I, I don’t know if you remember that debate, Dan, but it wa- it was called the Cadillac tax, and it was this idea that, you know, if it’s a really, really super generous plan, we’re gonna start to tax a little bit. Everyone lost their minds about it, and it was across the board. It was businesses, it was unions, who obviously fight very hard to, you know, to, to negotiate for their health plans. It was just universally reviled. But the idea was we need to start taxing these. It went terribly. It got killed, and that w- it was honestly, it was a pretty modest change, and look at, look what happened there

Dan: A- and so I think what, what that example shows is there are people with something to lose, and then of course there’s all the people who, uh, you know, make money in healthcare, not just insurance companies, right? 

Bob Herman: Yeah. The healthcare industry is very powerful. If you look at like, like lobbying dollars, like healthcare companies and their trade groups are always at the top. And like, yeah, they want inertia. As they, you know, vacuum up another, you know, $6 trillion this year and exponentially more next yearIt is a feeding frenzy. And again, this was, this is money that otherwise would be in your paycheck.

Dan: Yeah. I mean, it’s just one of the things I think about of like, we become aware of how much things cost, a lot of us, when, like, we get a giant bill, or people we know, and we’re like, “That’s wild.” But as what you’re reporting is showing, like, no, all of this wildness is paid by all of us , a lot of us get insurance from our jobs, that’s money that could be our wages. We’re paying it there. Um, in places where the government pays for healthcare and it, we are paying that through our taxes. Um, and that is a part that I don’t think, I get to enough on this show, is that like, we’re vulnerable individually, but we’re also each of us individually paying a collective price.

Bob Herman: I remember years ago I was interviewing Don Berwick. He used to be the CMS administrator, uh, during President Obama’s term for a short while, and he made the good point that was like, workers pay for every dime of healthcare in this country, either through your wages or through what is owed to you through compensation or through taxes. Um, and I think if you, if your listeners just think of it that way, it’s actually pretty simple. Like, we’re all paying for this. It just doesn’t, it might not seem like it, but that is the reality

Dan: Um, this is a little bit risky, uh, just for our emotional health, but like, as a parent, as you report on these things, do you think about your kids as adults navigating an economy that’s another 20 and change years along this path?

Bob Herman: It’s, oh yeah. I mean, I’ve, uh, I, I don’t know. Maybe a lot of parents are worriers. I’m one of them. , I think about, like, my kids when they eventually have to go off our health insurance, right? When they have to find their own, and, you know, maybe they have their own healthcare needs at that point and they have to find something. Like, is it gonna be affordable for them? Are they gonna be one of those people who gets job locked, where they’re, they find a job but they absolutely hate every minute of it because they’re just doing it for the health insurance? Um, yeah. I, I mean, 20 years from now is a long time. Like, costs aren’t going down, and how will it affect their, you know, basic, uh, standards of living?

I have no idea. I, I mean, it’s hard not to think about it. Um, but it is far in the future, and I think that’s what also prevents people from changing things. Like, we know it’s bad, it’s gonna get worse, but, like, you know, when it’s that far in the future you can’t really address it right now. But I think that’s the perfect time to address, is before it gets so bad that our own kids can’t even, you know, afford their rent or their groceries or whatever else

Dan: I’m, I’m reminded, right, of the saying like, “The best time to plant a tree is 30 years ago, and the second best time to plant a tree is today.”

Bob Herman: Today. Exactly right 

 

Rachel Bernier-Green: I’m a little anxious about what we’ll be paying, but it, you know, it’s not keeping me up at night.

Dan: Back on the South Side of Chicago, Rachel Bernier-Green tells me she’s on track to bring insurance back for her team in 2027. She says changes they made to their business strategy last year have been paying off, so she’s got the money lined up

Rachel Bernier-Green: I mean, we hope that there are not, you know, more sky-high increases because yes, they do drastically, impact, um, our ability to operate the business But, ?I know that we’ll be well positioned to absorb the cost

Dan: as I, I’m preparing for today’s reporting, I’m like, “Oh yeah, this would be a good time for me to email our insurance broker and be like, ‘Hey Kurt, so what are we looking at for next year? Uh, I think it’s gonna be bad.’” And he’s like, “It’s gonna be bad.” He thinks for the plan that we’re on, which because of our needs for networks and stuff, is we don’t have a whole lot of choices. He’s like, “Yeah, you’re looking at like 14 to 18%, I think, for the next year.” 

Rachel Bernier-Green: Yeah. Yep Yeah. And, and the crazy thing is, like, I’m… Which sounds obscene, but I’m thinking is between 20 and 25%, um, that we need to be prepared for jumps of that magnitude. And I hope that that is not the case, but that’s what we are building into our, um, our models moving forward

Dan: And are you advising clients the same way?

Rachel Bernier-Green: Yeah. Yeah

Dan: I’m curious about, um, what it was like reading Bob’s story. What was it like, I mean, whether it was surprising or not, like what was it like seeing all of that kind of put together?

Rachel Bernier-Green: Oh, I was, um, just like silently cheering, um, because those are the, uh, exact conclusions that I, you know, I can’t inform the conclusions that he reaches, but that is exactly where, um, where I am. That the system is fundamentally broken and it is harming people in re- irreparable ways and that we need a significant overhaul,

Dan: Amen to that. Which is the thing about a story like this. On the one hand, it’s full of terrible news. On the other hand: Most of us — maybe all of us — are already experiencing the effects of all this terrible news. And I think it’s helpful, it’s good, to see it all tied together. To know:  We’re not alone. We’re not imagining things.  The whole system truly is completely broken — and as bob says, continuing to actually crumble.  

Even if we don’t have a *solution*, it’s good to know what we’re up against, to peel back the curtain.  

Next time on An Arm and a Leg, we take another look at Medicare Advantage. And, um… it’s more broken than we thought. 

News anchor: Many health insurance providers are dropping their Medicare Advantage plans.

Female voice: I heard that — I was just in tears.

Female voice 2: I don’t know any way to describe it other than total chaos. 

Dan: I’m hoping that you’re right here with me when I say:  It is so much better to know.  We do not want to get taken by surprise.

This episode of An Arm and a Leg was produced me, Dan Weissmann, with help from Emily Pisacreta — and edited by Ellen Weiss. 

Adam Raymonda is our audio wizard.

Our music is by Dave Weiner and Blue Dot Sessions. 

Claire Davenport is our engagement producer.

Amanda Boyd is our Operations Manager. Bea Bosco is our consulting director of operations. 

An Arm and a Leg is produced in partnership with KFF Health News. That’s a national newsroom producing in-depth journalism about health issues in America and a core program at KFF, an independent source of health policy research, polling, and journalism.

 Zach Dyer is senior audio producer at KFF Health News. He’s editorial liaison to this show.

An Arm and a Leg is distributed by KUOW, Seattle’s NPR news station.

And thanks to the Institute for Nonprofit News for serving as our fiscal sponsor.

They allow us to accept tax-exempt donations. You can learn more about INN at INN.org.

Finally, thank you to everybody who supports this show financially.

You can join in any time at arm and a leg show, dot com, slash: support.

An Arm and a Leg is a co-production of KFF Health News and Public Road Productions.

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KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

WAIANAE, Hawai‘i — Native Hawaiians will need to comply with new work requirements to qualify for Medicaid after being excluded from exemptions carved out for other Indigenous groups, an omission that clinicians fear will exacerbate the challenges the marginalized population already faces in getting healthcare.

In 43 states and the District of Columbia, President Donald Trump’s signature One Big Beautiful Bill Act will require most adults to work, go to school or enter a training program, or volunteer for at least 80 hours a month. Native Americans and Alaska Natives are exempt from the mandates, which take effect in January.

Of the nearly 700,000 Native Hawaiians in the U.S., around 47% live in Hawai‘i. Within the contiguous United States, California, Washington, Nevada, Texas, and Oregon have the largest populations of Native Hawaiians.

Hawaiʻi’s Medicaid administrator, Meredith Nichols, said the Centers for Medicare & Medicaid Services didn’t respond to the state’s request to include an exemption for Native Hawaiians but said she believes the decision came down to the population’s lack of recognition as a tribal nation. Hawai‘i has about 390,000 Medicaid enrollees, 15% of whom identify as Native Hawaiian, Nichols said.

“We know that when we’ve asked similar questions in the past, it all comes down to federal recognition,” she said.

Hawaiʻi health administrators met with Trump administration officials in June. Some unsuccessfully pushed to add an exemption to the new law, which would need congressional approval.

White House spokesperson Kush Desai did not respond to requests for comment. In a statement, CMS spokesperson Timothy Foster confirmed that the agency met with 16 health centers in Hawai‘i about Medicaid changes but didn’t respond to other questions.

Barriers to Care

Native Hawaiians face many of the same health disparities as Native Americans and Alaska Natives, including higher risks during pregnancy, higher infant mortality rates, and higher rates of being uninsured than the white population. And in Hawaiʻi, Native Hawaiians have the second-lowest life expectancy among ethnic groups after other Pacific Islanders.

Kapono Chong-Hanssen is the medical director of Ho‘ōla Lāhui, the Native Hawaiian healthcare system on Kaua‘i that also serves the privately owned island of Ni‘ihau, whose 170 full-time residents are predominantly Native Hawaiian. Chong-Hanssen said he anticipates many of his patients will no longer receive the care they need once the new work requirements take effect.

Chong-Hanssen says new Medicaid work requirements will erode the trust healthcare providers worked hard to build among Native Hawaiian patients. (Ashley Mizuo/KFF Health News) Ho‘ōla Lāhui, the Native Hawaiian healthcare system on Kaua‘i, operates out of multiple locations, including its clinic in Waimea on the west side of the island. Kaua‘i and Ni‘ihau were impacted by Hurricane Lowell this week, forcing Ho‘ōla Lāhui to temporarily close facilities. (Ashley Mizuo/KFF Health News)

The new requirements will erode the trust healthcare providers worked hard to build among Native Hawaiian patients, who, in response to historical disenfranchisement, are more likely to disengage and “throw the whole system out” when they run into barriers, Chong-Hanssen said. “It just flies in the face of everything that we’re trying to do.”

Beyond medical services, Medicaid covers transportation expenses when patients travel between islands for care. A round-trip ticket between Kaua‘i and O‘ahu, for example, can cost hundreds of dollars.

Congress placed over 200,000 acres of land in a trust for Hawaiian homesteads in 1921 to bring Hawaiians back to their native lands after the U.S. backed the 1893 illegal overthrow of the Hawaiian kingdom. Nearly 30,000 Native Hawaiians are still waiting for land, while, as of the 2020 census, more than 34,000 people lived on Hawaiian homelands. The homesteads are often far from Honolulu, where most health services are located.

Waianae Coast Comprehensive Health Center primarily serves the west side of O‘ahu, which is home to the island’s largest Native Hawaiian population, near four Hawaiian homesteads.

Waianae Coast Comprehensive Health Center CEO Rich Bettini (right) and Vice President Leinaala Kanana demonstrate how to use pods throughout the campus that connect patients via phone to an employee who will help them submit needed information and applications to the state’s Medicaid program. (Ashley Mizuo/KFF Health News)

The center’s vice president, Leinaala Kanana, said that many of its patients are geographically isolated and that few jobs are available in the area. Patients also have trouble securing transportation to get to work or finding affordable childcare.

The center’s CEO, Rich Bettini, said Hawai‘i’s high living costs and depressed wages have pushed many people into homelessness, creating another barrier to complying with the new Medicaid requirements. Native Hawaiian and Pacific Islanders make up about 60% of O‘ahu’s homeless population. The center estimated about 2,800 of its patients may be affected by the requirements, half of whom are Native Hawaiian.

The annual “cost of living for a family of four in Hawaiʻi on O‘ahu is $100,000-plus. The average income of our patients is under $30,000 a year,” he said. “That is an enormous gap.”

‘Bigger Fish To Fry’

Native Hawaiians face obstacles to being granted the same exemptions as other Indigenous groups. While several federal laws refer to Native Hawaiians as an Indigenous group, they are not among the 575 tribes recognized by the federal government. Federal recognition can be granted either by Congress or administratively through a process established by the Department of the Interior. Native Hawaiians remain divided about whether they would even want federal recognition, with some fearing it would jeopardize their ability to restore Hawaiian independence.

Laws governing Medicaid also don’t acknowledge Native Hawaiians, aside from the 2021 American Rescue Plan Act, signed by former President Joe Biden. In the covid-era law, the federal government fully reimbursed Native Hawaiian health centers for Medicaid services for two years. However, all the qualifying Native Hawaiian health centers were in Hawai‘i, where fewer than half of Native Hawaiians in the country now live.

The federal government fully reimburses Indian Health Service and tribal facilities for healthcare services provided to Native Americans and Alaska Natives. Native Hawaiian healthcare systems instead receive the same reimbursement rate as in the rest of Hawaiʻi.

Waianae Coast Comprehensive Health Center CEO Rich Bettini said Hawai‘i’s high cost of living and depressed wages have pushed many people into homelessness, creating another barrier for Native Hawaiians to comply with new Medicaid requirements. (Ashley Mizuo/KFF Health News)

Keolamaikalani Dean, the CEO of the King Lunalilo Trust, which provides services for Native Hawaiian elders, pointed to the new Medicaid requirements as just one of many federal policies limiting Native Hawaiians’ healthcare.

“It’s horrible as a policy, but there are bigger fish to fry,” he said.

Dean said he’d rather advocate for giving Native Hawaiian healthcare systems the same full Medicaid reimbursement that the Indian Health Service receives. The change would have greater impact on patients seeking care, he said.

Native Hawaiian advocates said they have been overextended as they work to guard against an onslaught of threats to revoke other federal funding by the Trump administration.

In Trump’s proposed 2027 budget, cuts to Native Hawaiian programs cited the group’s lack of federal recognition as a “tribal nation.” The proposed cuts coincide with lawsuits from conservative groups challenging Native Hawaiian education programs and long-standing legislation that provides homestead land to some Native Hawaiians at almost no cost, alleging the programs racially discriminate against other groups.

Papa Ola Lōkahi, a nonprofit that oversees the Native Hawaiian healthcare systems in the state, declined to comment for this article. The group is involved in a lawsuit filed by a conservative group aiming to stop a university scholarship for Native Hawaiians pursuing healthcare careers.

U.S. Rep. Jill Tokuda (D-Hawaiʻi) viewed the exclusion of Native Hawaiians from the exemptions to Medicaid work requirements as an attempt to further erode Native Hawaiians’ Indigenous status, pointing to recent challenges by the Trump administration and lawsuits.

“These are not one-offs,” Tokuda said. “This is a targeted, coordinated attack to undercut the Indigenous status of Native Hawaiians.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

TROY, N.Y. — Like many residents of this aging industrial city on the Hudson River, Starletta Washington was stunned when she heard Troy’s last remaining hospital planned to close its birthing center.

“It was devastating,” said Washington, who heads the local YWCA. Washington was born at the hospital and had her children there. She couldn’t believe families would now have to get to a hospital half an hour away or face the prospect of an emergency delivery.

“Nobody else was going to be born in the city of Troy unless they were born on a city bus, in the back of a cab, or, disgustingly, on the side of the street?” Washington said. “Blew my mind.”

Troy wasn’t the first community to face this prospect. Since 2010, hospitals have closed hundreds of maternity units as cities and towns shrink and hospitals consolidate into larger systems.

Troy found a more hopeful ending.

Elected officials from both major parties joined patient advocates, mothers, midwives, doulas, and community leaders like Washington to challenge Trinity Health, the large Catholic health system that owns Troy’s hospital and birthing center. The campaign even united Planned Parenthood and the Catholic diocese.

“Whether you were Republican or Democrat, or if you didn’t vote, it literally brought everyone together,” said Carmella Mantello, the city’s Republican mayor. “Everyone just said, ‘We can’t let this happen.’”

Carmella Mantello, the Republican mayor of Troy, New York, says even nonprofit hospitals seem to have become more corporate. “The whole hospital scene has changed,” she says. (Hannah Norman/KFF Health News) Starletta Washington, who heads the YWCA in Troy, was born at the hospital where Burdett Birth Center is located. Like many in the community, she says she was blindsided by Trinity Health’s plan to close the center. (Hannah Norman/KFF Health News)

Throughout the country, healthcare remains a flash point as politicians square off ahead of November’s elections. But in many places, Americans are also quietly finding common ground.

In this small city, residents were brought together by frustration over large, corporate health systems that can seem to put profits over patients. And they resolved to work together to keep critical medical services in their community.

A Community Institution

Babies have been delivered at Samaritan Hospital on a hill above Troy since this city’s once bustling factories produced most of America’s shirt collars a century ago.

More recently, Samaritan’s Burdett Birth Center had become a model for patient-focused care. Midwives and doulas work alongside OB-GYNs and support mothers who want to avoid a delivery by cesarean section unless necessary.

Patient safety advocates have pushed for years to reduce surgical deliveries, which can lead to complications. At Burdett, only about a quarter of newborns are delivered by C-section, compared with about a third statewide, according to 2025 hospital data. Burdett also had fewer preterm births and fewer babies with low birth weights.

“I wouldn’t go anywhere else,” said Lidia Zambrano-Madera, who gave birth to both her children at Burdett with the help of a midwife.

Lidia Zambrano-Madera, a Troy resident, gave birth to both her children at the Burdett Birth Center with the help of a midwife. “I wouldn’t go anywhere else,” she says. (Jayana Espinoza)

For Zambrano-Madera, who recently opened a children’s play center in Troy, Burdett offered another advantage: It was just five minutes from home.

But three years ago, Trinity Health, a multibillion-dollar Michigan-based hospital system, said the birth center was losing money and would close. Families from Troy and surrounding Rensselaer County would have to deliver at another Trinity hospital in Albany, up to a half-hour’s drive away. The hospitals are branded under St. Peter’s Health Partners in the Albany region.

“We’ve been frantic about trying not to cut the care at the bedside,” said Steven Hanks, a physician who oversees Trinity hospitals in New York and New England. “But, you know, you get to a point where you can only consolidate so much. You can only spread people so thin, and then you have to start taking harder looks at your actual services.”

Corporate Backlash

Trinity’s plans — news of which broke in a local newspaper — came without warning, surprising the obstetrical staff and community leaders. They set off a firestorm.

Within days, midwives, mothers, community leaders, and politicians held a rally at the YWCA in downtown Troy. Others would follow. Volunteers led by doulas and midwives made T-shirts and handed out pink “Save Burdett” signs at the local farmers market.

Activists were outraged that the hospital hadn’t adequately assessed the impact of the closure, particularly on low-income families. They conducted a community survey that found 1 in 4 Troy residents didn’t have access to a car and would have trouble getting to Albany.

The campaign drew on deep connections that many residents had to Burdett. “They realized what a gem Burdett is, and what a great community service they provide,” said Jessica Hayek, a doula and birth educator who helped lead the campaign.

Jessica Hayek, a doula and birth educator, helped lead the campaign to stop Trinity Health from closing the Burdett Birth Center. She says Michigan-based Trinity didn’t appreciate how important the center was to the Troy community. (Hannah Norman/KFF Health News)

Hayek and others also tapped into deep-seated frustration with Trinity, a healthcare behemoth that operates 91 hospitals and last year recorded more than $25 billion in revenue and a healthy operating margin that topped 5%.

“Trinity Health is in the Midwest, and they are not in the community,” Hayek said. “So when you’re looking at just the numbers from an office in the Midwest somewhere, they’re not looking at the benefit that this place has on the community.”

Hayek describes herself as a liberal Democrat. But Trinity’s focus on its bottom line also irked many Republicans, including Mantello, who was the City Council president at the time.

“The whole hospital scene has changed,” Mantello said. “It was very personable. You had nurses and doctors who were able to give more care and spend more time with patients.” Now, by contrast, many hospitals have what she described as a “more corporate type of atmosphere.”

Even the Catholic bishop decried the planned closure of the birthing center as out of step with the values of his faith and the hospital system’s.

“Nothing is more central to the Catholic healthcare mission than supporting life and all those who bring it into the world,” Bishop Edward Scharfenberger said after Trinity announced the closure plan. Scharfenberger has since retired.

A Bipartisan Solution

Despite the backlash, Trinity Health executives for months insisted they had no choice. The system even sued the state to push through the closure.

Ultimately, though, powerful state officials, including New York Attorney General Letitia James, a Democrat, joined the fight to save the birthing center, launching an investigation into the proposed closure and hosting a daylong hearing in Troy.

State Assembly member John T. McDonald III, a Democrat who represents Troy, worked with Republican elected officials, including the county executive and the state senator representing Troy, to secure $5 million in state funding to help keep Burdett open.

 “You had a Democrat and a bunch of Republicans all working together on the same issue,” McDonald said, “because, at the end of the day, our job is to listen to what the public has to say.”

Community leaders, politicians, midwives, doulas, and families from Troy rallied for months to stop the Burdett Birth Center from closing, including at the state Capitol in Albany. (Katherine Bruno/Upper Hudson Planned Parenthood) Community volunteers in Troy celebrated the success of their campaign to save the Burdett Birth Center by adding a yellow tag to the pink protest signs. (Hannah Norman/KFF Health News)

Nearly a year after announcing the closure, Trinity reversed itself and said Burdett would remain open.

Lois Uttley, a New York City-based researcher and activist who has worked with communities facing hospital consolidation, said Troy’s success reflects a growing bipartisan suspicion of corporate healthcare organizations.

“The executives of these health systems will tell the community that joining a big health system will be good, that the quality of care will improve, that efficiencies will mean they can keep the costs low,” Uttley said. “But what I have seen over the last 30 years of work is that those promises often are broken.”

As hospitals close or downsize, she said, communities are catching on. “They’re becoming more skeptical.”

There’s another, more hopeful lesson in Troy’s success, said McDonald, the state lawmaker.

“If we take down our swords,” he said, “and put out our arms, maybe we can get something done.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

AUSTIN, Texas — Musician Zack Morgan jokes that when he lost his corporate job in 2015, it was like being pushed off a cliff. For years, he said, he’d been playing both sides of the Austin coin: tech worker by day, funk keyboardist by night.

“Maybe this is my sign to try the full-time music thing,” Morgan recalled thinking. “Step one in that was: Get health insurance again.”

Austin bills itself as “the Live Music Capital of the World,” but it can be unaffordable for the artists who provide the city with its cultural cachet — and help drive its tourism revenue.

Morgan has supported himself by patching together gigs with a number of bands. To help pay for health insurance, he turned to a local nonprofit, the Health Alliance for Austin Musicians, or HAAM.

“That’s part of being able to make this whole thing work,” Morgan said.

HAAM subsidizes the monthly insurance premiums of local musicians who purchase plans through the Affordable Care Act marketplace. To fund the roughly $4 million program, it works with Central Health, a public agency that provides healthcare resources for low-income residents of Austin and surrounding Travis County. Many of the performing artists pay $0 toward monthly premiums.

After more than a decade, including through the coronavirus pandemic, the assistance program has become an established and reliable financial support for Austin’s musician community.

This year, after Congress failed to extend pandemic-era subsidies, premiums skyrocketed for many ACA plans. A recent report found that 5 million people nationwide had dropped the coverage. HAAM helped blunt the impact for its members. It has emerged as a potential model for other cities hoping to make healthcare more affordable for key populations and industries.

Morgan plays keyboard with pop singer Ruthie Craft at the Saxon Pub in Austin on July 27. (Ysa Mendoza/KUT News)

A Growing Idea

Texas had the highest uninsured rate among states, with 19% of people age 64 and under uninsured, as of 2024.

Even before the launch of the ACA marketplace in 2014, HAAM had spent a decade connecting musicians with free and low-cost care at clinics and hospitals in and around Austin. But roughly 85% of HAAM members remained uninsured, leaving them exposed when traveling to gigs in other cities and states.

“When the Affordable Care Act came out, and we knew it was here to stay, it really made sense for us to start getting our musicians fully insured,” said Rachel Blair, HAAM’s chief strategy officer.

Similar nonprofits in other U.S. cities with strong live music cultures, such as Seattle, New Orleans, and Nashville, Tennessee, help musicians get medical care. With the advent of the ACA, some of these organizations began helping musicians navigate the sometimes complex enrollment process for the online marketplaces, though they stopped short of pitching in on premiums.

But the team at HAAM recognized that without direct support to help pay premiums, many of their members would still struggle to retain coverage.

“When you think about the average HAAM member making about $30,000 a year, there’s no way that they would be able to spend a third of their income on healthcare,” Blair said.

The organization’s membership has grown by 77% to more than 3,300 people since HAAM began offering premium assistance, and more than 90% of members are now insured.

To help subsidize costs for members, HAAM partnered with Central Health, which is Travis County’s public hospital district — a type of health agency in Texas charged with using tax dollars to fund safety net healthcare for low-income residents. Central Health also operates the nonprofit Sendero Health Plans, which offers marketplace insurance to Travis County residents.

To qualify, HAAM members must enroll in one of Sendero’s silver-level, or benchmark, plans. If their income is between one and two times the federal poverty level, Central Health pays the balance of their monthly premium after federal tax credits are applied. For members who fall above that income range, HAAM offers a more limited subsidy, covering 50% of their premium balances.

Each year, the Health Alliance for Austin Musicians hosts the HAAM Day Music Festival, its annual event to raise money to help local musicians afford insurance premiums and other healthcare services. Bands play in common spaces across the city, from grocery stores to the Texas Capitol steps. (Shunya Carroll/KUT News)

In 2017, HAAM helped set up a similar program in Denton, a college town north of Dallas that has served as a testing ground for successful musicians, from Meat Loaf to Norah Jones.

The Denton Music and Arts Collaborative works differently: It connects members with an independent insurance agent who helps them find the best health plan for their needs. The nonprofit then offers members a monthly subsidy of $100.

The subsidies are a way of keeping Denton’s culture of jazz and “weird art rock” alive, said the collaborative’s president, Jennifer Kapinos.

“More and more people were maybe graduating college and leaving and going to find better opportunities in other places,” Kapinos said. “People who had lived here a long time suddenly were finding it harder and harder to afford to be here.”

In Austin, other sectors have been watching HAAM’s work. In 2025, Good Work Austin, a nonprofit that advocates for restaurant workers, launched a small pilot program with Central Health to help local food workers enroll in Sendero plans and cover their premiums.

Kit Abney Spelce, vice president of operations for Central Health, said partnering with an advocacy group focused on a particular workforce is key because simply announcing “free insurance for you” doesn’t mean people will sign up.

“We are very much dependent on our partner entity to go out and connect with the community, to have that relationship and that trust,” she said.

Navigating Federal Headwinds

Though premium payments often increase year over year, the 2026 plan year was particularly expensive, increasing by 58% on average.

Citing medical and pharmacy costs, Sendero raised rates by an average of 16% for its enrollees. At the same time, Congress allowed the pandemic-era enhanced premium tax credits to expire, reducing the federal subsidies that many marketplace customers relied on.

“Our premiums for our members went up 60% from one year to the next,” Blair said.

HAAM stepped up its fundraising into 2026, but it wasn’t enough to cover everyone who requested assistance. They had to turn away hundreds of qualified people. Still, they were able to buffer existing members, said Spelce with Central Health.

“We’re going to make sure their monthly premium is paid every month,” she said.

Austin-based Latin-folk singer Gina Chavez plays on the steps of the Texas Capitol in 2025 for the HAAM Day Music Festival, an annual fundraiser for the Health Alliance for Austin Musicians. (Shunya Carroll/KUT News)

A Viable, if Limited, Model

Beyond the eligible musicians they turned away in 2026, another population remains out of HAAM’s coverage reach for premium assistance: Austin’s poorest residents.

Under the ACA, the marketplace plans that HAAM helps subsidize are for low- and middle-income earners, but the people with the very lowest incomes — below 100% of the federal poverty level, set at about $15,000 — are supposed to be covered by expanded Medicaid.

But Texas is one of 10 states that chose not to expand Medicaid after the ACA became law, so many of the poorest Texans remain uncovered.

With no federal subsidies available for that group, HAAM and Central Health have tried to develop separate solutions for this subpopulation. Central Health has its Medical Access Program, an alternative to health insurance that gives low-income, uninsured people access to a network of local care providers. HAAM has also established relationships with primary care providers to serve its uninsured members — but Blair acknowledges it’s not an equivalent benefit to what Medicaid expansion would offer.

“It’s not a very sustainable solution, especially when there’s a really good alternative,” Blair said.

This article is from a partnership that includes KUT, NPR, and KFF Health News.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

A group of Democratic lawmakers is calling for the Trump administration to suspend a new surveillance program it quietly launched to collect the personal and identifiable health data of Americans who visit emergency rooms.

KFF Health News first reported that the Consumer Product Safety Commission — a federal agency tasked with monitoring injuries from household items — was pressuring hospitals to provide a private company with personally identifiable health information for analysis. The rollout of the program has inspired broad pushback from hospitals and privacy advocates.

The CPSC’s goal is to obtain millions of Americans’ medical records from emergency rooms for most injuries, even when a consumer product is not involved, internal emails and documents reviewed by KFF Health News revealed. The agency instructed hospitals to share detailed patient information for more than 10,000 types of injuries or conditions, such as vaccine reactions, suicide attempts, or stingray stabs.

The scope of data CPSC is collecting far exceeds the agency’s mission and should be immediately suspended, Massachusetts Sen. Ed Markey, who sits on the Senate Health, Education, Labor, and Pensions Committee, and other House and Senate Democrats wrote in a letter to CPSC acting Chairman Peter Feldman.

“This unprecedented and sweeping effort to collect identifiable patient data is untethered from the Commission’s statutory mission and authority, and is ripe for misuse by an administration that has repeatedly sought access to Americans’ most personal information,” the letter stated. “Americans should be able to seek medical care without fear that their personal health information will be swept into a federal database and repurposed for political ends.”

Among other Democrats signing the letter were Sen. Richard Blumenthal of Connecticut, Rep. Jan Schakowsky of Illinois, and Sen. Ron Wyden of Oregon, the ranking member of the Senate Finance Committee.

CPSC spokesperson Steve Roney did not answer several questions about the program and the call for it to be suspended.

“We received the letter, and will respond directly, through the appropriate channels,” he said in a statement.

The CPSC is one of several agencies that have launched broad acquisitions of Americans’ sensitive medical records during Trump’s second term. The Office of Personnel Management has requested federal workers’ sensitive health information. Health and Human Services Secretary Robert F. Kennedy Jr. deputized at least one private organization to collect more medical records for his studies on vaccines and autism.

The CPSC has operated a voluntary program for decades that enables trained hospital workers based in about 70 hospitals nationwide to report injuries involving consumer products, called the National Electronic Injury Surveillance System, or NEISS. Compared with the current initiative, the agency’s data collection has historically been far narrower, and previously requested patients’ identifiable information, generally for follow-up, in fewer than 1% of cases.

Without public notice, CPSC staffers overhauled the program early this year — rebranding it as NEISS-R — and told hospital executives that participation is mandatory, requiring they report far more identifiable patient details from more injuries to a private company called Konza Health. The Kansas-based company won a five-year contract last year worth up to $15.9 million with the CPSC.

In emails and contract language reviewed by KFF Health News, Konza representatives described hospital participation as “mandatory” or “required.” Emails sent this year by CPSC chief data officer Elizabeth Puchek said hospitals would need to apply for an exemption from participation or face penalties. Those penalties, for what’s called unlawful “information blocking,” were established in a federal data-sharing regulation designed to make sure patients could access their medical records. The agency’s website reiterated that threat, claiming information-blocking regulations require hospitals “to make electronic health information (EHI) available to public health authorities, such as CPSC, upon request, unless a specific exception applies.”

The power play inspired widespread resistance. The American Hospital Association sent a letter in August asking for modifications to the program, citing “confusion and concern about the scope of patient information” demanded by the agency.

Now the agency is backtracking, removing in recent weeks mentions of “information blocking” penalties from its public page.

The CPSC’s Feldman, a Trump appointee, said in an interview last month with Nextgov/FCW that the new program would “remain a voluntary” one.

The Democrats highlighted these discrepancies and changes, also noting that the agency has bypassed regulations and failed to publicly lay out any detailed plan for its data collection, as required by law.

“The Commission has since quietly removed the information blocking rationale from its public NEISS webpage, without any public correction or acknowledgment that the claim it spent months promoting was without basis,” the letter said. “This reversal does not undo the coercion hospitals experienced, but rather raises the question of whether the Commission’s purported legal justifications were ever more than post-hoc cover for an agenda that had little to do with its statutory authority.” The Democrats’ letter asks CPSC to respond by Sept. 18.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

In the thick of his competitive reelection race in Michigan, Republican Rep. Tom Barrett joined Health and Human Services Secretary Robert F. Kennedy Jr. at a sprawling 400-acre apple orchard, farm, and winery. They touted Trump administration efforts to improve the American diet, including the removal of some artificial dyes from processed foods.

“We had a great discussion about healthy options for all Americans and taking back control of our healthcare,” Barrett said in a June Instagram post, after sampling the farm’s apple cider.

Like the focus on artificial dyes, however, many of the administration’s highest-profile health initiatives rely on voluntary agreements. The goals, such as lower drug prices and nutrition classes for doctors, have widespread appeal, cutting across party lines and economic divisions.

But the administration-industry deals lack the enforcement teeth of more traditional federal regulation. Their details are vague, and minimal oversight makes it hard to monitor progress. In some cases, the administration has claimed victories that have yet to materialize.

Republicans consider the dealmaking a winning strategy. It fits with the party’s anti-regulatory stance, they say, and enables the administration to quickly forge agreements President Donald Trump and his allies can tout as accomplishments. In the run-up to the midterm elections, some, like Barrett, hope to woo voters by trumpeting the Trump administration’s efforts to shape health policy.

The practice also raises questions. Though the deals are announced with great fanfare — often during televised events on stages, with live audiences — there’s little documentation or follow-through, creating doubts about whether the administration’s health agenda will lead to lasting change or unravel once the political attention fades.

The distinction could prove important to voters as Republicans defend their health records in November’s midterm elections.

“These deals are often not transparent, so there’s no way for the public to judge how meaningful they are,” said Larry Levitt, executive vice president for health policy at KFF, a health information nonprofit that includes KFF Health News.

Dealing With Dyes

The push to remove certain artificial dyes from food and drugs, for example, was a headline grabber. In April 2025, Kennedy strode onto an HHS stage to announce deals with food makers. He was flanked by young children and mothers holding placards reading “Make America Healthy Again.”

He and former FDA commissioner Marty Makary drew a standing ovation from an audience selected by Kennedy’s staff as they said companies had pledged to phase out all petroleum-based synthetic dyes from the nation’s food supply and medicines. They targeted nine synthetic dyes for removal.

Voters love the idea of stopping the use of such dyes. In a nationally representative March survey by Consumer Reports, 72% of adults said they were at least somewhat concerned about synthetic dyes, and two-thirds said companies should be required to phase them out.

A year after making the first announcement at HHS, Kennedy declared victory during a discussion at the Conservative Political Action Conference, an annual political event.

“We’ve gotten rid of the nine synthetic-based food dyes,” he said.

Not quite. At the initial HHS event, federal officials said companies would voluntarily stop using six specific synthetic dyes by the end of this year. (The administration has also revoked or proposed revoking authorization for two other synthetic food dyes.)

Later, the FDA on its website quietly changed the deadline to the end of 2027. So, most are still in use.

In fact, the FDA posted a list of 27 companies it said had made voluntary pledges as of December 2025 to remove six synthetic dyes from products such as Doritos and Kellogg’s Froot Loops. More than a year and a half later, seven food makers — fewer than 30% of those who bought in — had met their promised goals.

Many major food makers, such as the Coca-Cola Co. and Unilever, have made “no concrete commitments” to remove the synthetic dyes, according to Consumer Reports. In addition, no pharmaceutical companies have publicly said they have plans to remove dyes from drugs.

“It’s just all talk,” said Leslie Dach, who chairs Protect Our Care, a healthcare advocacy group that supports the Affordable Care Act. “They just govern for a day of publicity, and then it’s over. None of it happens. Yet the people don’t know because they have busy lives, so they think, ‘Just look at all these initiatives.’”

In fact, the administration loosened labeling requirements, allowing companies to say their products contain no artificial colors — as long as they don’t use petroleum-based dyes. Previously, food makers could not make that claim unless their products contained no added colors. Some food dyes made from natural ingredients can contain contaminants and may pose their own health risks, such as diabetes.

“The federal government hasn’t taken any regulatory action on food dyes, for the most part, since the beginning of this administration,” said Melanie Benesh, vice president for government affairs at the Environmental Working Group, an advocacy group.

HHS said the voluntary approach has yielded significant action, including commitments to remove synthetic dyes from products sold in schools for the 2026–27 school year.

“HHS and the FDA are moving forward with clear timelines and concrete industry commitments, with major changes expected in foods served in schools during the coming school year and across full product portfolios by the end of 2027,” HHS spokesperson Emily Hilliard said in an email.

At the same CPAC convention event, Kennedy said “the MCAT testing companies are going to put nutrition on the MCAT for the first time, so the students will actually want to do it.” MCAT refers to the Medical College Admission Test, an exam required for admission to medical schools.

Again, not quite.

The Association of American Medical Colleges administers the MCAT. Spokesperson Stuart Heiser said Kennedy misspoke and may have meant to refer to a test taken by students to be licensed as doctors.

An Insurance Deal Falls Short of Promises

Kennedy again took to the HHS stage in June 2025, this time with Centers for Medicare & Medicaid Services Administrator Mehmet Oz, to make what was billed as a game-changing announcement. Major insurers, they said, had agreed to reduce the volume of healthcare services subject to prior authorization, a practice widely used by the insurance industry that often requires patients or their medical teams to seek preapproval before undergoing treatment.

The administration said 80% of insurers pledged changes to preauthorization requirements for 80% of diseases and injuries by January 2026. The administration also promised “public dashboards” to track progress.

“It will happen very quickly,” Oz said at the event. “Necessary care will be delivered when it’s needed, in the right way.”

As of July, months past that January target date, health plans had reduced prior authorization for medical services by about 11%, according to AHIP, the insurer trade group. But no public dashboards have debuted to track the deal, and some insurers that signed the pledge last summer told KFF Health News this year that they will not implement all the promised reforms as outlined by AHIP.

Hilliard did not respond to questions about the pace of progress.

The American Medical Association, in a 2025 web-based survey, asked 1,000 practicing doctors whether they believed the voluntary pledges would make a meaningful difference. Only 1 in 3 said they believed they would.

Insurers made a similar promise in 2018, during the previous Trump administration. The next year, more than 80% of doctors said the number of prior authorization requests for drugs and medical services had been increasing, based on another AMA survey.

Meanwhile, the administration is testing an artificial intelligence-powered prior authorization system for Medicare, the federal health program for people 65 and older or with disabilities. In six states, Medicare beneficiaries must get preapproval for a few treatments that CMS considers to have little clinical benefit and to be susceptible to fraud or waste, including skin substitutes and knee arthroscopy for arthritis. The program began in January, the same deadline insurers had set for curtailing preauthorization delays.

Deals and Deregulation

The healthcare industry’s voluntary agreements appeal to voters who feel government regulation drives up costs and places unnecessary burdens on businesses, some supporters say.

“Secretary Kennedy is the antithesis of a public health industry that uses coercion over communication — and has demonstrated this by taking the time and effort to push voluntary initiatives over the typical approach of governmental mandates,” said David Mansdoerfer, a political consultant who was a political appointee at HHS in Trump’s first term.

But voluntary agreements with the health industry can prove ineffective. Former President Jimmy Carter in 1977 proposed a legislative plan to curb rising hospital costs. Hospitals fought back, and Congress rejected the proposal, instead favoring a voluntary approach desired by the industry. It ultimately failed once public attention faded.

One upside: Deals are fast. Enacting a federal regulation can take two to three years. And some health analysts say the tempo of the agreements advanced by Kennedy and Trump may help take voters’ attention off the Trump administration’s inability so far to produce a long-promised health plan.

Instead, Republicans can point to the array of accords reached with industry, including the administration’s voluntary arrangement with drugmakers to cut prices so they’re in line with lower amounts charged in peer countries. The White House calls it the “most-favored-nation” prescription drug pricing policy.

Seventeen companies, including Pfizer and AstraZeneca, announced agreements with the administration to lower prices for Medicaid enrollees and cash-paying consumers using TrumpRx, a narrow, government-run consumer platform.

Many details remain unknown, but the lower prices apply only to new drugs and existing drugs available through Medicaid. And prices at TrumpRx aren’t as low as out-of-pocket prices for most consumers with insurance. But the voluntary deals appeal to an industry that has railed against mandatory approaches drugmakers deride as harmful price controls.

“Each company makes its own decisions about how it prices medicines, and our industry is committed to working with the Trump administration to ensure Americans have access to affordable medicines,” said Chanse Jones, a spokesperson for PhRMA, a pharmaceutical industry trade group.

Policies that lead to reductions in drug prices typically worry investors because profits also can drop. But rather than seeing their stock prices fall after the agreements were announced, the drugmakers saw largely positive market reactions.

Analysts say that’s partly because the deals are narrow in scope, largely exist only in principle, and don’t apply to existing drugs used by the more than 200 million Americans with commercial or private health insurance.

The Trump administration, however, is claiming success.

“The most-favored-nation agreements on drug prices that we just did are delivering the largest drug price cuts in history,” Trump said in June at a Mack Trucks plant in Pennsylvania. “That alone should win us the midterms.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

One year into its creation, a $50 billion federal program aimed at improving rural healthcare lacks transparency, which could make it difficult to protect against fraud, identify successful projects, and ensure the program delivers on its promise to transform the system.

Transparency “is really important to help protect the integrity of the program, ensure funds are reaching the communities they’re meant to serve,” said Maya Sandalow, director of health policy for the Bipartisan Policy Center, a nonprofit think tank.

The federal government and states are compelled by public records laws to share documents when requested. But those requests can take months to fulfill, making their release too late for meaningful oversight as states rush to spend their allotments under tight federal deadlines.

In the meantime, the Centers for Medicare & Medicaid Services — which oversees the Rural Health Transformation Program — and some states aren’t proactively sharing information about where the funding is going and how it will be used.

CMS spokesperson Timothy Foster said the agency “will publish an annual report on state progress.”

States’ individual reports to CMS are “intended to be” shared upon request, but the agency won’t be proactively publishing the individual state reports, according to a CMS document.

Foster didn’t respond to questions about whether the agency will share examples of projects that are and aren’t working or create a tracker of funding recipients, award amounts, and what organizations plan to do with their funding — ideas that health and government transparency advocates have requested.

Instead, much of the program’s transparency thus far has been up to state governments, and “the level of details that states have publicized really varies,” said Sandalow, who co-wrote a recent paper on how the federal government can strengthen the rural health program, including through transparency.

Some states are sharing information with lawmakers, holding public meetings, and explaining where organizations plan to invest their money.

Others are more secretive, with multiple states declining to release public records in response to KFF Health News’ requests. Mississippi’s governor vetoed a transparency-related bill, West Virginia holds closed-door advisory meetings, and a South Dakota official wrote that he hoped CMS would keep its application from public view.

“I just don’t believe in all this secrecy,” said Mississippi state Sen. Hob Bryan, who chairs his chamber’s public health committee. “If they’re not up to something nefarious, why do they have to do it all in secret?”

Bryan, a Democrat, said there’s bipartisan concern about the lack of transparency in his state.

Reaching Rural Patients

Congressional Republicans created the five-year Rural Health Transformation Program last summer as an eleventh-hour sweetener to President Donald Trump’s signature One Big Beautiful Bill Act. The money was intended to offset concerns about the outsize fallout anticipated in rural communities from the law, which is expected to reduce overall Medicaid spending by more than $900 billion over a decade.

Sandalow said some states may be struggling to share information since they’re busy rushing to hire staff and meet the program’s tight deadlines, including an annual report due Aug. 31.

In the meantime, a slew of media outlets, nonprofits, and businesses are stepping in to make it easier for the public to track the rural health program.

KFF Health News is collecting states’ applications and approved plans and budgets, not all of which have been posted on state websites.

Rural Health Payout Tracking Applications for Rural Health Transformation Funds

KFF Health News is working to collect and post complete application materials, by state, here and will update this repository as new materials, released in response to public records requests, arrive.

Dec. 4, 2025 Rural Health Payout Tracking State Rural Health Transformation Plans

KFF Health News is working to collect and post approved plans as more states respond to emails and public records requests for their documents.

July 27, 2026

And several health nonprofits and companies have created trackers that describe states’ rural health initiatives, post funding opportunities, or list award recipients. But some resources are available only through paid services, aimed at helping businesses interested in applying for money.

Sandalow said previous federal programs “tend to draw attention for gaps in transparency and oversight rather than for doing it well.”

As an example, she pointed to the lack of oversight and transparency with the CARES Act and other covid relief programs, which saw fraud and improper payments.

In March, CMS published proposed quarterly and annual state reporting requirements for the rural health program, and a notice seeking comments. At least three groups replied with letters expressing concerns about transparency.

CMS should share states’ progress reports, funding recipients, and what organizations plan to do with their awards, wrote Zachary Gaumer, the Bipartisan Policy Center’s vice president for health policy.

Sharing this information would make it easier to track progress, identify successful programs that other states may want to replicate, and “ensure funds reach the rural communities they are intended to serve,” he wrote.

Molly Smith, group vice president for public policy at the American Hospital Association, asked CMS “to be as detailed as possible” about the “final destinations of these funds, given the complexity of the grant funding process.”

In her letter, Charlene MacDonald, who leads the Federation of American Hospitals, noted that some funding recipients, such as large health systems and academic medical centers, will be distributing their awards to other entities.

CMS should collect those “downstream subrecipients,” wrote MacDonald, whose group represents for-profit hospitals and healthcare systems.

Without this information, she said, it will be difficult to know if “funding is reaching the rural hospitals, providers, and communities primarily intended to benefit from the program.”

It can also be difficult to know which for-profit companies are being paid with rural health money.

For example, Nevada and Kansas have listed hospitals and other health facilities that received funding to purchase telehealth, scanning devices, and other health technology. But the states list only some of the companies from which recipients will buy those products.

States won’t have to report “downstream” funding in their August reports to CMS but will have to do so for all future reports, according to the agency’s recently finalized reporting requirements.

The CMS documents say states must list subrecipients that receive subawards as well as vendors or contractors paid by an organization using rural health funding. Although states must report how much money these downstream recipients receive, they don’t have to describe which specific services or products the recipient is providing.

DIY Dashboards

As groups ask CMS to share more information, some states have created their own rural health spending dashboards or recipient lists, with varying levels of detail.

Alaska, Kansas, Oklahoma, and other states list which organizations receive funding, their award amounts, and detailed descriptions of how recipients will spend the money.

Florida and Nebraska, however, are among the states that don’t share what awardees plan to do with their funding.

New Hampshire is posting recipient contracts that detail projects and their budgets on its Rural Health Transformation Program website. Some other states have uploaded contracts and grants on general procurement or award databases, which can be difficult to navigate.

Ohio, Virginia, and New Jersey have used press releases to announce awards. But the announcements aren’t posted on their Rural Health Transformation Program websites, which could make it difficult to find this information.

Many states created advisory groups to provide transparency and accountability for their programs. Most committees host public meetings and upload minutes, recordings, or other materials from the discussions.

But the West Virginia Department of Health won’t share what’s discussed in its rural health advisory panel’s closed-door meetings, according to spokesperson Gailyn Markham.

“The panel is intended to serve as an informal forum for discussion and feedback among invited participants and program staff,” Markham said.

South Dakota, North Dakota, and Mississippi are among the states without advisory committees.

In response to public records requests, South Dakota released a nearly completely redacted version of its budget for the rural health program while Mississippi declined to release its budget.

Mississippi’s governor said he vetoed a transparency-related bill because it would “create an unnecessary layer of bureaucracy” that would have slowed the award process, which could cause the state to lose out on future funds. Mississippi is “an incredible outlier in all this secrecy,” Bryan, the state lawmaker, told KFF Health News.

Sandalow said it’s important for states to publish the impact of their rural health projects, adding that CMS should share which rural health projects are and aren’t working.

She said national and state health organizations are creating networks and holding conferences to help spread this information. States should “be able to learn from each other, get a sense of lessons learned and best practices, and then be able to pivot their initiatives accordingly,” Sandalow said.

Michael Cannon, who oversees health policy studies at the libertarian Cato Institute, said people should know how their $50 billion in taxes is being spent on the rural health program, and whether state projects are making rural patients healthier.

If investors put that much money into a project, there is “no way” they “would let the recipients of those funds get away with the shoddy approach to transparency and accountability that the states are taking,” he said.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

California is weighing stiff penalties for hospitals and other healthcare entities that don’t stay under state spending limits, potentially levying hundreds of millions of dollars in fines if these providers don’t take steps to rein in rising healthcare costs.

If the state Office of Health Care Affordability adopts the fines next week, hospitals, medical groups, insurers, and others could face penalties that amount to as much as 125% of the total they spend above the state’s annual growth targets.

The penalty proposal comes after healthcare entities in California were asked to limit growth by 3.5% last year and ramp down to 3% by 2029. Seven hospitals that state officials consider particularly expensive face even smaller growth targets: 1.8% in 2026, dropping to 1.6% by 2029.

Consumer advocates argue that state financial deterrents are critical to bring relief to millions of Californians struggling with high insurance premiums and out-of-pocket expenses. Hospitals accounted for 40% of the increase in U.S. health spending from 2022 to 2024, compared with 11% from retail prescription drugs. But adding teeth to those targets sets up a fight with the powerful hospital industry, which has a pending lawsuit challenging the spending limits as unreasonable. Hospitals warned that they will cut back on vital services, including in emergency rooms, obstetrics, and behavioral health.

Healthcare industry representatives said the state affordability office hasn’t accounted for year-to-year volatility or other factors beyond the industry’s control, such as rising minimum wages, state earthquake retrofit requirements, and expensive new drugs.

“They’re building the plane while flying it,” said Ben Johnson, group vice president for financial policy at the California Hospital Association. “We know improvements in affordability are needed, but we have serious questions about how and about what the unintended consequences could be under OHCA’s rather stringent approaches.”

When calculating penalties, California regulators would consider various factors, including a healthcare entity’s financial situation, its market impact, and the gravity and number of offenses, according to a board presentation in June. And entities would first be given opportunities to implement performance improvement plans to bring their spending into line before penalties are imposed. For those that don’t comply, the board is considering penalties of $10,000 a day or a flat $500,000.

The penalties, which the affordability office’s eight-member board is required by state law to adopt, are slated for discussion, and a potential vote, at the board’s Aug. 26 meeting. The soonest healthcare providers would be subject to penalties is 2028, because it’s expected it will take two years to collect and publicly report spending data to measure against the 2026 targets. The state is still collecting data on how entities performed against the 2025 targets, which aren’t enforceable, according to Andrew DiLuccia, a spokesperson for the California Department of Health Care Access and Information.

States Set Targets

California is one of at least eight states that have set spending targets as part of an expanding effort to curb soaring healthcare spending across the nation. Connecticut, Massachusetts, Oregon, and Rhode Island have also authorized the use of some type of financial penalty. The specifics of each vary widely, although so far no state has applied them.

A survey last year by the California Health Care Foundation found that 4 out of 10 state residents said they had medical debt, and 6 in 10 reported that they or a family member had skipped or delayed medical care in the previous 12 months because of cost. Nationwide, about half of adults say it is difficult to afford healthcare costs.

After Rosalyn Book got stiches on her chin, the elementary school teacher received a $15,000 ER bill from a local hospital, despite having insurance. Many teachers in her district leave because they can’t afford the cost of healthcare and insurance premiums, she said.

“The healthcare charges are just insanity, and what we get as patients for the care, it’s not the best either,” said Book, president of the Monterey Bay Teachers Association. “If you’re a working, regular individual in terms of how much you make, the cost of living and especially the healthcare is just not doable.”

Meanwhile, hospitals are warning there’s a risk of more closures. According to Yale University’s Health Care Affordability Lab, 17 hospitals have closed in the state since 2016, compared with only six openings.

Hospitals and other healthcare providers have said the proposed multimillion-dollar penalties are too steep and could destabilize their operations at a time when they’re facing funding challenges, including massive federal cuts to Medicaid, the end of enhanced federal subsidies for Affordable Care Act plans, and a sharp rise in uninsured patients. The One Big Beautiful Bill Act, passed by congressional Republicans and signed by President Donald Trump last summer, is expected to reduce federal Medicaid spending by more than $900 billion — including by $30 billion in California — and increase the rolls of the uninsured in the U.S. by 10 million people over a decade.

Johnson said hospitals raise prices on commercial payers to offset the expense of treating uninsured patients, as well as patients on Medicaid and Medicare, which can reimburse care providers at rates that fall short of treatment costs.

In addition, said Anete Millers, vice president of legal and regulatory affairs at the California Association of Health Plans, tax increases on managed-care plans recently approved by state legislators to offset federal Medicaid cuts will force plans to increase their prices for consumers.

“Some spending pressures originate outside of the control of health plans and are the result of public policy decisions rather than underlying changes in healthcare utilization or efficiency,” she told the affordability office’s board at the June meeting.

Kristof Stremikis, the director of market analysis and insight at the nonprofit California Health Care Foundation, acknowledged that external forces can drive costs but said that plenty of unnecessary spending is within the healthcare system’s control, such as administrative waste and duplicative tests and procedures. Almost 25% of U.S. healthcare spending is considered wasteful, according to research published in JAMA.

Elizabeth Mitchell, a former Office of Health Care Affordability board member whose term ended in May, agreed.

“Every business has external challenges,” she said. “The hospital industry has not taken accountability to actually manage costs. I have heard those excuses for decades, and at some point, they have to make changes.”

First Step To Bring Down Costs

An analysis of five states with cost growth benchmarks, published in June, found that some have succeeded in modestly slowing healthcare spending, particularly those with enforcement mechanisms. However, spending growth in most states has still exceeded the targets set. 

Jeremy Vandehey, a consultant with the Peterson-Milbank Program for Sustainable Health Care Costs, said setting benchmarks and collecting data to analyze which entities meet them is only a first step. Armed with information about what and who is driving up costs, states are more empowered to take additional action, such as imposing penalties or regulating prices, to bring down costs, he said.

“I don’t think anybody in any state is declaring victory on healthcare costs, but I wouldn’t say that that means the programs are a failure,” Vandehey said. “In all of these states, there’s much more robust conversations happening about, OK, we haven’t solved our cost crisis, so we need additional action.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.