V-BID Update: Affordability Pressures Reshape Coverage and Access to Care

In this Issue:

• CMS Expands Access to Catastrophic Health Insurance Plans
• Healthcare Costs Consume a Significant Share of Retirement Income
• Direct-to-Consumer Pharmacies May Reduce Costs for Generic Medications
• Employer Coverage Remains Primary Source of Insurance
• ACA Enrollment Declines as Premium Increases Drive Coverage Losses
• Post-Pandemic Telehealth Expansion Not Linked to Higher Spending
• UnitedHealthcare Major Reduction in Prior Authorization Requirements
• Cost Concerns and Mistrust Contribute to Rising Cancer Screening Gaps

CMS Expands Access to Catastrophic Health Insurance Plans

The Centers for Medicare & Medicaid Services (CMS) finalized policies that expand access to catastrophic health insurance coverage, which offers lower monthly premiums paired with higher deductibles. The rule, which allows the use of value-based insurance design for the first time in these plans, is intended to provide a lower-cost coverage option for consumers who are ineligible for premium subsidies or cost-sharing reductions and may be facing rising marketplace premiums.

Healthcare Costs Consume a Significant Share of Retirement Income

An analysis examining the financial impact of healthcare expenses on retirees shows that retirees spend an average of 16% of their monthly income on healthcare, meaning roughly 1 in every 6 retirement dollars goes toward medical costs. The survey also found that 58% of retirees expected Medicare to cover a larger share of their expenses, despite traditional Medicare lacking an out-of-pocket spending cap and often leaving beneficiaries responsible for significant costs.

Direct-to-Consumer Pharmacies May Reduce Costs for Generic Medications

Study findings show that for prescriptions with patient cost-sharing above $15, nearly 80% would have cost less if purchased through a direct-to-consumer pharmacy. Among prescriptions with the highest out-of-pocket costs, median patient spending was $140 through insurance compared with $25 through a direct-to-consumer pharmacy. The findings suggest that direct purchasing models may offer meaningful savings for patients facing higher prescription drug costs.

Employer Coverage Remains Primary Source of Insurance as Deductibles Become More Common

An EBRI analysis shows that employer-sponsored insurance remains the dominant source of coverage for privately insured adults, with 60% receiving health insurance through their own employer. The analysis also found that deductibles are increasingly common, with more than 75% of enrollees reporting a medical deductible, including 70% of those in traditional health plans. These findings suggest that exposure to upfront healthcare costs continues to expand beyond high-deductible health plans alone.

ACA Enrollment Declines as Premium Increases Drive Coverage Losses

A Wakely Consulting Group report estimates that average marketplace enrollment could decline by 17% to 26% in 2026, with about 86% of enrollees paying their first premium and significant variation across states. Researchers also found substantial shifts toward lower-premium plans, with Bronze plan enrollment increasing by nearly 11%, as consumers sought to offset higher costs. The report suggests that enrollment losses and changes in plan selection may lead to a less healthy risk pool and increased uncertainty for future premiums.

Post-Pandemic Telehealth Expansion Not Linked to Higher Healthcare Spending

A recent study examined whether expanded telehealth access after the COVID-19 pandemic increased healthcare utilization and spending. The analysis found that areas with higher telehealth adoption generally did not experience meaningful increases in healthcare spending or visit volume compared with areas with lower adoption. In fact, high-adoption areas had 2.4% fewer visits and 0.5% lower spending, suggesting telehealth has largely functioned as a substitute for in-person care rather than driving additional utilization.

UnitedHealthcare Plans Major Reduction in Prior Authorization Requirements

UnitedHealthcare announced plans to reduce prior authorization requirements. By the end of 2026, the insurer will eliminate prior authorization requirements for about 30% of services that currently require approval, including select outpatient surgeries, diagnostic tests, therapies, and chiropractic care. The company also reports that prior authorization currently applies to about 2% of its medical services, with approximately 92% of submitted requests approved within 24 hours.

Cost Concerns and Mistrust Contribute to Rising Cancer Screening Gaps

The 2026 Early Detection Survey examines barriers to routine cancer screening among U.S. adults and finds that 73% are behind on at least 1 recommended screening, up 4% from 2025. The findings highlight affordability and awareness as key challenges, with 35% citing cost as a reason for missing screenings and 34% reporting concern about screening costs, equal to the share worried about receiving a cancer diagnosis. Trust also emerged as a factor, with 19% of those behind on screenings citing skepticism of the healthcare system and nearly 50% of that group believing the system prioritizes profit over patient care. Half of respondents said affordable, predictable screening costs would increase their trust in the healthcare system.

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