CENTER UPDATE | OCTober 2025

In this Issue:

  • Outpatient Deductibles Surge and Drive Higher Patient Costs
  • Majority of Americans Still Shelling Out More for Care
  • Fewer Plan Choices and Higher Costs Ahead for Medicare Advantage in 2026
  • What Drives Beneficiaries to Switch Between MA and FFS Plans?
  • State-by-State Differences in Medicare Drug Cost Burden
  • Michigan Limits Medicaid Access to Weight-Loss Drugs
  • Some “Free” Preventive Services Cost Employers Over $1K
  • Administrative Burden Crippling Primary Care Efficiency

Outpatient Deductibles Surge and Drive Higher Patient Costs

Average outpatient deductibles for employer-covered enrollees more than doubled from $198 in 2012 to $404 in 2023, accounting for about 60% of outpatient out-of-pocket spending. Cost-sharing combined with premiums reached an average of $869 in 2023. Comparable data from the Health System Tracker show that outpatient costs have risen faster than wages and overall medical spending, underscoring growing affordability challenges for patients.

Outpatient Deductibles Surge and Drive Higher Patient Costs

A recent survey shows that 60% of U.S. adults say health care costs are a “very” or “extremely” serious problem, with people citing concerns about affording care, medications, and insurance coverage. The rising costs are influencing decisions on treatment and whether to seek care at all.

Fewer Plan Choices and Higher Costs Ahead for Medicare Advantage in 2026

A new memo from the Better Medicare Alliance analyzes the upcoming 2026 landscape for Medicare Advantage and finds the median maximum out-of-pocket limit will rise from $5,400 to $5,900, while the number of non-SNP plan options will drop by 335. A related analysis from Avalere Health shows the standalone PDP market will shrink 22%, and non-SNP MA-PD offerings will decline 9%. These trends signal fewer choices and greater cost exposure for Medicare beneficiaries next year.

What Drives Beneficiaries to Switch Between MA and FFS Plans?

A recent Health Affairs Forefront article identifies key factors influencing why Medicare beneficiaries move between Medicare Advantage (MA) and fee-for-service (FFS) plans. The study finds that changes in health status, provider network access, and plan cost-sharing rules are major drivers of switching decisions. It also highlights that beneficiaries who switch may face greater financial risk and unequal coverage protections under either option.

State-by-State Differences in Medicare Drug Cost Burden

The latest state scorecard on Medicare performance reveals major state variation in how much Medicare beneficiaries pay out-of-pocket for prescription drugs—about 4.5% of total drug costs in New York compared to 12.8% in North Dakota. This snapshot reflects broader disparities in access, coverage generosity, and cost-sharing across states.

Michigan Limits Medicaid Access to Weight-Loss Drugs

Michigan’s new bipartisan state budget restricts Medicaid coverage of GLP-1 weight-loss drugs to individuals classified as morbidly obese, effective January 1, 2026. The policy is expected to save $240 million as GLP-1 usage among Medicaid beneficiaries surged from 20,935 in 2021 to over 90,000 in 2024. V-BID Center director, Mark Fendrick, M.D., noted that limiting access to high-value therapies like these could undermine efforts to improve health outcomes while reducing long-term costs. Drugs such as Ozempic will still be covered for diabetes treatment, and the Michigan Department of Health and Human Services will notify affected beneficiaries in advance.

Some "Free" Preventive Services Cost Employers Over $1K

Certain preventive services that must be covered at no cost to patients under ACA rules are costing employers and insurers more than $1,000 each. Examples include HIV-prevention injections at nearly $3,900 per patient and some colon-cancer screening procedures at over $1,200. The Health Care Cost Institute found that preventive care costs vary widely by service and region, with lab tests and cancer screenings accounting for the majority of total spending.

Administrative Burden Crippling Primary Care Efficiency

A new brief from the Commonwealth Fund shows that primary care physicians are facing escalating administrative demands—such as excessive documentation, prior authorizations, and nonclinical inbox management—that divert time from patient care and contribute to workforce shortages. This burden is fueled by complex insurance rules, poor EHR usability, and the expansion of value-based programs. Recommended solutions include streamlining documentation, improving EHR workflows, and simplifying payer requirements to allow PCPs to focus more on care delivery.

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