Image Credit: eTom Williams / Contributor / Getty 
Shares of major health insurers – including UnitedHealth Group and CVS Health dropped like a rock on Monday following a Wall Street Journal report that the Centers for Medicare and Medicaid Services (CMS) plan to increase payments to insurance companies by just 0.09% on average next year – falling far short of analyst expectations of a 4% increase. For reference, insurers received a 5.06% increase for this year.
And while retail investors and other plebes are getting their mustaches punched off, Rep. Kevin Hern (R-OK), who sits on the House Subcommittee on Health (which works hand-in-glove with CMS on Medicare payment policy), had the amazing fortune to have sold his entire position in UnitedHealth on Dec. 23, valued between $250,000 and $500,000.
The House Ways and Means Subcommittee on Health is the House’s primary lawmaking body for federal health-care financing policy. In practice, it decides how the federal government pays for health care, who is eligible, and under what rules. One of its primary roles is oversight and legislation related to Medicare – governing payment policies for Medicare Parts A, B, C (Medicare Advantage), and D, including reimbursement rates for hospitals, physicians, insurers, and prescription drug plans.
To be clear, CMS proposes the annual rate proposals, while the House Ways and Means Committee and its Subcommittee on Health sets policy surrounding this. What typically happens is;
- Senior CMS and HHS officials brief key committee staff (especially Ways and Means and Senate Finance) shortly before release.
- These are staff-level or leadership-level heads-ups, not public meetings.
- The purpose is political and institutional management, not authorization.
CMS would have likely briefed political leadership just before holiday recess so members aren’t blindsided in January – particularly members of Ways & Means.
What a lucky duck!
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