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Twice-Weekly Briefing
Friday, October 23, 2026
Issue 261023-74
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The MOC Brief
Health policy, priced and translated for self-funded plan sponsors
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In This Edition
Five developments from the past week, and what each one costs you.
| 1. | KFF's benchmark survey lands, and the worker's contribution outran the premium. | | 2. | A federal brief ties state hospital taxes to higher employer premiums. | | 3. | Prosecutors charge 15 people across several schemes, the largest billing private insurers $1.6 billion. | | 4. | Median net launch prices sit near $257,000, and a quarter of 2025 launches ran far higher. | | 5. | Five employers ask CMS and health plans to extend electronic prior authorization to self-funded plans. |
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| 1 · BENEFITS BENCHMARK · October 22, 2026 |
| Workers' Share of a Family Premium Rose 9 Percent This Year While the Full Premium Rose 5 Percent |
| KFF published its 28th annual Employer Health Benefits Survey on October 22, built on 1,937 interviews with non-federal public and private firms with ten or more workers. The average annual premium reached $9,804 for single coverage and $28,303 for family coverage, each up 5 percent over the last year, a $1,310 increase on the family figure. Covered workers contribute $1,672 toward single coverage and $7,471 toward family coverage, and KFF reports that family contribution is up 9 percent, or $621, from 2025. Over the same period KFF puts wage growth at 3.7 percent and general inflation at 2.7 percent. Seventy-one percent of covered workers are in self-funded plans, including 25 percent at smaller firms and 85 percent at larger firms, and 38 percent of covered workers in smaller firms are in a level-funded plan, which KFF describes as combining a relatively small self-funded component with stop-loss insurance that limits the employer's liability and transfers a substantial share of risk to insurers. |
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MOC Perspective
Your 2027 contribution strategy now has a public benchmark, and the two rates are what matter: one for the total premium and one for what the worker pays. Before you set the employee share, note that KFF also reports family premiums and worker contributions have risen at similar rates since 2021, 28 percent and 26 percent, so a single year of divergence is not yet a trend. If you are a smaller employer in a level-funded arrangement, the place to push is the stop-loss layer, because KFF notes level-funded plans may use health status in rating and underwriting and are not required to provide all of the essential health benefits that insured plans must carry.
What to do now
| ▪ | Benchmark your family premium, single premium and worker contribution against $28,303, $9,804 and $7,471 before you sign 2027 renewal paperwork. | | ▪ | Compare your single-coverage deductible to the $1,955 average KFF reports among workers who face one, and to the $2,624 small-firm average. | | ▪ | Ask your stop-loss carrier in writing, before January 1, what share of risk your level-funded layer actually transfers. |
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| Source: KFF, 2026 Employer Health Benefits Survey, published October 22, 2026, with the companion KFF news release of the same date |
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| 2 · PREMIUM DRIVERS · October 20, 2026 |
| A Federal Brief Priced the Average State Hospital Tax at 1.5 to 1.7 Percent of a Single Premium |
| The HHS Office of the Assistant Secretary for Planning and Evaluation published a brief on October 20 by Eden Volkov, Casey B. Mulligan and Ge Bai, examining how hospital provider taxes used to finance Medicaid move into employer-sponsored premiums. Its finding: the average state provider tax law, which typically taxed a hospital up to 3.5 percent of net patient revenue, resulted in an increase in employer-sponsored premiums of 1.5 to 1.7 percent, plus any spillover effect on interstate markets for provider resources. The estimate covers single coverage only, drawn from 448 state-year observations with 28 states observed over 16 years in the Medical Expenditure Panel Survey Insurance Component, and the authors chose single coverage to avoid picking up the effect of the 2010 dependent coverage mandate. The brief reports the premium effect appears one year after tax implementation. It also says that by 2026 most states had raised their rates, with 33 states imposing a tax above 3.5 percent of net patient revenue, which the brief elsewhere describes as a tax between 3.5 and 6 percent, and it projects that the 2025 Working Families Tax Cut may reduce those premiums by up to 2.2 to 2.5 percent by 2032 by lowering the safe-harbor threshold from 6 percent to 3.5 percent. |
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MOC Perspective
This is a line item you have been paying without seeing it. If your largest hospital contracts sit in a state that has pushed its provider tax above 3.5 percent of net patient revenue, part of your trend quote is a Medicaid financing decision rather than utilization, and your broker's renewal spreadsheet will not separate the two. Two cautions before you argue the number: the 2032 figure is a ceiling on a projection, not a forecast, and nothing in the brief says a self-funded plan escapes the pass-through.
What to do now
| ▪ | Identify which states hold your top five hospital contracts, then check each against the brief's list of 33 states taxing above 3.5 percent. | | ▪ | Ask your actuary to separate state provider tax pass-through from utilization in your 2027 trend quote before you sign. | | ▪ | Hold the 2.2 to 2.5 percent savings out of your budget, because the brief says up to and only when the change is fully implemented. |
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| Source: U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, Financing Medicaid Through Provider Taxes on Hospitals, published October 20, 2026 |
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| 3 · CLAIMS FRAUD · October 22, 2026 |
| Prosecutors Charged Five People in a Treatment Scheme That Billed Private Insurers $1.6 Billion |
| The Justice Department and the U.S. Attorney's Office for the Central District of California announced charges on October 22 against 15 defendants, six of them medical professionals, across a group of health care fraud schemes. The largest is alleged to have trafficked patients from around the country to Southern California and elsewhere for sham substance abuse treatment that was billed to private insurance companies to the tune of over $1.6 billion, which both offices call the largest case of its type ever prosecuted by the Department. Five defendants are charged in that scheme. Nathan Young, 39, David Young, 71, Honey Phipps, 42, and Cody Phipps, 36, face conspiracy to commit health care fraud and wire fraud, conspiracy to violate the Eliminating Kickbacks in Recovery Act, three counts of health care fraud and two counts of violating that Act, with the two Youngs facing further counts. The indictment alleges the Youngs recycled patients through their facilities to continue billing insurance, regardless of whether treatment was medically necessary or provided. The fifth, Nicholas Moore, 33, has pleaded guilty to a superseding information charging conspiracy to commit health care fraud and wire fraud, and admitted assisting the Youngs in submitting $199 million in fraudulent claims to insurance companies. |
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MOC Perspective
The largest of these schemes did not touch a government program at all. That money came out of private insurance, which means self-funded plans paying residential and outpatient behavioral health claims for members who traveled out of state. The other schemes announced the same day billed Medicare and Medi-Cal. Apart from the one guilty plea nothing here is proven, and the figure is what was billed rather than what was paid, but the alleged mechanism is one your own claims data can show you this week: the same member cycling through several facilities, and marketing or referral payments of the kind the Eliminating Kickbacks in Recovery Act reaches.
What to do now
| ▪ | Pull three years of out-of-state residential and outpatient substance abuse claims, and flag any member who appears at more than two facilities. | | ▪ | Ask your TPA in writing what screen it runs for patient brokering and kickbacks, and how many referrals that screen produced in the last 12 months. | | ▪ | Set a dollar threshold for out-of-network behavioral health review before your next plan year begins. |
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| Source: U.S. Department of Justice, Office of Public Affairs, press release 26-1248, October 22, 2026, with the parallel release from the U.S. Attorney's Office for the Central District of California |
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| 4 · SPECIALTY DRUG PRICING · October 20, 2026 |
| The Median Net Launch Price of a New Drug Reached About $257,000 After Rising 35 Percent Since 2022 |
| ICER and West Health published their annual launch price and access report on October 20. The median net launch price of drugs rose sharply, by 35 percent, from $190,000 in 2022 to $257,000 in 2025, adjusted for inflation, while the median list price rose 24 percent across the same period. About one in four drugs introduced in 2025 had an annual net price exceeding $500,000, two of them above $2 million, and an additional 34 percent launched at net prices between $200,000 and $500,000. The report is careful about direction: although this price decreased slightly, by 2 percent, between 2024 and 2025, it remained at historically high levels. Scope is novel agents approved by the FDA's drug and biologics centers from January 2022 through December 2025, excluding vaccines, blood or plasma based products, and imaging or diagnostic agents. These are estimated net prices, not transaction records. The report says no net price data submissions were received from manufacturers, and that actual net pricing data are not transparent and vary substantially among payers. |
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MOC Perspective
Your exposure here is the stop-loss attachment point, not the formulary tier. A single member starting a drug that launched above $500,000 a year can clear a $300,000 attachment point on their own, and a quarter of last year's launches sit in that range. The figures are modeled rather than contracted, so use them to set a review threshold rather than to argue a specific invoice, and read the 2 percent decline as a curve flattening at a high level rather than reversing.
What to do now
| ▪ | List every novel drug approved since January 2022 that your plan has paid for, and price each one against your stop-loss attachment point. | | ▪ | Require your PBM to flag any new-to-market drug above $500,000 a year before the first fill rather than in the quarterly report. | | ▪ | Build that flag into your January 1 formulary load, since 34 percent of 2025 launches carried net prices between $200,000 and $500,000. |
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| Source: Institute for Clinical and Economic Review and West Health, 2026 Launch Price and Access Report, published October 20, 2026 |
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| 5 · PRIOR AUTHORIZATION TECHNOLOGY · October 21, 2026 |
| Five Employers Asked CMS and Health Plans to Extend Electronic Prior Authorization to Self-Funded Plans |
| CMS and the Department of Labor announced on October 21 that five leading employers have signed a statement of support to make the technical improvements and other capabilities being developed through the 2025 Prior Authorization Pledge available to employers that sponsor self-funded health plans. The signatories are Amazon, Axon Enterprise, Inc., Google, Meta and Oracle Corporation. The statement is written in the voice of self-funded employers and grounds the request in ERISA, saying plan fiduciaries must ensure that they are prudent stewards of plan assets and resources. It urges HHS, CMS and the current pledge participants to make the capabilities they are developing immediately available to ERISA plan sponsors that fund their own plans, and says these employers are encouraging their TPAs to join the insurers that have already committed. CMS notes separately that its Interoperability and Prior Authorization Final Rule requires certain impacted payers to implement electronic prior authorization capabilities for medical items and services beginning January 1, 2027. Daniel Aronowitz, Assistant Secretary for the Employee Benefits Security Administration, is quoted on the release, CMS has set no deadline for other employers to sign, and it gives an address at ePAPledgeEmployers@cms.hhs.gov. |
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MOC Perspective
Read the January 1, 2027 date carefully. CMS says the rule reaches certain impacted payers and its release does not say which, so put the question to counsel rather than assuming either way. What is clear is that employers large enough to build their own benefits thought these capabilities were worth asking for in writing. Your TPA contract is where this actually moves, because nothing compels your administrator to extend the pledge's standardized electronic prior authorization, its reduced volume of services subject to review, or its real-time responses to your book unless you ask.
What to do now
| ▪ | Ask your TPA in writing, before you sign 2027 renewal paperwork, whether it will extend the pledge's electronic prior authorization capabilities to your plan and on what date. | | ▪ | Name the three service categories where prior authorization delays cost you the most, and put them in that request. | | ▪ | Email ePAPledgeEmployers@cms.hhs.gov to ask how to add your company to the statement of support, since CMS has set no deadline. |
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| Source: Centers for Medicare and Medicaid Services, press release of October 21, 2026, with the Employer Statement of Support posted on cms.gov |
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The Bottom Line
Four of these five land on numbers you will touch before January 1: the premium benchmark, the state hospital tax buried in your trend quote, the specialty launch prices your stop-loss layer absorbs, and the out-of-state behavioral health claims you have not yet sorted by facility. The fifth lands on your TPA contract, where nothing changes unless you ask, because CMS's January 1, 2027 requirement applies to certain impacted payers and the agency's release does not say whether a plan that funds its own benefits is one of them. The launch prices and the provider tax pass-through are both modeled, so use them to set review thresholds rather than to argue a specific invoice. Renewal signature is the real deadline, and every one of these is cheaper to raise before you sign than after.
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Jude Odu
Founder and Principal, Model Optimal Care
Author of Model Optimal Care: End U.S. Healthcare Waste, One Health Plan at a Time
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