The cost of prescription drugs is a top health policy issue for consumers and policymakers. Half of the people in the United States take at least one prescription drug, and KFF polling from 2025 found that more than 1 in 4 adults under age 65 report difficulty affording their medication; these shares are much higher among those with individual insurance and the uninsured. Aimed at addressing high prescription drug costs, on February 6, 2026, the Trump administration launched TrumpRx, a government website that provides prescription drug discounts to consumers. This Issue Brief examines issues that may impact consumers who access drug discounts through TrumpRx, particularly those with private insurance, and sets out key policy questions going forward.

In an effort to reduce prescription drug costs, a May 2025 Executive Order seeks to facilitate an option for consumers to purchase prescription drugs at the “most-favored-nation” (MFN) price directly from the drug manufacturer (“direct-to-consumer” purchasing). MFN prices refer to the lowest prices paid in comparable countries. The Trump administration announced that it had made deals with drug manufacturers and negotiated MFN pricing for a range of medications. The details of these deals are confidential and not available to the public.

TrumpRx is an online platform that consumers can use to search for discounted, ostensibly MFN, prices on brand-name medications when paying without using insurance (referred to as “self-pay” or sometimes “cash-pay”). TrumpRx does not offer direct-to-consumer (DTC) purchasing, meaning patients cannot purchase these medications from the TrumpRx website. Instead, for the majority of its advertised drugs, it allows consumers to print drug manufacturer coupons that can be used at retail pharmacies at the time of purchase. Many of the self-pay discounted prices shown on TrumpRx are also available via DTC options on the manufacturer’s website, but in most cases, this requires consumers to go to the manufacturer’s website, search for the drug, and find and interpret the written information describing the discount. Just eight of the advertised drugs on TrumpRx direct consumers to the specific pharmacies (often linked via the manufacturer’s website) where they can purchase the drug directly at the discounted price shown on TrumpRx. In all cases, a valid prescription is still needed to buy the medication.

As of February 20, 2026, 43 different prescription medications from five manufacturers were listed on TrumpRx, used in the treatment of a range of conditions, such as asthma, arthritis, infertility, and diabetes. The 43 prescription drugs currently listed on TrumpRx include one “authorized generic” (of a brand-name product from the same manufacturer) and one biosimilar; the rest are brand-name drugs. There are currently more than 24,000 FDA-approved prescription drugs in the U.S. Additionally, the terms and conditions listed on most of the TrumpRx coupons indicate that they cannot be used in California or Massachusetts. State law in California and Massachusetts prohibit the use of prescription drug coupons unless a generic equivalent is unavailable.

Drug discounts have been available for a long time, via different mechanisms and for different populations. From drug manufacturers, there are “copay assistance” coupons for people using private health insurance; free trial offers; discounts for self-pay consumers purchasing the drug directly; and “patient assistance programs” specifically for certain uninsured and/or low-income people. Separately, discounts are offered by several online platforms (such as GoodRx) and online pharmacies (such as Cost Plus Drugs).¹

TrumpRx presents one of many avenues for finding discounts on certain drugs. Specifically, those who are insured but choose not to bill through insurance, and those who are uninsured but don’t meet existing requirements for patient assistance programs (such as income), may now be eligible to use these coupons to get discounted prices from manufacturers for drugs included on the platform. While most TrumpRx coupons are also displayed on GoodRx, consumers will find discounts for many more prescription drugs from Cost Plus Drugs and GoodRx than are currently available on TrumpRx.

GoodRx has advertised “exclusive” savings for prescription drugs, including drugs listed on TrumpRx, long before TrumpRx launched. It is not clear how these and other self-pay discounts that drug manufacturers, retailers, or other third-party platforms were already offering before TrumpRx compare to what is available on this new platform. Such comparisons with historic prices are not readily available, but most of the savings from TrumpRx appear to be new. Archived GoodRx pages show that, for most of these drugs, prices available in 2025 or earlier were higher than currently advertised on TrumpRx. Manufacturers with drugs on TrumpRx began announcing their anticipated TrumpRx discounts in late 2025.² Self-pay discounts for certain dosages of Ozempic, Wegovy, and Zepbound were available prior to TrumpRx and before the Trump administration’s second term, but those prices were higher than their comparable prices now on TrumpRx. According to the manufacturer, the price for the 2 mg dosage of the Ozempic pen ”remains” $499, suggesting that the ”discounted” price shown on TrumpRx does not reflect any recent change.

For those paying with private insurance, many of these drugs already had “copay assistance programs” to help offset some out-of-pocket costs for the commercially insured (and still do). In many cases, out-of-pocket costs could be less than the TrumpRx self-pay discount. 

Evaluating the impact of TrumpRx requires a closer look at how most Americans access prescription medication. Sixty-six percent of people under age 65 have private health insurance, including 58% with employer-sponsored coverage and 8% with individual insurance purchased on or off ACA Marketplaces. Nearly all (99%) workers with employer-sponsored coverage are at a firm that provides prescription drug coverage to enrollees in its largest health plan. 

The discounts currently advertised on TrumpRx are only available to those purchasing medications without using insurance. The “Frequently Asked Questions” at the bottom of the TrumpRx landing page explicitly state that the discounted pricing is only available for “cash-paying” patients. The webpage for each TrumpRx drug notes that patients with insurance should check what their copay would be if using insurance, as it may be even lower than the TrumpRx price.

Due to the complexity of prescription drug pricing and the variation in private insurance plan designs, several factors need to be considered to evaluate the usefulness of TrumpRx for individual consumers. Three illustrative scenarios are provided below.

Patient has private insurance for a TrumpRx drug, and a generic equivalent is not available

Medication covered by an individual’s private insurance may be less expensive when purchased through insurance. Because TrumpRx coupons are for self-pay consumers, dollars paid for a TrumpRx medication will not count toward a consumer’s insurance deductible or out-of-pocket maximum. In contrast, individuals using private health insurance to purchase the drug instead of the TrumpRx coupon or other manufacturer discount will have their out-of-pocket payments count toward their plan’s deductible and out-of-pocket maximum. Since many of these drugs are used by individuals with chronic illnesses who need their medication throughout the year, the out-of-pocket expenditure may contribute significantly to the deductible and out-of-pocket maximum amounts for the plan, affecting the out-of-pocket costs for other services billed to insurance.

Individuals purchasing through insurance will also have access to a negotiated price through their insurer or employer plan. The “savings” listed on TrumpRx for each drug are based on the manufacturer’s list price for drugs sold to wholesalers or direct purchasers (“wholesale acquisition cost,” or WAC) and typically do not directly reflect what consumers pay. The negotiated prices vary across private plans but are typically lower than the WAC. In such a case, consumers could pay less over the year with their insurance, even having to meet a deductible. Specific cost-sharing arrangements, copay or coinsurance, for the drug depend on the plan formulary, but may also be cheaper than the TrumpRx price.

But deductibles matter. While many patients with private insurance could come out ahead in terms of their annual out-of-pocket costs by using their insurance instead of a TrumpRx coupon or other manufacturer discount for a specific medication, growing insurance deductibles for those with private insurance factor into patient choices and might steer people who have insurance to discounted self-pay options via direct-to-consumer (DTC) manufacturer websites or TrumpRx. 

According to the annual KFF Employer Health Benefits Survey (EHBS), among workers covered by employer-sponsored insurance, the average deductible for single coverage was $1,663 in 2025 (including those whose plan does not have a general annual deductible), 23% higher than the average general annual deductible in 2020 ($1,350), and 54% higher than in 2015 ($1,078). Average deductibles are higher for Affordable Care Act (ACA) Marketplace plans sold on HealthCare.gov, though growth over the past decade has increased more slowly than for employer-sponsored plans. In 2025, the average annual individual combined deductible (medical services and drugs) for ACA Marketplace coverage was $2,759. While this is lower than the average deductible in 2020 ($2,962), it is an increase from $1,987 in 2015.³

At least one study has found that for employer-sponsored insurance, out-of-pocket prices for branded retail drugs, on average, increased nearly 6% annually between 2007 and 2020, driven by large increases in deductible and coinsurance payments.

TrumpRx may be an economical option for those who face high out-of-pocket costs for prescription drugs before they meet their plan’s deductible, especially those who do not reach their annual deductible at all. If a consumer, for instance, must pay the retail price for an expensive medication prior to meeting their plan’s deductible, they might look to Trump Rx or DTC self-pay options to reduce their monthly payment for a medication. Self-pay expenses won’t count toward their deductible, but some consumers may choose this option if their monthly income and other household expenses will only allow them to afford the medication at a self-pay discounted price.

However, some employer plan designs effectively mitigate the impact of high deductibles on prescription drugs. According to the 2025 KFF EHBS, 61% of workers enrolled in an employer-sponsored health plan with a general annual deductible do not have to meet the deductible before prescription drugs are covered. Formularies with a tier for “preferred” brand-name drugs may require a relatively small copay even before the deductible is met. Additionally, 45% of covered workers in firms with 50 or more workers are enrolled in a plan that reduces or waives cost sharing for at least some maintenance drugs for chronic conditions, such as insulin for diabetes. 

People enrolled in a high-deductible health plan (HDHP) paired with a health savings account (HSA) must pay all medical costs until they meet their high deductible (at least $1,700 for an individual in 2026) to be eligible to establish or contribute funds to an HSA, with some exceptions.⁴ These pre-deductible coverage exceptions include certain prescription drugs that are ACA-required preventive services, certain insulin products, and other medications deemed preventive for certain chronic conditions. However, beginning this year, people in bronze and catastrophic individual Marketplace plans can establish and contribute to an HSA regardless of whether the plan meets these (and other) requirements. Employer-sponsored plans must still meet these requirements to be paired with an HSA.

For privately insured patients with chronic disease, copay assistance could also be a factor. Manufacturer “copay assistance programs” specifically for consumers using private health insurance are available for over half of the drugs currently available on TrumpRx, which may lower enrollees’ copay and coinsurance payments to as little as $0/month for some drugs, without TrumpRx discounts. Many health plans (group and individual), however, do not count the value of manufacturer copay coupons toward the enrollee’s deductible or out-of-pocket maximum, a feature known as a “copay adjustment program.” As of 2026, at least 25 states and the District of Columbia prohibit or restrict the use of at least some of these types of programs in certain health insurance plans sold in those states.⁵ These laws do not apply to those in employer self-insured plans regulated only under federal law. Consumers may need to consult their plan documents to find out whether manufacturer copay assistance can be used and, if so, whether their expenses will count toward their plan’s out-of-pocket obligations.

Patient takes a prescription drug that is discounted on TrumpRx, and a generic equivalent is available

According to one analysis, 90% of all prescriptions filled in the U.S. in 2024 were generics. Regardless of the form of payment (private insurance or self-pay), generic equivalents are often cheaper than brand-name drugs, sometimes even after discounts offered through TrumpRx. About half (22) of the drugs on TrumpRx have generic equivalents available in the U.S., at least three-quarters (17) of which are less expensive via GoodRx discounts or direct purchase from Cost Plus Drugs than the TrumpRx coupon price for the brand-name version. Five brand-name drugs on TrumpRx are less expensive on TrumpRx than their generic equivalents on the other two websites. Generic drugs generally have more favorable cost-sharing arrangements than brand-name drugs through insurance, decreasing patient out-of-pocket responsibility for patients using private insurance. Since usual and customary retail prices for these generic drugs are so much lower than their brand-name equivalents, they are cheaper for self-pay patients as well. There is no disclaimer on TrumpRx stating that consumers could pay less than the TrumpRx price by purchasing a generic alternative.

If a generic version is available, pharmacists may substitute the generic equivalent for the brand-name drug (and as of 2022, 17 states and the District of Columbia⁷ required this) unless the prescriber indicates to “dispense as written” on the prescription or the patient specifically requests the brand-name. In these states, a consumer who presents a TrumpRx coupon at the pharmacy for a brand-name drug might automatically end up paying less without using the coupon when the prescription is filled with a generic. Indeed, the “Frequently Asked Questions” at the bottom of the TrumpRx landing page indicates that pharmacies are not required to dispense the TrumpRx discounted drug.

Patient does not have insurance, or the TrumpRx drug is not covered by their insurance

Those who have already been paying out-of-pocket for certain drugs may see savings from TrumpRx. Some of the drugs on TrumpRx are typically not covered by private health insurance. For example, the KFF Employer Health Benefits Survey found that just one in five (19%) large employers offering health benefits to workers say they cover costly GLP-1 drugs such as Wegovy and Zepbound when used primarily for weight loss in 2025, and fewer than two in five (37%) reported covering fertility medications in 2024. However, some drug discounts on TrumpRx reflect limited-time offers for lower initial doses for new patients. For example, Wegovy pills start at $149/month but increase to $299/month after two monthly fills (for a higher dose).

Other patients who could potentially benefit (at least temporarily) from TrumpRx include those who have a gap in insurance coverage, those whose plan formulary has removed coverage for a needed drug, or those whose insurance has utilization management requirements, such as quantity limits or step therapy. As mentioned above, though, since TrumpRx currently only includes 43 drugs, patients will likely find discounts for a much larger selection of drugs using other self-pay discount platforms or from online pharmacies.

While TrumpRx offers the hope of cheaper medications, whether it will make a significant difference for most people will depend largely on the breadth of prescription drugs available on the website, the cost of the specific medication, state law or pharmacy policy regarding generic drugs, the plan design of the patient’s private insurance plan, if insured, and, particularly for the uninsured, whether there is a less expensive generic version of the drug. This puts a lot more onus on patients, particularly those with private coverage, to understand the many dynamics at play in determining the best option for them. In some cases, TrumpRx advertisement for these discounted brand-name prescription drugs could have the potential to mislead patients into paying more out-of-pocket than they would if they used their insurance and/or purchased a generic alternative.

Future developments that may further impact patient choices include:

• Possible options to allow patients to count discount coupons toward insurance deductibles and out-of-pocket maximums. As part of a February 2026 settlement with the Federal Trade Commission, ExpressScripts, one of the largest pharmacy benefit managers (PBMs) in the country, and its affiliates, agreed to “Provide covered access to TrumpRx as part of its standard offering upon relevant legal and regulatory changes” following allegations that it had created a system that had artificially increased drug prices. Under the proposed consent agreement, enrollees serviced by ExpressScripts or its affiliates would be able to count payments made through the TrumpRx platform toward patient deductibles and out-of-pocket maximums. How this would work in practice, as well as how this would affect other discount platforms, is not clear. Also, patients with private coverage are still awaiting implementation of changes to federal standards regarding the use of copay adjustment programs that could consistently allow manufacturer coupons to count toward their insurance cost sharing.
• Changes to federal law that could expand take-up of high-deductible health plans paired with a health savings account (HSA). The 2025 budget reconciliation law and recent proposed changes increase the availability of Marketplace catastrophic plans. For consumers who turn to these plans, out-of-pocket costs for prescription drugs may increase, potentially steering them to TrumpRx and self-pay DTC options instead of using their insurance. Although, in general, TrumpRx coupons cannot be used with insurance, one manufacturer’s drugs listed on TrumpRx link to the manufacturer’s website, which notes that the expense may be eligible for reimbursement by an HSA.
• Other federal reforms. Broader efforts than a discount website are likely key to addressing system-wide incentives that work to keep prescription drug prices high for all consumers, those with and without insurance. Since most individuals under 65 have employer-sponsored insurance, an important question going forward for this group is whether other current federal efforts, such as recently passed legislation directed at PBM disclosures and pass-through of rebates to employer plans and pending updates to price transparency regulations for prescription drugs, will lower their drug costs.

1. GoodRx is a website where consumers can compare discounted self-pay drug prices at retail pharmacies like CVS and Walgreens and access GoodRx coupons whose prices have been negotiated between pharmacies and PBMs. Cost Plus Drugs is an online pharmacy that sells discounted generic (and some brand-name) prescription drugs directly to consumers. ↩︎
2. All three manufacturers’ announcements noted that their products would be excluded from the Trump administration’s new tariffs in exchange for committing to these agreements. ↩︎
3. Average deductibles vary significantly by metal level and whether the enrollee is eligible for a cost-sharing reduction. ↩︎
4. An HSA is a tax-advantaged account that allows people enrolled in certain high-deductible health plans to save and pay for unreimbursed, qualified medical expenses. ↩︎
5. See https://theaidsinstitute.org/media/documents/TAI-2025-Report.pdf (21 states as of February 2025; https://www.bleeding.org/news/government-relations-update-may-2025 (3 more states as of May 2025); and https://www.nationalmssociety.org/news-and-magazine/news/new-jersey-copay-accumulator-legislation (another state in 2026). ↩︎
6. An 18th state (Indiana) has a similar requirement, but unlike the other state laws, it only applies for Medicare patients. ↩︎

The largest private health insurance companies often offer plans in multiple markets, including the Medicare Advantage, Medicaid managed care, individual (non-group), and fully-insured group (small and large employer) health insurance markets. Each market has unique features, including eligibility, payment, and coverage rules, which affect insurers’ overhead and potential profit. In recent years, private insurers are playing a growing role in public insurance programs, with more than half of eligible Medicare beneficiaries enrolled in a private Medicare Advantage plan and more than three-quarters of Medicaid enrollees obtaining coverage through a managed care plan (typically a private insurer).

This brief examines two measures of financial performance – gross margins and medical loss ratios – in the Medicare Advantage, Medicaid managed care, individual, and fully insured group health insurance markets using data reported by insurance companies to the National Association of Insurance Commissioners (NAIC) and compiled by Mark Farrah Associates, through the end of 2024 (the most recent year of annual data). The Medicare Advantage market is made up of around 33M people in 2024. In comparison, this is less than half of the population for Medicaid managed care and about 70% of the size of the fully insured group market. However, the Medicare Advantage market is about 1.4 times larger than the individual market.

In 2024, per enrollee gross margins in dollars were highest in the Medicare Advantage market, and medical loss ratios (measured as percentages) were lowest in the individual insurance market. In 2024, the Medicaid managed care market had both the lowest gross margins per enrollee and highest medical loss ratio. While both gross margins and medical loss ratios are indicators of financial performance, higher margins and lower loss ratios (as they are calculated in this analysis) do not necessarily translate into greater profitability since they do not account for administrative expenses or tax liabilities. Additionally, the increasingly complex structure of insurance companies, including the rise in consolidation and vertical integration, and role of subsidiaries, make it difficult to isolate the revenues and expenses associated with a particular insurance market. (A detailed description of each market is included in the Appendix).

Gross margins

The gross margin per enrollee is the amount by which total premium income exceeds total claims costs per person over a specified time period (i.e., per year).

At the end of 2024, gross margins per enrollee ranged from $608 in the Medicaid managed care market to $1,655 in the Medicare Advantage market. Gross margins per enrollee in the group market was $846, roughly half the level observed among Medicare Advantage plans on average. Per enrollee gross margins in the individual market in 2024 amounted to $987. The level of margins reflects, in part, the overall health needs and spending in a market segment. A similar margin in percentage terms will translate to a higher margin in dollars per enrollee when average health expenses are higher.

Medical loss ratios

Another way to assess insurer financial performance is to look at medical loss ratios (MLRs), or the percent of premium income that insurers pay out in the form of medical claims. Generally, lower MLRs mean that insurers have a higher share of income remaining after paying medical costs to use for administrative costs or keep as profits. Each health insurance market has different administrative needs and costs, so a lower MLR in one market does not necessarily mean that market is more profitable than another market.

MLRs are used in state and federal insurance regulation in a variety of ways. In the commercial insurance (individual and group) markets, insurers must issue rebates to individuals and businesses if their MLRs fail to reach minimum standards set by the ACA. Medicare Advantage insurers are required to report MLRs at the contract level (which typically combines multiple plans) and are required to issue rebates to the federal government if their MLRs fall short of the required level of 85% and are subject to additional penalties if they fail to meet MLR requirements for multiple consecutive years. For Medicaid managed care organizations (MCOs), CMS requires states to develop capitation rates for Medicaid to achieve an MLR of at least 85%. There is no federal requirement for Medicaid plans to pay remittances if they fail to meet their MLR threshold, but a majority of states that contract with MCOs require remittances in at least some cases. The MLRs shown in this issue brief are simple loss ratios (claims as a share of premium income) and may differ from loss ratios calculated using the definition of MLR in the ACA and in Medicaid managed care.

In 2024, MLRs were similar between the Medicare Advantage, Medicaid managed care, and group markets. However, individual market loss ratios were lower. Simple loss ratios were around 85% in individual market, 88% in the fully insured (group) market, 90% in the Medicare Advantage market, and 91% in the Medicaid managed care market.

While gross margins are not equivalent to profitability, changes in gross margins can be indicative of changes in profitability (assuming administrative costs and tax liability are stable). Gross margins have declined from increases that occurred in 2020 during the initial phase of the COVID-19 pandemic. In 2024, all markets saw decreases in gross margins compared to 2023.

Medicaid Managed Care: Per enrollee gross margins in the Medicaid managed care market increased during the pandemic as policies prohibited states from disenrolling people from Medicaid in exchange for additional federal dollars. Gross margins decreased by 19% to $608 from 2023 to 2024, which is slightly higher than in 2019, before the pandemic. Starting in April 2023, “continuous enrollment” in Medicaid ended and states began disenrolling individuals who were no longer eligible or who did not complete the renewal process, and Medicaid/CHIP enrollment declined by more than 16% (about 15 million people) from March 2023 to December 2024. As millions were disenrolled, states and plans faced considerable rate setting uncertainty. A shift in member risk, characterized by an increase in acuity (or health risk) of the remaining population, and increasing utilization patterns began to emerge by late 2023, which may have contributed to the decrease in per enrollee gross margins seen from 2023 to 2024. States may use a variety of risk mitigation strategies, including “risk corridors” (where states and plans agree to share profit or losses), to provide financial protection and limits on financial risk for states and plans that may not be accounted for in the data used in this gross margin analysis. States may also make capitation rate adjustments (with CMS approval) when substantial coverage changes occur mid-year or adjustments are necessary to address unforeseen circumstances that increase benefit costs.

Medicare Advantage: Through the end of 2024, gross margins in the Medicare Advantage market averaged $1,655 per enrollee, which is 17% lower than in 2023 ($1,986), consistent with reports by the largest Medicare Advantage insurers of increased utilization beginning in late 2023 that extended through 2024. Additionally, the phase-in of changes to Medicare Advantage payments, stemming from revisions to how the federal government makes adjustments for the health status of enrollees, began in 2024 and reduced the pace at which revenue per enrollee grew. Per enrollee gross margins have consistently been larger than those in the individual, fully insured, and Medicaid managed care markets since 2018.

Group Market: Gross margins per enrollee for fully insured group plans declined by 7% from $914 to $846 from 2023 to 2024. This is the first time per enrollee gross margins in the fully insured group market have declined from the year prior since 2021, when they were the lowest in the past decade (not shown).

Individual Market: Individual market gross margins were about 5% lower in 2024 compared to 2023, going from $1,042 to $987 per enrollee.  In 2018, following efforts to repeal the ACA and defunding of Cost Sharing Reduction subsidies, insurers raised individual market premiums substantially. These premium increases resulted in significantly higher margins than in earlier years. For context, gross margins per enrollee in 2024 were around 35% and 16% lower than in 2018 and 2019, respectively.

Each health insurance market has different administrative needs and costs, so similar MLRs do not imply that the markets are similar to each other in profitability. Additionally, simple MLRs examined in this brief do not incorporate the effects of changes in tax law, such as the health insurer tax, which has been permanently repealed starting in 2021, was in effect in 2018 and 2020, but was not in 2019. While MLRs alone cannot convey whether a market is profitable in a particular year, if administrative costs hold mostly constant from one year to the next, a change in the MLR could imply a change in profitability.

Individual Market: The average individual market MLR in 2024 was similar to 2023, but higher than those seen in the years following the end of cost-sharing reduction payments. As mentioned earlier, 2018 and 2019 were exceptionally lucrative years for the individual market. Many plans fell short of the ACA’s MLR requirements and were therefore required to issue large rebates to consumers based on their 2018 and 2019 experience.

Group Market: The average MLR for group plans was stable between 2022 and 2023 at 86% but rose to its 2021 value of 88% in 2024. These are all higher than in the years prior, when MLRs ranged from 83% in 2018 and 2020 to 85% in 2019.

Medicaid Managed Care: Relative to 2023, the average MLR in 2024 for the Medicaid managed care market increased from 88% to 91% (implying a potential decrease in profitability). This is the highest Medicaid managed care average medical loss ratio observed in the past decade (data not fully shown). As previously discussed, states and plans faced considerable rate setting uncertainty after millions of people were disenrolled during the unwinding of the pandemic-era Medicaid continuous enrollment provision, resulting in acuity and utilization shifts within the remaining population. These factors may have contributed to the change in MLR seen from 2023 to 2024. Looking ahead, implementation of the 2025 federal budget reconciliation law’s Medicaid coverage and financing provisions could affect Medicaid managed care plans.

Medicare Advantage: Average MLRs in the Medicare Advantage market rose to 90% in 2024. That is higher than before and during the onset of the COVID-19 pandemic, from 2018-2020, when MLRs ranged from 83% to 86%. The increase of the MLR in the Medicare Advantage market could imply decreased profitability, consistent with higher utilization and the effects of phasing in a new risk-adjustment model.  At the same time, it may be difficult to interpret changes in MLRs with increasing consolidation, driven in part by insurers purchasing related businesses, such as pharmacy benefit managers, physician groups, and post-acute care providers, because it is not entirely clear how insurers allocate expenses across different lines of business.

Medicare Advantage plans have both higher average costs and higher premiums (largely paid by the federal government), because Medicare covers an older, sicker population. So, even when Medicare Advantage insurers spend a similar share of their premiums on benefits as other insurers in other markets, the gross margins described above—which include profits and administrative costs—tend to be higher in Medicare Advantage plans.

We analyzed insurer-reported financial data from Health Coverage Portal^TM, a market database maintained by Mark Farrah Associates, which includes information from the National Association of Insurance Commissioners (NAIC). We used the “Exhibit of Premiums, Enrollment, and Utilization” annual report (accessed January 21, 2026) for this analysis. The dataset analyzed in this report does not include California HMOs regulated by California’s Department of Managed Health Care. Additionally, for Medicaid, there are four states (California, Delaware, New York, and Oregon) that have different reporting practices and therefore may only have partial or no NAIC data available for the years displayed.

We excluded plans in each segment of interest that filed negative values or have negative or zero dollars in premiums or claims. We also excluded plans reporting at least 1,000 hospital patient days incurred per 1,000 member months. We only included plans that were categorized as having a “medical” focus in our analysis and exclude “specialty” plans which are categorized as “ancillary or supplemental benefit plans.” We also excluded any plans from the U.S. territories. We corrected for plans that did not file “member months” or filed a zero “member month” value in the annual statement but did file current year membership by imputing these values. If, after imputing, plans still did not have “member months,” they were excluded.

The group market in this analysis only includes fully insured plans (but excludes Federal Employee Health Benefits Program plans and plans regulated by the California Department of Managed Health Care). NAIC defines “Medicaid” as “business where the reporting entity charges a premium and agrees to cover the full medical costs of Medicaid subscribers.” This explicitly excludes Administrative Services Only (ASO) plans. We only use “medical” focused plans to help exclude any specialty plans; however, prepaid ambulatory health plans (PAHPs), prepaid inpatient health plans (PIHPs), or Programs of All-Inclusive Care for the Elderly (PACE) plans may be included in the analysis due to NAIC’s definition of Medicaid.

Gross margins per enrollee were calculated by subtracting the sum of total incurred claims from the sum of unadjusted health premiums earned and dividing by the total number of members.

Premiums for Medicare Advantage plans primarily consist of federal payments made to plans and any additional amounts plans may charge their enrollees. Premiums for Medicare Advantage plans do not include payments for Medicare Part D benefits. Premiums for Medicaid may not reflect contractual adjustments related to risk corridors or other risk-sharing adjustments.

To calculate medical loss ratios, we divided the market-wide sum of total incurred claims by the sum of all unadjusted health premiums earned. MLRs in this analysis are simple loss ratios and therefore, may differ from loss ratios used to calculate rebates.

Individual Market: The individual market includes coverage purchased by individuals and families through the Affordable Care Act’s exchanges (Marketplaces) as well as coverage purchased directly off-exchange, which includes both plans complying with the ACA’s rules and non-compliant coverage (e.g., grandfathered policies purchased before the ACA went into effect and some short-term plans). The federal government provided subsidies for low and middle-income people in the Marketplace and includes measures, such as risk adjustment, to help limit the financial liability of insurers. Insurers in the individual market receive premium payments from enrollees, plus any federal subsidies for people in the Marketplaces.

Some plans submitting data on the Exhibit of Premiums Enrollment and Utilization appear to be including some Children’s Health Insurance Program (CHIP) data in their Individual market filings. In a previous version of this analysis, we used the Supplemental Health Care Exhibit to address this. However, in this analysis, we opted to use the EPEU to ensure comparability.

Group Market: The fully insured group market serves employers, their employees and dependents who are enrolled in fully insured health plans. This market includes both small and large group plans but excludes employer-sponsored insurance plans that are self-funded, which account for 63% of workers with employer-sponsored insurance in 2024. This analysis does not capture metrics for the Federal Employee Health Benefit Program or California Managed Health Care plans.  Roughly 25 million people from the fully insured group market in 2024 are accounted for in this analysis. Plans typically receive premium payments from both employers and their employees.

Medicaid Managed Care: The Medicaid managed care market includes managed care organizations (MCOs) that contract with state Medicaid programs to deliver comprehensive acute care (i.e., most physician and hospital services) to enrollees. As of July 2024, more than three-fourths (over 66 million people) of all Medicaid beneficiaries nationally received most or all of their care from comprehensive risk-based MCOs. There is significant variation across states with respect to services that are covered by MCOs.

In this analysis, the NAIC data we use defines “Medicaid” as “business where the reporting entity charges a premium and agrees to cover the full medical costs of Medicaid subscribers” and only explicitly excludes Administrative Services Only (ASO) plans from their reporting. While we only use “medically” focused plans to help exclude any specialty plans, PAHPs, PIHPs and PACE plans may not be excluded due to NAIC’s definition of Medicaid. Additionally, for Medicaid, there are four states (California, Delaware, New York, and Oregon) that have different reporting practices and therefore may only have partial or no NAIC data available for the years displayed. In other work, KFF defines comprehensive MCOs as managed care plans that provide comprehensive Medicaid acute care services and, in some cases, long-term services and supports as well. This excludes “limited benefit plans” including prepaid ambulatory health plans (PAHPs), prepaid inpatient health plans (PIHPs), and Programs of All-Inclusive Care for the Elderly (PACE) that may be included in this analysis.

Medicare Advantage: The Medicare Advantage market provides Medicare-covered benefits through private plans to around 33 million Medicare beneficiaries in 2024, which is over half of all Medicare beneficiaries in 2024. The federal government makes risk-adjusted payments (higher payments for sicker enrollees and lower payments for healthier enrollees) to plans (averaging nearly $14,823 per enrollee in 2024) to cover the cost of benefits covered under Medicare Parts A and B and supplemental benefits, such as dental, vision, hearing, and others, with additional payments for costs associated with prescription drug coverage. Some plans charge enrollees an additional premium.

Comprehensive, capitated managed care is the dominant Medicaid delivery system, accounting for about 78% of beneficiaries (over 66 million individuals as of July 2024) and 50% of total Medicaid spending (over $458 billion in FY 2024). States were contracting with over 280 individual Medicaid managed care organizations (MCOs) (as of July 2022), which represent a mix of private for-profit, private non-profit, and government plans. Medicaid managed care contracts are among the largest and most complex state contracts, frequently exceeding billions of dollars a year. While the majority of states contract with managed care plans, states decide which populations and services to include in managed care arrangements, leading to considerable variation across states. States have been largely responsible for monitoring and overseeing managed care plans, while federal rules have evolved over time. Historically, publicly available managed care performance data has been limited and inconsistently available across states, limiting transparency and accountability of individual plans.

Sweeping changes to Medicaid managed care rules and regulations in 2016 and 2024 included provisions related to beneficiary protections, access, and program oversight, including new managed care reporting and oversight requirements and efforts to promote transparency. The first Trump administration relaxed some managed care requirements in rules issued in 2020, but the administration left the managed care reporting requirements intact. To date, the Centers for Medicare and Medicaid Services (CMS) has continued to publicly post newly collected state managed care reports on Medicaid.gov. It remains uncertain whether the Trump administration will seek to roll back or revise provisions included in the 2024 managed care final rules.

This brief describes the Managed Care Program Annual Report (“MCPAR”), a relatively new, comprehensive report on state managed care programs that includes plan-level data, that must be submitted (to CMS) by states annually. It functions alongside other managed care reports aimed at improving state and federal managed care program monitoring, oversight, and transparency. (Future KFF analysis will explore policy relevant metrics from the data.)

By introducing the MCPAR reporting requirement, CMS intended to address the fragmented program information it received from states and to improve managed care program oversight. In finalizing the MCPAR requirement in 2016, CMS indicated it expected the reports would provide valuable and timely information to assess managed care program operations in each state and would improve transparency. In its June 2021 guidance, CMS noted the structured data collected from MCPARs (and other newly required managed care reports) would allow for the analysis of state-specific and national data and that CMS could use these data to assist states in improving their managed care programs while also ensuring compliance with federal laws and regulations. See Appendix for additional information on key administrative actions related to the MCPAR.

The first MCPARs were due to CMS between December 2022 and September 2023 (with due dates dependent on the managed care contract period). Following the release of CMS guidance in June 2021 that triggered the 2016 requirement, states are required to submit one MCPAR report for each managed care program the state administers, no later than 180 days after each program’s contract year (which typically operate on a calendar- or state fiscal year-basis). A managed care “program” is defined by a specified set of benefits and eligibility criteria identified in managed care plan contracts.¹ A state may run separate programs for different populations (e.g., children, adults, etc.). As of February 2026, CMS has made MCPAR reports from 2023 and 2024 available on Medicaid.gov. (States are also required to post MCPARs on their websites; however, it is unclear how many states have posted their MCPAR reports. The 2024 rule reaffirmed regulatory transparency requirements and sets a timeframe (within 30 calendar days of submitting to CMS) for posting MCPARs on state websites.)

The MCPAR collects data across many areas of managed care program operations, including plan-level data (Table 1). Notably, the MCPAR template is designed to collect plan-level data in specific areas including enrollment, prior authorization, grievances and appeals, quality measures, encounter data submissions, sanctions, program integrity, and financial performance. While there are some limitations (discussed in more detail below), plan-level data can be used to analyze and compare individual plan performance within and across states. In addition, the MCPAR template collects state- and program-level data – for example, providing information on certain state monitoring activities, contract requirements, and program characteristics.

The bullets below provide additional context and information involving select MCPAR data elements/domains that are often cited as key to improving managed care oversight and transparency:

• Grievances and appeals. Plan-level data on appeals and grievances can help reveal quality and access issues. MCPAR reported grievance and appeal data include the total number of appeals and grievances resolved, the service types and reasons for appeals and grievances, the total number of state fair hearings and their outcomes, and the outcomes of external medical reviews (if offered by the state). Previously, states were not required to report appeals and grievances data to CMS.

• Prior authorization. The original MCPAR reporting template did not require states to track the number of prior authorization denials or appeal outcomes. Beginning with MCPAR reports submitted in June 2026, states will be required to report new plan-level prior authorization data, including the total number prior authorization requests, denial and approval rates, the percentage of standard prior authorization requests that were approved after appeal, and average and median decision times. These new data can be used to assess timeliness of prior authorization decisions, the extent of plan denials, and plan-wide issues with access to care. CMS expanded prior authorization reporting requirements following the release of an Office of Inspector General (OIG) report that raised concerns about the high number and rates of denied prior authorization requests by some plans and concerns that states were not adequately overseeing and monitoring MCO decisions on prior authorization requests. MCPAR prior authorization reporting requirements align with public reporting requirements included in the 2024 Interoperability and Prior Authorization rule.

• Sanctions. States may impose monetary or non-monetary sanctions on managed care plans if they do not meet contractual obligations. Historically, publicly available data on states’ use of sanctions has varied across states. A recent MACPAC state scan indicated the most common sanction tools identified in managed care contracts include monetary penalties, corrective action plans, and administrative/corrective actions. The MCPAR template collects plan-level data on state-imposed sanctions. Reported elements include intervention type (e.g., civil monetary penalty, liquidated damages, suspension of new enrollment, correction action plan), performance issues (e.g., quality measure performance, network adequacy, timely payment to providers), and sanction amount (if applicable/a monetary penalty was imposed).
• Program integrity. Plans are required to conduct a variety of program integrity activities. For example, plans must have a system for routine internal monitoring and auditing of compliance risks, promptly report to the state all overpayments identified or recovered, and notify the state if they receive information regarding changes to enrollee and provider eligibility. The MCPAR collects data related to plan program integrity activities, including plan-level data on managed care provider overpayments recovered, the number of program integrity investigations opened and resolved by plans, and how frequently plans report changes in beneficiary circumstances to the state. The reports also collect data on state program integrity responsibilities including contract standards for overpayments, how the state monitors overpayment reporting, and links to audits of plan encounter and financial data.

While the data and information contained in MCPARs have the potential to facilitate assessment and comparison of plan performance within and across states, there are also limitations. For example:

• Relatively new requirements. MCPARs are still in the initial years of implementation. The MCPAR template has evolved since its initial release. CMS is likely to continue to refine MCPAR reporting requirements and instructions to ensure consistency across states and to improve data quality and completeness.

• Data variation & comparability. There is significant variation across states in managed care programs (populations served, benefits), plan contract requirements, and state monitoring and oversight approaches. As a result, direct comparison across states, particularly in certain areas, may be challenging. States may also use inconsistent methods for certain metrics or reporting may be inconsistent across states.

• Importance of contextualized data. Without context, MCPAR data may be difficult to interpret in some areas. For example, listing sanctions without context may make it difficult to determine the significance of the noncompliance or the state’s approach to enforcing contract compliance issues. Low numbers of appeals and grievances could reflect few adverse benefit determinations, that access to care met enrollees’ needs, or that the plan does not adequately categorize or track appeals and grievances.

• Scope. MCPARs do not capture all aspects of managed care program and plan performance. MCPARs are also not the only source of plan or program performance information. Additional data can be found in other reports, including the MLR summary report and external quality review (EQR) annual technical report.

• Report format. TheMCPAR reports are currently posted on Medicaid.gov as PDF files, which allows for a centralized, uniform report repository. While the reports are posted publicly, they are technical and may be difficult for the general public/consumers to understand or gain actionable insights.

• Report period. As states operate with different contract years, the timing of data submission and the scope of reported data can differ (including number of months covered).

• Timeliness. The lag in time between end of contract year and report posting (on Medicaid.gov or state website) may affect the immediacy and relevance of the data.

According to a March 2024 U.S. Government Accountability Office (GAO) report, CMS had developed a draft plan (as of April 2023) for processing and analyzing MCPAR data, including developing an analytic dashboard, publishing summary reports and state-level data, and implementing an oversight plan. While CMS began publishing state MCPAR reports on Medicaid.gov in July 2024, CMS indicated to GAO they planned to prioritize working with states on data quality and technical assistance before implementing next steps related to data use and oversight. In November 2025, CMS told GAO that the agency is working on developing an internal appeals and grievance dashboard, to facilitate using the data for oversight, with planned implementation by June 2026. MACPAC is also currently examining state and federal tools for ensuring accountability of managed care organizations and may issue additional policy recommendations in a future report.

Key Administrative Actions Related to the MCPAR

Federal oversight has primarily focused on reviewing and approving plan contracts and capitation rates, and states have generally had considerable flexibility in implementing federal managed care monitoring and oversight requirements. While states have historically produced a variety of data and reports on their managed care programs (e.g., encounter data, external quality reviews etc.), states were not required to produce or submit standardized, comprehensive managed care program reports. Publicly available managed care performance data has been limited and inconsistently available across states, limiting transparency. The following bullets track administrative action related to introducing and implementing the MCPAR reporting requirements:

• 2016. In 2016, under the Obama Administration, CMS issued sweeping managed care regulations to advance program goals related to access, quality, fiscal and program integrity, beneficiary protections, and monitoring and oversight. The rules created new managed care reporting requirements, requiring states to submit three annual reports: 1) an annual managed care program report, 2) a network adequacy and access report, and 3) a medical loss ratio (MLR) summary report. Implementation of the reporting requirements was phased in. However, the first annual managed care program reports were not due until CMS issued guidance on the content and form of the report.

• 2017-2020. In 2017, under the first Trump administration, CMS indicated it would use “enforcement discretion” to allow states to postpone compliance with certain managed care rules introduced in 2016 (although it’s unclear what enforcement discretion was offered and to which states). In 2020, CMS finalized revisions to Medicaid managed care rules in specific areas (e.g., relaxing network adequacy requirements and beneficiary protections) aimed at reducing state and federal burden, streamlining regulations, improving rate setting transparency, and promoting state flexibility. The new managed care reporting requirements from the 2016 rule were left intact, including the annual managed care program report requirement, though the administration did not issue further guidance to effectuate the reporting requirement.

• 2021-2024. In June 2021, the Biden administration released guidance that triggered the annual managed care program report (referred to now as the managed care program annual report or “MCPAR”) requirement, developed standard reporting templates (for the MCPAR, network adequacy and access report, and MLR Summary report) and a variety of toolkits, and released a series of informational bulletins on managed care monitoring and oversight. The first MCPAR reports were due to CMS in December 2022. To improve transparency, CMS began posting state-submitted MCPAR (and MLR Summary) reports on Medicaid.gov in 2024 (from “performance year” 2023). In 2024, the Biden administration also issued significant new Medicaid managed care regulations aimed at improving access, quality of care, and monitoring and transparency, including expanding MCPAR reporting elements and transparency requirements.

• 2025 and beyond. The second Trump administration has continued to post state-submitted MCPAR reports on Medicaid.gov (reports from 2024 were posted in 2025). The administration has also made minor revisions and additions to the MCPAR template² and released an updated MCPAR “FAQ” in August 2025. CMS has also given states the option to forgo completing the access and network adequacy sections of the MCPAR, noting this option was introduced to reduce state burden and duplication with the separate network adequacy and access report; however, it may also reduce transparency as the network adequacy and access report is not currently posted on Medicaid.gov. In November 2025, CMS told GAO that the agency is working on developing an internal appeals and grievance dashboard, to facilitate using the data for oversight, with planned implementation by June 2026. Beginning with MCPAR reports submitted in June 2026, states are required to report new plan-level prior authorization data including the total number prior authorization requests, denial and approval rates, appeal outcomes, and average and median decision times. The 2024 managed care rule requires states to include the results of enrollee experience surveys in the MCPAR (for contract rating periods that begin on/after July 9, 2027).