Employers Expect Big Jump in Health Insurance Costs Next Year

Good evening. President Trump today floated the idea of renaming the Strait of Hormuz in his honor. "Now that we have it under U.S.A. control, should we change the name Hormuz Strait to TRUMP STRAIT???" he wrote on his social media site. Later, when asked by a reporter how serious he was, Trump laughed off the idea. "No, no," he said, "I was just throwing that out."

Here's what we're tossing around tonight.

Employers Expect Big Jump in Health Insurance Costs Next Year

U.S. employers expect to see a significant jump in health insurance costs next year, according to a new survey by the consulting firm Marsh.

The survey of more than 1,800 companies found that they are penciling in an 8.2% increase in the cost of employer-sponsored health insurance in 2027 compared to this year. That would be the largest single-year increase in average employee health insurance costs in more than two decades.

The increase would be an even larger 11% if employers had failed to take steps such as raising employees' share of premiums to lower overall costs, the survey said.

Multiple factors in play: Insurance costs have risen faster than inflation for years (with the notable exception of 2022), with the consolidation of hospital and provider networks playing a leading role in the upward pricing pressure. More recently, the widespread use of GLP-1 medications for weight loss has added to the cost increases; analysts at Marsh say the drugs will account for a full percentage point of the cost increase next year.

The use of artificial intelligence is also raising costs, as the technology helps providers find more services to bill for, and at higher prices. Another recent driver is the No Surprises Act, which was intended to protect patients from surprise bills from out-of-network providers, but has in practice benefited providers through its prescribed conflict-resolution program.

The bottom line: Health care costs continue to rise, and it looks like next year will be no exception.

Quote of the Day

"There's no need to cut any more out of the Medicaid system at a time when the safety net is really struggling."

− Robert Nelb, policy director at America's Essential Hospitals, a nonprofit trade association and advocacy group representing hospitals that serve large Medicaid populations.

Nelb was quoted by Politico's Robert King and Amanda Chu in a piece detailing a new lobbying blitz by hospitals seeking to push back on a pair of proposed rules from the Centers for Medicare and Medicaid Services targeting taxes states use to get more federal Medicaid money. Hospitals fear that the rules could slash their funding above and beyond the hundreds of billions of dollars in Medicaid cuts enacted last year as part of Republicans' One Big Beautiful Bill Act.

Hospitals reportedly argue that the administration's proposed rules go beyond what Congress intended when it cracked down on a practice that critics said gamed the federal Medicaid funding system.

"Hospitals expected to lose $340 billion through 2034 after Congress passed the One Big, Beautiful Bill Act last year. If the rules are finalized as proposed, they would generate $756 billion in savings to the federal government and $265 billion in savings to states through 2035," King and Chu report. "Or as hospitals see it, they're losing $681 billion more than they expected."

Hospitals reportedly warn that they will be forced to cut services and staff, or even close entirely, if those steeper cuts go through - and some hospital systems are already making cuts in anticipation.

The administration told Politico that it will review feedback on the rules before they are finalized, but CMS Administrator Mehmet Oz has praised the proposals.

"Right now, misaligned payment incentives and opaque financing arrangements are driving up costs without delivering better care," Oz said in a statement in May. "This rule restores balance by aligning Medicaid payments with Medicare standards, strengthening accountability, and ensuring taxpayer dollars support patients, not payment schemes. When we hold the line on spending and put patients first, we protect Medicaid for the people who depend on it today and for generations to come."

Read more at Politico.

Trump Withholding Millions in Counterterror Funds, NY Governor Says

The Trump administration has failed to deliver $87 million in counterterrorism and emergency response funds earmarked for New York, Gov. Kathy Hochul said Tuesday.

At a joint press conference with New York City Mayor Zohran Mamdani, Hochul accused the White House of failing to provide promised funds ahead of the upcoming commemoration of the 9/11 attacks. Last year, the Department of Homeland Security cut $187 million in counterterrorism funding for New York, but Trump restored the funding following pushback from state representatives. About $100 million of those funds have been delivered, leaving an $87 million hole.

"Here's my message to the president: Don't undermine our public safety efforts. Don't defund the police who thwart terror attacks. Don't play political games with people's lives," Hochul said. "Release the $87 million you owe us. Because if you don't release the counterterrorism funding, you're betraying every family that lost someone on 9/11."

Hochul added that the failure to provide the full funding "is an example of Donald Trump endangering public safety to yet again extract revenge on a blue state.

Mamdani said the money is needed to help fund essential fire and police services. "We are not talking about reports or studies or abstract security proposals," he said. "We are talking about the money needed to fully fund 12 bomb squads across New York."

In response, DHS charged New York with holding back $300 million in unused Federal Emergency Management Agency funds.

"Instead of falsely accusing President Trump of defunding law enforcement, Governor Hochul and Mayor Mamdani should answer a much simpler question: Why is New York and NYC demanding even more taxpayer money when it has failed to spend hundreds of millions of dollars already provided to protect its communities?" a FEMA spokesperson said.

The governor's office said DEMA is not being truthful, since some of the FEMA funds are reimbursements and that they legally have several years to spend the money.

Perception of Government Corruption Hits New High

The share of Americans who believe corruption is widespread throughout the government has climbed to a record high of 89%, according to a poll released by Gallup on Wednesday. The result is up 10 percentage points from just last year and is well above both the 59% who said corruption is widespread back in 2006 and the more recent poll readings between 70% and 75%.

The change is driven largely by Democrats - but perceptions of corruption among Republicans and independents have risen, too.

In 2024, the last year of Joe Biden's presidency, 57% of Democrats told Gallup that corruption was widespread in government. That jumped to 76% in Trump's first year back in office and then 91% this year.

The share of independents who say corruption is widespread has risen from 78% in 2024 to 90% this year.

Among Republicans, meanwhile, the views of corruption have improved slightly since 2024, falling from 87% to 83%.

While some government watchdogs have warned that President Trump and his administration are demonstrating levels of corruption and self-dealing unprecedented in American history, Gallup's Benedict Vigers writes that the poll results suggest a difference in how Democrats and Republicans view government corruption.

"Democrats' perceptions appear closely linked to which party controls the administration," Vigers writes. "Republicans' greater consistency on this measure - despite the 2024 election delivering them the White House and Congress - suggests a more underlying view of government corruption that depends less on the party in power."

Those views align with the parties' broader views of government.

Gallup also notes that the poll results make the United States an outlier when compared to other advanced economies, where the median level of perceived corruption has fallen from 69% in 2009 to below 60% since 2022. In fact, the U.S. now tops the OECD rankings when it comes to public perception of widespread corruption.

Fiscal News Roundup

• DOJ Says States Must Report All Undocumented Immigrants - or Lose Federal Funds – Politico
• US 10-Year Yield Touches Highest Level Since 2023 – CNN
• New York Fed's Williams Says Yield Surge Due to Strong Economic Prospects – CNBC
• El-Sayed Blames Trump for Global Bond Market Sell-Off – Washington Post
• GOP Lawmakers Seek Answers From Trump Trade Chief on Canada Tariffs – Politico
• Mamma Mia! How a Panic Over Pasta Prices Prompted a Trump Tariff Retreat – Politico
• Trump's Withholding of N.Y. Counterterror Funds Threatens Safety, Governor Says – Washington Post
• Hospitals Say Coming Trump Administration Rules Are Worse Than GOP's Medicaid Cuts – Politico
• Trump Turns Up Pressure on Congress for Hollywood Tax Credit – Politico
• No Immediate Plans to Punish Rogue House Democrats for Bailing Out GOP – Politico
• Top US Doctors Offer Updated Flu and COVID Vaccine Recommendations, Aiming to Ease Confusion – Associated Press
• Kennedy Center Disassembles 'Blue' Sculpture From Its Grounds – Associated Press
• Trump $1 Coins Out of Stock Hours After Going on Sale – CNN

Views and Analysis

• Trump's Affordability Crisis Is About to Hit a New Level – Sam Sutton and Michael Stratford, Politico
• The War Is Raising the Price of Money. That's a Problem for the Global Economy – Matt Egan, CNN
• Better Get Used to the Bond Market's New Normal – John Stepek, Bloomberg
• Borrowing Isn't the Bond Market's Only Concern-Growth Is Too – Jason Douglas, Wall Street Journal
• Wondering How Nuts Trump's Tariffs Are? Consider Aluminum – Bill Saporito, New York Times
• Trump's Canada Antagonism Vexes Americans – Avery Lotz, Axios
• The Republican Midterm Message on Inflation? Stop Whining! – Dana Milbank, NOTUS
• Bigger SALT Break Delivers Tax Savings in Unexpected Places – Caitlin Reilly, Bloomberg
• Will You Get Your Full Social Security Payout? Here's What Experts Say – Julie Z. Weil, Washington Post
• Democrats' Path to a House Majority Is Narrower Than It Looks – Henry Olsen, Washington Post
• Navy Chief: Naval Warfare Is Changing. Our Sailors Need These Weapons – Daryl Caudle, Washington Post
• The $1 Trump Coins Are Here. Why Spending Them Is Legal but Tricky – Herb Scribner, Axios