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Business Wire
4 days ago
- Business
- Business Wire
Maximus Reports Fiscal Year 2025 Third Quarter Results
TYSONS, Va.--(BUSINESS WIRE)-- Maximus (NYSE: MMS), a leading provider of government services, reported financial results for the three and nine months ending June 30, 2025. 'Our third quarter results reflect once again the resilience of our business model that is underpinned by consistent delivery at scale of critical government services,' - Bruce Caswell, President and Chief Executive Officer Share Highlights for the third quarter of fiscal year 2025 include: Revenue increased 2.5% to $1.35 billion, compared to $1.31 billion for the prior year period. Organic growth was 4.3% driven primarily by strong performance in the U.S. Federal Services Segment. Diluted earnings per share were $1.86 and adjusted diluted earnings per share were $2.16, compared to $1.46 and $1.74, respectively, for the prior year period. The company is raising revenue and earnings guidance for fiscal year 2025. Full-year revenue is expected to range between $5.375 billion and $5.475 billion. Adjusted EBITDA margin is expected to be approximately 13% and adjusted diluted earnings per share are expected to range between $7.35 and $7.55 per share for the full fiscal year 2025. A quarterly cash dividend of $0.30 per share is payable on August 31, 2025, to shareholders of record on August 15, 2025. 'Our third quarter results reflect once again the resilience of our business model that is underpinned by consistent delivery at scale of critical government services,' said Bruce Caswell, President and Chief Executive Officer. 'We are grateful to play a central role in supporting our customers' missions by delivering essential services efficiently and accountably." Caswell added, 'Over the 50 years that Maximus has served as a trusted and impartial delivery partner for government, we've consistently demonstrated adaptability as legislation and regulatory changes lead to new program imperatives and advanced technologies like AI reshape citizen services." Third Quarter Results Revenue for the third quarter of fiscal year 2025 increased 2.5% to $1.35 billion, compared to $1.31 billion for the prior year period. Organic growth was 4.3% primarily due to the U.S. Federal Services Segment and, to a lesser degree, contributions from the Outside the U.S. Segment. The U.S. Services Segment delivered expected results following the prior year period's over-performance from Medicaid-related activities. For the third quarter of fiscal year 2025, operating margin was 12.3% and the adjusted EBITDA margin was 14.7%. This compares to margins of 10.8% and 13.1%, respectively, for the prior year period. Diluted earnings per share were $1.86 and adjusted diluted earnings per share were $2.16. This compares to $1.46 and $1.74, respectively, for the prior year period. U.S. Federal Services Segment U.S. Federal Services Segment revenue for the third quarter of fiscal year 2025 increased 11.4% to $761.2 million, compared to $683.3 million reported for the prior year period. All growth was organic and driven primarily by a trend across this fiscal year of elevated volumes on programs in the clinical portfolio. The segment operating margin for the third quarter of fiscal year 2025 was 18.1%, compared to 15.5% reported for the prior year period. Processing of elevated volume on behalf of our customers across several different program areas provided additional benefit to this quarter's margin. The full-year fiscal 2025 operating margin for the U.S. Federal Services Segment is now expected to be approximately 15%. U.S. Services Segment U.S. Services Segment revenue for the third quarter of fiscal year 2025 decreased 6.9% to $439.8 million, compared to $472.3 million reported in the prior year period. Similar to the first two quarters of this year, the decrease resulted from the prior year period containing excess volumes from Medicaid-related activities, including the unwinding exercise that drove extra redeterminations. The segment operating margin for the third quarter of fiscal year 2025 was 10.2%, compared to 13.0% reported for the prior year period. The higher margin in the prior year period was a direct benefit of the excess volumes that were temporary. The full-year fiscal 2025 operating margin for the U.S. Services Segment is now expected to be approximately 10.5%. Outside the U.S. Segment Outside the U.S. Segment revenue for the third quarter of fiscal year 2025 decreased to $147.4 million, compared to $159.3 million reported in the prior year period. The revenue reduction was due to the divestitures of multiple employment services businesses in prior periods, and partially offset by positive organic growth of 7.3%. The segment operating margin for the third quarter of fiscal year 2025 was 4.0%, compared to an operating loss of 0.9% in the prior year period. A trend of improved profitability for the segment across this fiscal year continues following the divestitures of multiple employment services businesses. Sales and Pipeline Year-to-date signed contract awards at June 30, 2025, totaled $3.37 billion, and contracts pending (awarded but unsigned) totaled $1.44 billion. The book-to-bill ratio at June 30, 2025, was 0.8x as calculated on a trailing twelve-month basis. The sales pipeline at June 30, 2025, totaled $44.7 billion, comprised of approximately $3.05 billion in proposals pending, $1.20 billion in proposals in preparation, and $40.4 billion in opportunities we are tracking. New work opportunities represent approximately 63% of the total sales pipeline. Balance Sheet and Cash Flows At June 30, 2025, unrestricted cash and cash equivalents totaled $59.8 million, and gross debt was $1.67 billion. The ratio of debt, net of allowed cash, to consolidated EBITDA for the quarter ended June 30, 2025, as calculated on a trailing twelve-month basis in accordance with our credit agreement, was 2.1x compared to 1.9x at March 31, 2025. The current debt ratio stands at the low end of our 2x to 3x target net leverage range and recent quarters of increased borrowings are due to a combination of Maximus common stock purchases and temporary working capital needs. For the third quarter of fiscal year 2025, cash used in operating activities totaled $182.7 million and free cash flow was an outflow of $198.2 million. Operating cash flows were impacted primarily by payment delays on two large programs as contemplated in prior guidance in which Days Sales Outstanding (DSO) were estimated to peak in this quarter-ended June 30, 2025. DSO were 96 days at June 30, 2025, compared with 73 days at March 31, 2025. Subsequent to June 30, 2025, collections have improved substantially and are anticipated to continue through the end of this fiscal year. As a result, fiscal year 2025 guidance for free cash flow is increasing. The current Board of Directors authorization announced in December 2024 has $65.8 million available for future purchases of Maximus common stock. On July 5, 2025, our Board of Directors declared a quarterly cash dividend of $0.30 for each share of our common stock outstanding. The dividend is payable on August 31, 2025, to shareholders of record on August 15, 2025. Raising Fiscal Year 2025 Guidance Maximus is raising revenue, earnings, and free cash flow guidance for fiscal year 2025. Revenue guidance is increasing by $100 million at the midpoint and is now expected to range between $5.375 billion and $5.475 billion. The full year adjusted EBITDA margin guidance, which excludes divestiture-related charges, improves by 130 basis points to approximately 13%, compared to prior guidance. Guidance for adjusted diluted earnings per share, which excludes expense for amortization of intangible assets and divestiture-related charges, increases by $1.00 at the midpoint and is now expected to range between $7.35 and $7.55 per share for fiscal year 2025. Free cash flow guidance increases by $10 million at the midpoint and is now expected to range between $370 million and $390 million for fiscal year 2025. Interest expense is now estimated to be $81 million for fiscal year 2025. The full year tax rate is still expected to range between 28% and 29% and the weighted average shares outstanding forecast of approximately 58 million shares is unchanged for fiscal year 2025. Conference Call and Webcast Information Maximus will host a conference call this morning, August 7, 2025, at 9:00 a.m. ET. The call is open to the public and available by webcast or by phone at: 877.407.8289 (Domestic) / +1.201.689.8341 (International) For those unable to listen to the live call, a recording of the webcast will be available on About Maximus As a leading strategic partner to government, Maximus helps improve the delivery of public services amid complex technology, health, economic, environmental, and social challenges. With a deep understanding of program service delivery, acute insights that achieve operational excellence, and an extensive awareness of the needs of the people being served, our employees advance the critical missions of our partners. Maximus delivers innovative business process management, impactful consulting services, and technology solutions that provide improved outcomes for the public and higher levels of productivity and efficiency of government-sponsored programs. For more information, visit Non-GAAP Measures and Forward-Looking Statements This release contains non-GAAP measures and other indicators, including organic growth, free cash flow, operating income and EPS adjusted for amortization of intangible assets and divestiture-related charges, adjusted EBITDA, consolidated EBITDA (as defined by our Credit Agreement) and other non-GAAP measures. A description of these non-GAAP measures and details as to how they are calculated are included with our earnings presentation and forthcoming Form 10-Q. The presentation of these non-GAAP numbers is not meant to be considered in isolation, nor as alternatives to cash flows from operations, revenue growth, operating income, or net income as measures of performance. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures presented by other companies. Statements that are not historical facts, including statements about our confidence and strategies, and our guidance and expectations about revenues, results of operations, profitability, future contracts, market opportunities, market demand, or acceptance of our products are forward-looking statements that involve risks and uncertainties. These risks could cause our actual results to differ materially from those indicated by such forward-looking statements. The guidance is only effective as of the date given. We undertake no obligation to update the guidance herein as circumstances evolve. A Special Note Regarding Forward-Looking Statements is included within our forthcoming Form 10-Q and a summary of risk factors can be found in Item 1A, "Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2024, which was filed with the Securities and Exchange Commission (SEC) on November 21, 2024, as supplemented by the risk factor set forth in Part II, Item 1A "Risk Factors" in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which was filed with the SEC on May 8, 2025. Our SEC reports are accessible on Maximus, Inc. Consolidated Balance Sheets September 30, 2024 (unaudited) (in thousands) Assets: Cash and cash equivalents $ 59,777 $ 183,123 Accounts receivable, net 1,422,350 879,514 Income taxes receivable 5,661 5,282 Prepaid expenses and other current assets 117,243 132,625 Total current assets 1,605,031 1,200,544 Property and equipment, net 34,536 38,977 Capitalized software, net 217,433 187,677 Operating lease right-of-use assets 115,437 133,594 Goodwill 1,782,836 1,782,871 Intangible assets, net 561,566 630,569 Deferred contract costs, net 60,392 59,432 Deferred compensation plan assets 58,714 55,913 Deferred income taxes 11,059 14,801 Other assets 15,289 27,130 Total assets $ 4,462,293 $ 4,131,508 Liabilities and Shareholders' Equity: Liabilities: Accounts payable and accrued liabilities $ 281,994 $ 303,321 Accrued compensation and benefits 164,194 237,121 Deferred revenue, current portion 70,197 83,238 Income taxes payable 31,310 26,535 Long-term debt, current portion 48,263 40,139 Operating lease liabilities, current portion 39,882 47,656 Other current liabilities 70,311 69,519 Total current liabilities 706,151 807,529 Deferred revenue, non-current portion 48,990 45,077 Deferred income taxes 161,426 169,118 Long-term debt, non-current portion 1,608,982 1,091,954 Deferred compensation plan liabilities, non-current portion 58,736 57,599 Operating lease liabilities, non-current portion 83,390 97,221 Other liabilities 21,582 20,195 Total liabilities 2,689,257 2,288,693 Shareholders' equity: Common stock, no par value; 100,000 shares authorized; 56,350 and 60,352 shares issued and outstanding as of June 30, 2025, and September 30, 2024, respectively 627,496 598,304 Accumulated other comprehensive loss (12,629 ) (32,460 ) Retained earnings 1,158,169 1,276,971 Total shareholders' equity 1,773,036 1,842,815 Total liabilities and shareholders' equity $ 4,462,293 $ 4,131,508 Expand Maximus, Inc. Consolidated Statements of Cash Flows (Unaudited) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (in thousands) Cash flows from operating activities: Net income $ 105,981 $ 89,752 $ 243,746 $ 234,410 Adjustments to reconcile net income to cash flows from operations: Depreciation and amortization of property, equipment, and capitalized software 9,607 7,530 27,502 24,146 Amortization of intangible assets 23,010 23,542 69,041 68,532 Amortization of debt issuance costs and debt discount 736 1,697 2,046 2,899 Deferred income taxes (5,239 ) 4,545 (5,829 ) (3,770 ) Stock compensation expense 10,749 9,481 30,324 27,605 Divestiture-related charges — — 39,343 1,018 Change in assets and liabilities, net of effects of business combinations and divestitures: Accounts receivable (318,415 ) 65,857 (553,297 ) (26,528 ) Prepaid expenses and other current assets 1,398 (616 ) 9,341 19,316 Deferred contract costs 1,059 (4,777 ) (856 ) (8,377 ) Accounts payable and accrued liabilities (27,751 ) 4,642 (21,808 ) (1,659 ) Accrued compensation and benefits (2,368 ) (10,487 ) (50,369 ) (21,043 ) Deferred revenue 2,618 7,374 (8,675 ) 18,079 Income taxes 12,090 (2,734 ) 5,625 10,576 Operating lease right-of-use assets and liabilities (1,145 ) (1,746 ) (3,508 ) (2,131 ) Other assets and liabilities 4,952 5,268 (2,626 ) 8,351 Net cash (used in)/provided by operating activities (182,718 ) 199,328 (220,000 ) 351,424 Cash flows from investing activities: Purchases of property and equipment and capitalized software (15,488 ) (34,690 ) (55,686 ) (82,237 ) Asset acquisition — — — (18,006 ) Proceeds from divestitures — — 736 3,078 Other — — (2,165 ) — Net cash used in investing activities (15,488 ) (34,690 ) (57,115 ) (97,165 ) Cash flows from financing activities: Cash dividends paid to Maximus shareholders (16,904 ) (18,239 ) (51,865 ) (54,847 ) Purchases of Maximus common stock — (47,275 ) (306,443 ) (47,275 ) Tax withholding related to RSU vesting (10 ) — (16,451 ) (13,455 ) Payments for contingent consideration — (2,809 ) — (10,977 ) Payments for debt financing costs — (9,724 ) (1,658 ) (9,724 ) Proceeds from borrowings 376,208 426,757 1,335,208 850,166 Principal payments for debt (212,535 ) (488,038 ) (810,174 ) (952,825 ) Other (643 ) 3,996 (1,824 ) 9,118 Net cash provided by/(used in) financing activities 146,116 (135,332 ) 146,793 (229,819 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 1,528 155 (65 ) 1,270 Net change in cash, cash equivalents, and restricted cash (50,562 ) 29,461 (130,387 ) 25,710 Cash, cash equivalents, and restricted cash, beginning of period 155,938 118,340 235,763 122,091 Expand Maximus, Inc. Consolidated Results of Operations by Segment (Unaudited) For the Three Months Ended For the Nine Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (dollars in thousands) Revenue: U.S. Federal Services $ 761,174 $ 683,347 $ 2,319,756 $ 2,062,127 U.S. Services 439,818 472,298 1,334,418 1,448,258 Outside the U.S. 147,408 159,284 458,687 479,942 Revenue $ 1,348,400 $ 1,314,929 $ 4,112,861 $ 3,990,327 Gross profit: U.S. Federal Services $ 226,134 29.7 % $ 186,075 27.2 % $ 601,507 25.9 % $ 506,074 24.5 % U.S. Services 105,932 24.1 % 121,012 25.6 % 312,706 23.4 % 369,497 25.5 % Outside the U.S. 27,447 18.6 % 25,227 15.8 % 85,678 18.7 % 74,386 15.5 % Gross profit $ 359,513 26.7 % $ 332,314 25.3 % $ 999,891 24.3 % $ 949,957 23.8 % Selling, general, and administrative expenses: U.S. Federal Services $ 88,272 11.6 % $ 79,949 11.7 % $ 245,563 10.6 % $ 247,671 12.0 % U.S. Services 60,975 13.9 % 59,531 12.6 % 173,096 13.0 % 174,032 12.0 % Outside the U.S. 21,507 14.6 % 26,647 16.7 % 66,822 14.6 % 75,249 15.7 % Divestiture-related charges (2) — NM — NM 39,343 NM 1,018 NM Other (3) 77 NM 906 NM 599 NM 6,712 NM Selling, general, and administrative expenses $ 170,831 12.7 % $ 167,033 12.7 % $ 525,423 12.8 % $ 504,682 12.6 % Operating income: U.S. Federal Services $ 137,862 18.1 % $ 106,126 15.5 % $ 355,944 15.3 % $ 258,403 12.5 % U.S. Services 44,957 10.2 % 61,481 13.0 % 139,610 10.5 % 195,465 13.5 % Outside the U.S. 5,940 4.0 % (1,420 ) (0.9 )% 18,856 4.1 % (863 ) (0.2 )% Amortization of intangible assets (23,010 ) NM (23,542 ) NM (69,041 ) NM (68,532 ) NM Divestiture-related charges (2) — NM — NM (39,343 ) NM (1,018 ) NM Other (3) (77 ) NM (906 ) NM (599 ) NM (6,712 ) NM Operating income $ 165,672 12.3 % $ 141,739 10.8 % $ 405,427 9.9 % $ 376,743 9.4 % Expand (1) Percentage of respective revenue, as applicable. Percentages not considered meaningful are marked "NM." (2) During fiscal years 2025 and 2024, we have divested businesses from our Outside the U.S. Segment. (3) Other expenses includes credits and costs that are not allocated to a particular segment. Expand Maximus, Inc. Non-GAAP Adjusted Results - Operating Income, Adjusted EBITDA, Net Income, and Diluted Earnings per Share (Unaudited) For the Three Months Ended For the Nine Months Ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 (dollars in thousands, except per share data) Operating income $ 165,672 $ 141,739 $ 405,427 $ 376,743 Add back: Amortization of intangible assets 23,010 23,542 69,041 68,532 Add back: Divestiture-related charges — — 39,343 1,018 Add back: Depreciation and amortization of property, equipment, and capitalized software 9,607 7,530 27,502 24,146 Adjusted EBITDA (Non-GAAP) $ 198,289 $ 172,811 $ 541,313 $ 470,439 Adjusted EBITDA margin (Non-GAAP) 14.7 % 13.1 % 13.2 % 11.8 % Net income $ 105,981 $ 89,752 $ 243,746 $ 234,410 Add back: Amortization of intangible assets, net of tax 16,958 17,350 50,883 50,508 Add back: Divestiture-related charges — — 39,343 1,018 Adjusted net income excluding amortization of intangible assets and divestiture-related charges (Non-GAAP) $ 122,939 $ 107,102 $ 333,972 $ 285,936 Diluted earnings per share $ 1.86 $ 1.46 $ 4.20 $ 3.81 Add back: Effect of amortization of intangible assets on diluted earnings per share 0.30 0.28 0.88 0.82 Add back: Effect of divestiture-related charges on diluted earnings per share — — 0.67 0.02 Adjusted diluted earnings per share excluding amortization of intangible assets and divestiture-related charges (Non-GAAP) $ 2.16 $ 1.74 $ 5.75 $ 4.65 Expand
Forbes
29-07-2025
- Politics
- Forbes
Abortion and the 2026 Elections
On the third anniversary of the Supreme Court Dobbs' decision that returned abortion to the states, news outlets provided summaries of new developments, and Gallup, among other pollsters, helpfully updated its attitudinal trends. Much of the coverage was muted and missed a salient point. But first, let's look at what has changed since the decision was handed down in June 2022. According to a new #WeCount report, the number of abortions was higher in 2024 than 2023 or 2022. One in four of these was provided through telehealth services. Many state ballot measures protecting or enshrining abortion legality in state constitutions have passed, but there have been exceptions. In 2024, broadening abortion rights did not meet the high 60% threshold for passage in Florida, and in two other states, Nebraska and South Dakota, these measures failed. In 31 states and Washington, DC, abortion is broadly legal. Abortion is not the top issue in recent major polls, lagging significantly behind people's concerns about the economy, foreign policy, and the Trump presidency. Democrats themselves, who generally strongly support abortion rights, are also placing other issues than abortion at the forefront. Recent critical New York Times and Wall Street Journal pieces on troubling internal politics at Planned Parenthood may diminish the support of a reliable election ally for Democrats. Court cases challenging Medicaid-related cuts to Planned Parenthood clinics are also unlikely to generate significant national interest. Attitudes at the state level significantly vary, as PRRI (formerly the Public Religion Research Institute) found. Eighty percent in Vermont, for example, said abortion should be legal in all or most cases, while only 43% in Louisiana echoed that response. Opinion on abortion rights expansion is generally supportive but far from unanimous, as Gallup shows in its recent updates on abortion attitudes. It is also politically important that Donald Trump has muddied the waters on abortion nationally with his ambivalent and sometimes contradictory positions. Taken together, these factors suggest that abortion won't be a top-tier national issue next year. The highly regarded Democratic pollster Celinda Lake hinted at what I think was missing in much of the coverage of the Dobbs anniversary when she told the Washington Post: 'Despite a lot of efforts, the economy became nationalized and abortion became localized, and that was a bad situation for the Democrats.' Lake and other pollsters know that it is difficult to sustain the intensity that an issue like abortion had immediately after the Court's Dobbs' is especially true when issues such as the economy take center stage. When an issue is 'localized' as Lake suggests, it gets significant local coverage, but absent broader developments, it is unlikely to animate the whole country. The issue recedes as a national flashpoint. This is federalism at work. Recent abortion policy cases in South Carolina and West Virginia and several other states are unlikely to capture national attention. The FDA's review of the latest data on mifepristone may become a potential national flashpoint, but most other cases have more of a local impact. So what does this mean for 2026 and beyond? The margin in the House of Representatives is very narrow and the Democrats could take control. Abortion will no doubt play a role in some races, especially in states with measures on the ballot. At this early point, Ballotpedia finds that there are two on the ballot (Missouri and Nevada). Women are more likely than men to be engaged on the issue, but it is too early to tell how important it will be for most of them. In Gallup's May survey, 61% of women compared to 41% of men identify themselves as pro-choice and 56% of them compared to 41% of men say it should be legal in any or most circumstances. Partisanship plays a strong role here, too. Far more Democrats, 81%, believe abortion should be legal in any or most circumstances compared to 20% of Republicans. As Gallup noted, the groups that were most supportive of abortion legality before Dobbs are even more supportive today. As we get closer to the election next year, pollsters will likely update a question that asks people whether abortion will be the most important issue in casting their vote, one of many important issues, or not central to their vote. The 'most important' response has risen in Gallup's data from 13% in 1992 to 32% in 2024 among registered voters. These responses indicate people's feelings about the issue, and they don't necessarily translate into a vote decision. The action in 2026 will be in the states, and the issue will be muted nationally.
Politico
10-07-2025
- Health
- Politico
Republicans in Washington are nervous about Medicaid. Not in Valadao's California district
Hospitals in the district also rely on the program to keep their doors open. They collectively receive $820 million a year from it, and roughly 50 percent of their patients are enrolled in Medi-Cal, California's version of Medicaid. Medi-Cal is the largest payer for every hospital Valadao represents, including Kern Medical Center, which gets more than 70 percent of its funding from the public insurance program, according to data compiled by the California Health Care Foundation. Valadao himself has been aware of the liability of cutting Medicaid. Confronting a months-long barrage of Medicaid-related attack ads in his district, he lobbied — ultimately unsuccessfully — against deeper cuts to the program in the Senate version of the megabill that eventually passed. Valadao's office did not respond to a request for comment Wednesday but did release a 555-word statement after his vote calling it a 'hard decision.' 'Ultimately, I voted for this bill because it does preserve the Medicaid program for its intended recipients — children, pregnant women, the disabled, and elderly,' he said. He went on to tout funding for rural hospitals and said the Trump administration assured him that money would benefit hospitals in Valadao's district. While Senate Republicans included $50 billion over five years for rural hospitals , it's unclear how much of that will come to California and if it would be enough to keep hospitals open. Amanda McAllister-Wallner, executive director of the progressive health consumer advocacy group Health Access, said the discretion written into the bill is meant to help hospitals in Missouri, not the Central Valley. 'We think of California as rural, but it's not always what the national definition of 'rural' would be,' she said. 'Fresno and Bakersfield are pretty big cities in the context of the United States at large.' A list of hospitals circulated by Senate Democrats identified 28 rural hospitals in California that could close under the budget deal. None are strictly in Valadao's district but several, like Mountains Community Hospital and Adventist Health in Tehachapi and Reedley, are in surrounding areas.
Newsweek
04-07-2025
- Health
- Newsweek
Republican Unloads Medicaid-Related Stock Before Voting For Trump Tax Bill
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. A Republican Congressman sold a Medicaid-related stock before voting for President Donald Trump's massive tax and spending package, which affects Medicaid. In May, Pennsylvania Representative Robert Bresnahan sold stocks in Centene Corporation, a healthcare company that works as an intermediary for government and private healthcare programs, while debates about the tax package, called the "One Big, Beautiful Bill," continued. The trade has recently been made publicly available. Newsweek contacted representatives for Bresnahan by email outside of business hours to comment on this story. Why It Matters The House of Representatives on Thursday passed the "One Big, Beautiful Bill" 218 votes to 214 after months of internal GOP divisions and last-minute negotiations. UNITED STATES - NOVEMBER 15: Rep.-elect Robert Bresnahan, R-Pa., poses for a photo on the House steps after freshman members of Congress posed for their class photo on the House steps of the Capitol on... UNITED STATES - NOVEMBER 15: Rep.-elect Robert Bresnahan, R-Pa., poses for a photo on the House steps after freshman members of Congress posed for their class photo on the House steps of the Capitol on Friday, November 15, 2024. More Bill Clark/CQ Roll Call via AP Images The legislation extends Trump's 2017 tax cuts, eliminates taxes on tips and overtime, and boosts funding for immigration enforcement and defense. The bill will also reduce Department of Health and Human Services budget by $880 billion over 10 years, which would include cuts to Medicaid alongside other measures such as implementing work requirements. The CBO estimates that the bill would result in 11.8 million people losing health insurance by 2034, with the majority of those people losing coverage from Medicaid. Meanwhile, members of Congress are allowed to buy and sell stocks, but the practice has attracted bipartisan criticism because of concerns it may facilitate insider trading, if lawmakers are privy to information about assets that could move markets. There are also concerns politicians with stock holdings can influence the assets they hold to inflate their share value. What To Know According to his financial disclosures, Bresnahan purchased between $1,001 and $15,000 in Centene Corporation on April 8. On May 15, he sold those stocks. This came a week before the legislation initially passed in the House. In July, it was reported that shares in the company fell almost 40 percent after the insurer predicted its 2025 revenues would be hit. The disclosures were first reported by data platform Quiver Quantitative, which claimed Bresnahan does not manage his own stock portfolio and plans to set up a blind trust. What People Are Saying Speaking to Newsweek, Veljko Fotak, a finance professor at the University at Buffalo in New York, said the trade "definitely is not appropriate." "It does suggest he thought the value of the shares would tank. His position allowed him to be a better judge of that probability than you or I. He did not have clear foresight—but he did have an unfair advantage, compared to other traders. "I will also say – the moral optics are made worse by the nature of the event. Profiting from inside information regarding the likelihood of legislation passing is ugly enough—when that inside information is about millions of individuals losing access to Medicare, the optics are somehow even worse.... This is Nero selling lumber while Rome is burning." On X, New Mexico Democrat Melanie Stansbury wrote: "This Congressman literally dumped stock in a Medicaid provider company right before this bill came to the Floor. Don't be fooled—these guys know exactly what they're doing." Elizabeth Warren, a Democratic Senator from Massachusetts, wrote: "Protecting his stock portfolio while ripping away health care from 17 million Americans This is Washington at its worst. We need to ban Congressional stock trading."
Scientific American
03-07-2025
- Health
- Scientific American
How Massive Medicaid Cuts Will Harm People's Health
Money can't necessarily buy an individual good health—but for a society, it can. On July 3 the House of Representatives will vote on the Trump administration's new budget bill, which incorporates massive cuts to Medicaid, the state-federal health insurance program that serves more than 70 million low-income people. The bill, which passed the Senate on July 1, would cut $930 billion from Medicaid, Medicare and Affordable Care Act funding combined over 10 years, with more than 11 million people losing coverage by 2034. Experts have calculated that, taken together, the cuts will lead to more than 51,000 additional deaths per year by decreasing people's access to health care. Experts say the evidence shows that gutting Medicaid will have dramatic effects on health far beyond people enrolled today—some of whom may not even realize they use Medicaid because the program goes by different names in different states. Even those with private insurance will be affected. On supporting science journalism If you're enjoying this article, consider supporting our award-winning journalism by subscribing. By purchasing a subscription you are helping to ensure the future of impactful stories about the discoveries and ideas shaping our world today. 'When you slash $1 trillion from the health care system, you can't expect it not to have far-reaching harms,' says Megan Cole Brahim, a health policy researcher at Boston University. 'It will really affect everyone, including people who aren't enrolled in Medicaid.' The bill includes two main Medicaid-related provisions. One increases the requirements people must meet to qualify for and remain on Medicaid: This would drive down the total number of people who receive benefits, Cole Brahim says, leaving more people without coverage. The second provision reduces the amount of money the federal government sends to the states to fund Medicaid coverage. This will cause great variability in how different states handle the cuts, she notes, because each state will have authority to make its own choices about whether to try to scrounge up the funding from other sources to close the gap and maintain Medicaid access. Medicaid's Overall Health Impacts Cuts to Medicaid at the scale proposed in the House and Senate bills are unprecedented, Cole Brahim says, but scientists still have plenty of data to work from to predict the effects of such a massive cut. Researchers have tracked differences in health outcomes in states where Medicaid was expanded, particularly after the passage of the 2010 Affordable Care Act. That legislation gave states the option of extending Medicaid coverage to more people, up to those with an income of 138 percent of the federal poverty level, with federal support. So far, 40 states and Washington, D.C., have opted for expansion—and researchers have monitored health outcomes over time in those states compared with states that did not. 'Medicaid expansion was really a natural experiment,' says Brian Lee, a transplant hepatologist at the University of Southern California, who was co-author of a 2022 study in the Lancet that evaluated death rates in conjunction with Medicaid expansion across the U.S. When Medicaid coverage was offered to more people, overall death rates fell by nearly 12 per 100,000 adults per year on average. Where states were home to more women or more Black people, the decline in death rate was larger. And Lee notes that the 2022 findings are just the bird's-eye view of the way Medicaid access shapes people's health. For example, studies have found that more people get diagnosed with chronic conditions such as diabetes and cardiovascular disease in Medicaid expansion states. Earlier diagnosis permits earlier treatment, which, logically, would reduce mortality rates over the course of decades. 'Medicaid expansion, in relative terms, is pretty new,' Lee says; the earliest states began implementing the program in 2014. 'A lot of people think that, actually, the best benefits are to come' —or at least, they thought that they were to come. Medicaid for Specific Needs The new policy changes won't just affect the people who lose access to Medicaid in the short term. 'This isn't a small program for a fraction of our population,' Cole Brahim says. 'It covers about one in five people, and the majority of people in the United States will have had Medicaid at some point in their life.' One key area in which Medicaid is crucial is older adult health services and other long-term support, including both home-based care and residential facilities, says Jasmine Travers Altizer, a researcher at New York University who studies aging. Two out of three people in the U.S. will require some form of long-term health services at some point in their life, she says. Even after people reach the age of 65, Medicare—a companion federally run insurance program for older adults —only covers nursing home and daily home health care services for 100 days, she notes. Many people don't have independent long-term care coverage, which can cost thousands of dollars a year in premiums, leaving them with no real alternative to Medicaid. And when people can't access proper medical care, they often need to rely on relatives for support, including full-time care—which comes with its own economic consequences for families and society at large. Our youngest populations also depend on Medicaid, Cole Brahim says. More than two in five births are paid for by the service —a proportion that rises to more than half for Black and Hispanic births. And although proponents of the Trump administration's Medicaid cuts say that these changes wouldn't affect pregnant people and kids, Cole Brahim notes that they would absolutely prevent some people from having coverage before pregnancy. 'Making sure people are connected to care before they become pregnant is really critical for maximizing health outcomes, both for the mom and the baby,' she says. Medicaid Cuts Lead to Provider Shortages All three experts emphasize a universal risk to Medicaid cuts: the reduction of health care facilities and personnel. Federal Medicaid funds are used to directly cover care of individuals on Medicaid, but this money indirectly keeps practitioners' and hospitals' doors open. The steep cuts to federal funding will ultimately mean doctors and hospitals have more trouble making ends meet. As facilities begin to close, people in affected communities—regardless of their insurance provider—will face longer wait times for appointments and longer travel times to facilities that are still in operation. People in more rural communities, which are already underserved, may lose care access entirely, even while remaining insured. Cole Brahim is particularly worried that obstetric and pediatric care will see more closures, noting that these departments are often less profitable because insurance providers already reimburse these services at lower rates, she says. Travers Altizer is also concerned about the cuts' effects on nursing homes, which are in crisis as well. In one recent survey of nursing home providers, 27 percent said they would have to close their facilities if Medicaid cuts occurred. Even more—58 percent—said they would need to reduce current staffing; 44 percent they would slow new hires. For Travers Altizer, those possibilities mark a return to the early days of COVID, when staffing shortages left some nursing home residents unable to get out of bed or otherwise meet basic needs. She also notes that people whose lose Medicaid coverage because of cuts will still need to seek care; they'll just do it in different ways—ways that are ultimately more expensive overall. Rather than primary care visits, people will lean on emergency rooms. Without skilled medical support, people will rely on friends and family. Without federal money, people will continue turning to online fundraising platforms such as GoFundMe at ever increasing rates. 'There's this big idea that we need to cut Medicaid [because] we need to save money, and Medicaid is this big federal government program,' Travers Altizer says. 'But taking away this support won't save money; it's going to shift costs.'
