Your Health Plan Is a Bond You Didn’t Price

First: the administration plans to end a subsidy program that has been quietly holding down premiums on Medicare prescription-drug plans. If that proceeds, many seniors will see materially higher Part D rates next year. Notice the shape of that sentence — a 2027 premium shock, announced in a 2026 news story, buried on page A3. Nobody’s monthly statement changed this week. The bond just got marked down anyway.

Here is how I think about it: your future health costs behave like a bond you are short. The coupons rise with age, the duration is your lifespan, and unlike an actual bond, you cannot sell it. You can only manage the coupons. This week the issuer — Washington — reset the coupon on twenty-some million people, and it barely made the front section.

Second: Humana cut its earnings outlook, again, on weaker Medicare Advantage star ratings. When the insurers themselves are struggling to make the math work, the polite era of generous Advantage extras is ending. Those plans will get stingier at the margins, and the margins are where the benefits were.

Third, and I found this one genuinely fascinating: Vermont — Bernie Sanders’s Vermont — is loosening its insurance rules in a distinctly market-flavored direction. For years the state required insurers to charge the young nearly the same as the old, a 5% age variation against the 3-to-1 allowed federally. The result was the highest ObamaCare premiums in America, because the young and healthy looked at the price and left. Now Vermont is letting insurers price for age and nicotine use to lure them back. I do not bring this up to score a political point. I bring it up because it is the cleanest demonstration you will ever see that premiums are information, and when you legislate the information away, the people subsidizing everyone else simply exit.

What do I actually do about all this in a practice? Three things, none of them heroic. Every client on Medicare gets their Part D re-shopped every single October — open enrollment starts October 15, it takes under an hour, and after a repricing year like the one being teed up, defaulting into renewal is donating money. Every client in their mid-fifties gets the long-term-care conversation now, not at seventy-five when the underwriting laughs at us. And for families carrying both a portfolio and a diagnosis, there is a structure we use — a permanent policy with a $250,000 death benefit and a 4% long-term-care rider, running around $200 a month — that turns the scariest coupon in the household into a fixed, known number.

And fourth, because this section should end with the good news: the American Heart Association said this week that up to five cups of coffee a day is fine for most adults, possibly even good for the heart. Every risk in this letter costs money to manage. That one is free. Enjoy it.