Health Insurance Armageddon, Savings Aren’t In The Contract, Woebot Shuts Down App

Hey all,

Happy Monday! It looks like big health insurance companies are in for some tough times. Growth has become harder to come by as the benefits of vertical integration are being thwarted by agile insurgents and government. With companies like UnitedHealthcare and Centene seeing massive stock losses really it’ll be interesting to see which giants don’t survive the upcoming downturn. Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX)

(Becker’s Payer) Health Insurance Industry Downturn

Former Molina Healthcare CEO J. Mario Molina warned that the health insurance industry is entering a prolonged downturn due to structural issues in Medicaid and ACA markets, mounting pressure on prior authorizations, and growing scrutiny of pharmacy benefit managers. He cited recent earnings guidance withdrawals from Centene and UnitedHealth as evidence of deeper market instability and linked worsening conditions to a Senate budget bill proposing massive Medicaid cuts and the lapse of ACA subsidies. Molina argued this is not a short-term fluctuation but a systemic unraveling driven by industry hubris and political shifts. Full Article

(IQVIA) 340B Patient Discounts at Contract Pharmacies

A new IQVIA white paper finds that just 0.17% of branded prescriptions at contract pharmacies used 340B discount cards from 2020 to 2024, showing minimal patient benefit. Despite claims to the contrary, manufacturer restrictions on contract pharmacy use did not reduce patient assistance—card usage actually rose slightly. Still, support remains far below the 32% uninsured/underinsured rate, with Disproportionate Share Hospitals offering the least aid relative to their 340B prescription volume. And since most patients don’t even know they’re using contract pharmacies, the real charity seems to be reserved for national chains and PBM-owned pharmacies cashing in on the margins. Full Article

(STAT) Woebot’s Shutdown Amid AI and Regulatory Tensions

Woebot Health has shut down its flagship therapy chatbot after struggling to navigate outdated FDA regulations and keep pace with rapidly evolving generative AI technologies. Despite serving 1.5 million users with a scripted, cognitive behavioral therapy-based tool, the company found it increasingly difficult to secure regulatory approval while competing against more flexible, LLM-powered chatbots now dominating the market. Founder Alison Darcy plans to pivot toward new, non-clinical AI experiences that avoid regulatory bottlenecks but still deliver meaningful emotional support. Full Article