In 2025, we whiffed. It would have been a smart move to wager on the anti-portfolio. Although we (as usual 😂) believe some of our forecasts might eventually materialize, a candid assessment indicates we performed similarly to the Jets/Mets: achieving success in only two out of ten instances.
TL;DR
- 2025 forecasts were largely inaccurate, with success in only two out of ten predictions.
- Key misses included skepticism about AI point solutions and expectations for Medicare Advantage.
- Predictions for 2026 include Humana's struggles, employers leaving PBMs, and CMS creating AI billing codes.
- Further 2026 forecasts suggest measles outbreaks, AI agent issues, lower cell/gene therapy costs, and continued drug trend increases.
We nailed more payor CEOs losing their jobs (Andrew Witty and Lois Quam) and cell therapy coming back into fashion (four acquisitions, notably Capstan by Abbvie at $2.1B). Otherwise, we were spectacularly poor. We were too skeptical about how long AI point solutions would remain healthcare investor darlings, propping up seemingly nonsensical businesses, and there was only one “down” health tech IPO, Hinge, that has done nicely since. We expected Medicare Advantage (MA) to come roaring back in 2025 but the Trump team has not put their thumb on the scales. We are surprised (and not sure we agree) that the Centers for Medicare and Medicaid Services (CMS) is forecasting MA to shrink in 2026 by 1 million members. We also expected to see risk adjustment and “Stars” eased and more generous premium increases.
Major corporations caught us off guard with their actions and inactions. Specifically, HCSC's readiness to expend a significant amount of capital by Purchasing Cigna’s MA portfolio and Illumina, which saw a 40% decline in 2025, has remained unacquired (despite a positive Q3 earnings rebound). We were also taken aback that Apple failed to introduce glucose monitoring with WatchOS 26, contrary to our repeated forecast that prominent technology firms would fall short in the healthcare sector.
Following a period of intermittent tariffs, widespread public health disruption, and unfortunately, the termination of substantial research grants and health insurance for numerous individuals, we anticipate a more tranquil 2026. Here are our forecasts for the upcoming year…
- Humana crashes. Humana made an aggressive bid for 2026, presenting more advantageous Medicare Advantage plans across nearly all counties. We anticipate this will lead to exceptional membership expansion, exceeding 1 million new enrollees. The challenge with Medicare Advantage expansion is the potential for substantial financial losses if not managed prudently. We believe Humana is poised to incur significant deficits and provoke activist investors demanding alterations.
- Large employers flee the big three Pharmacy Benefit Managers (PBMs). From the recent years of PBM scrutiny, a key takeaway is that PBMs excel at creating novel charges and safeguarding their profits. We anticipate that major employers will ultimately declare they've had enough of these deceptive tactics. Competitors to the dominant three now possess a history of cost reductions and client support that justifies the potential risks of making a change (for what it's worth, our forecast is that these alternative collaborators will perform favorably).
- CMS creates a billing code for AI. The Trump Administration is bullish on AI for everything in healthcare: reducing fraud, waste and abuse, data analytics, remote monitoring, reducing administrative complexity, preventive care, and expanding access to care. To encourage innovation, we think CMS will create billing codes for AI. This will spawn a slew of new products, some that gain exciting traction, and, unfortunately, also a lot of fraud. Also, we think it is far from certain if AI will make our healthcare cost problem better or worse. Without payment model innovation, we could see AI being used to optimize our existing fee-for-service model, which unfortunately could generate increased care and expense.
- Multiple Measles outbreaks. Sadly, we think the dismantling of the CDC coupled with many states making it easy to opt out of vaccines is going to go very badly. Measles is the most infectious of childhood diseases and as community vaccine rates fall it will come roaring back.
- AI agents gone wild, but there are some benefits. Agentic AI exhibits strong adherence to rules and a focus on objectives. We anticipate this will result in absurd outcomes. Before long, agents will communicate with other agents, perpetually looping without reaching compromises or refusals. Although this will prove advantageous for automating numerous workflows previously handled via phone and fax, we foresee a substantial volume of escalations to human personnel due to a lack of consensus on shared protocols between payers and providers. Furthermore, we predict an increase in grievances concerning agentic calls exceeding the duration of traditional human-led conversations.
- Lower cost cell & gene therapies. Over the subsequent 5 years, a significant reduction in the cost of cell and gene therapies is anticipated. Scientific and production advancements are expected to result in manufacturing expenses ranging from $5,000 to $50,000, enabling reduced costs for those who pay. Furthermore, access to these medical interventions will be substantially enhanced, stemming not only from lower production expenses but also from optimized processes and a better understanding of their side effects. We project that the initial signs of this advancement will become apparent beginning in 2026.
- Big talk but no progress on commercial drug trend. Donald Trump has made strong statements regarding the cost of medications, introducing TrumpRx, affordable GLP-1s, threats of tariffs if American prices don't align with European ones, and more assertive Medicare negotiations. Notwithstanding these pronouncements, we anticipate that the trajectory of drug expenses for businesses and individuals with commercial insurance will continue to increase in 2026, rather than decrease. Overall expenditure on pharmaceuticals will persist in its upward movement as an expanding number of individuals commence treatment, especially given the wider availability of GLP-1s due to price reductions offered by Novo and Lilly. The primary difficulty for insurance providers and employers will not solely be the financial outlay for GLP-1s, but rather determining methods to discontinue patient use by combining medication with significant lifestyle adjustments to sustain weight loss and health improvements.
- Republicans keep control of the House and expand their majority. In a surprising turn of events, Trump sidesteps a midterm recalibration due to redistricting, thereby expanding the majority. We surmise this is achievable because the U.S. Economy sustains its extraordinary, AI-driven resilience and Trump receives commendation for the tranquil conclusion of the Israel and Ukraine conflicts (we trust).
- Inflation runs hot. In our economics studies, we were taught that tariffs represent taxes borne by consumers. We maintain this perspective. Consequently, we surmise that businesses can't indefinitely postpone, notwithstanding the valid apprehension of being targeted by a retaliatory White House, the process of transferring their expenses to buyers. We anticipate inflation will surge in 2026, and consequently, interest rates will persist at elevated levels beyond projections as the Federal Reserve acts in opposition to Trump. Although difficult, we don't believe this will be sufficient to counteract the factors driving our initial forecast.
- AI doctors are good doctors and bad standalone businesses. We are stunned by how well AI can deliver clinical care. That said, we are not optimistic that AI-native clinical services will be durable standalone businesses. We do think these products and features will be awesome complements within a broader organization to deliver care, provide better access and make a lot more possible between visits, monitoring, and hopefully decreasing overall episode of care costs. As a result, we expect the traditional “iron triangle” of cost, quality, and access in healthcare to bend, as AI makes it possible to apply clinical intelligence at scale rather than only through human labor.
We're offering two additional forecasts. Perhaps this is an attempt to compensate for our subpar 2025 results, but we're driven to predict that Judy Faulkner will conclude that the danger of antitrust action and her age of 82 necessitate divesting Epic to Microsoft , , a company well-versed in antitrust matters, which believes the strategic move to secure dominance in Oracle is a worthwhile endeavor.
We're reinforcing our 2025 forecast that Apple will excel at glucose monitoring. While we lack any inside information, we truly wish for this to materialize, given the potentially enormous advantages for public health.
We anticipate providing an update on these matters in twelve months and trust that our foresight will be more accurate for the year 2026. We extend to you all a delightful holiday period and a healthy new year.
Coins2Day.com's commentary pieces present exclusively the perspectives of their contributors, not necessarily the viewpoints and convictions of Coins2Day .
