Category Archives: UnitedHealthcare

Inside the Midyear Panic at UnitedHealth

Posted on by • Posted in 2026 Mid Term Election Issues, 2028 Election Issues, Health Insurance Coverage Adequacy, Health Insurance Denial, Health Insurance Industry, Health Insurance Pre Authorization, Health Insurance Premiums, Health Policy, Healthcare Reform, High Premiums, Medical Loss Ratio (MLR), Medicare Advantage, Medicare Advantage Denials, Medicare Advantage Overpayments, Out of Network, Out of Pocket Expenses, Profit, Profit Margin, Profit Model, Profit Motive, UnitedHealth Group, UnitedHealthcare • Tagged , , , , • Leave a comment

https://healthcareuncovered.substack.com/p/inside-the-midyear-panic-at-unitedhealth

Imagine you’re facing your midyear performance review with your boss. You dread it, even though you’ve done all you thought possible and legal to help the company meet Wall Street’s profit expectations, because shareholders haven’t been pleased with your employer’s performance lately.

Now let’s imagine your employer is a health insurance conglomerate like, say, UnitedHealth Group. You’ve watched as the stock price has been sliding, sometimes a little and on some days crashing through lows not seen in years, like last Friday (down almost 5% in a single day, to $237.77, which is down a stunning 62% since a mid-November high of $630 and change).

You know what your boss is going to say. We all have to do more to meet the Street’s expectations. Something has changed from the days when the government and employers were overly generous, not questioning our value proposition, always willing to pick up the tab and pay many hidden tips, and we could pull our many levers to make it harder for people to get the care they need. 

Despite government and media reports for years that the federal government has been overpaying Medicare Advantage plans like UnitedHealth’s – at least $84 billion this year alone – Congress has pretended not to notice. There is evidence that might be changing, with Republicans and Democrats alike making noises about cracking down on MA plans. 

Employers have complained for ages about constantly rising premiums, but they’ve sucked it up, knowing they could pass much of the increase onto their workers – and make them pay thousands of dollars out of their own pockets before their coverage kicks in. Now, at least some of them are realizing they don’t have to work with the giant conglomerates anymore.

Doctors and hospitals have complained, too, about burdensome paperwork and not getting paid right and on time, but they’ve largely been ignored as the big conglomerates get bigger and are now even competing with them.

UnitedHealth is the biggest employer of doctors in the country. But doctors and hospitals are beginning to push back, too. 

Since last fall, UnitedHealth and its smaller but still enormous competitors have found that “headwinds” are making it harder for them to maintain the profit margins investors demand. That is mainly because, despite the many barriers patients have to overcome to get the care they need, many of them are nevertheless using health care, often in the most expensive setting – the emergency room. They put off seeing a doctor so long because of insurers’ penny-wise-pound-foolishness that they had some kind of event that scared them enough to head straight to the ER. 

It’s not just you who is dreading your midyear review. Everybody, regardless of their position on the corporate ladder, and even the poorly paid folks in customer service, are in the same boat. And so is your boss. Nobody will put the details of what has to be done in writing. They don’t have to. Your boss will remind you that you have to do your part to help the company achieve the “profitable growth” Wall Street demands, quarter after quarter after quarter. It never, ever ends. You know this because you and most other employees watch what happens after the company releases quarterly financials. You also watch your 401K balance and you see the financial consequences of a company that Wall Street isn’t happy with. And Wall Street is especially unhappy with UnitedHealth these days.

And when things are as bad as they are now at UnitedHealth’s headquarters in Minnesota, you know that a big consulting firm like McKinsey & Company has been called in, and that those suits will recommend some kind of “restructuring” and changes in leadership to get the ship back on course. You know the drill. Everybody already is subject to forced ranking, meaning that at the end of the year, some of your colleagues, regardless of job title, will fall below a line that means automatic termination. You pedal as fast as you can to stay above that line, often doing things you worry are not in the best interest of millions of people and might not even be lawful. But you know that if you have any chance of staying employed, much less getting a raise or bonus, you have to convince your superiors you are motivated and “engaged to win.” No one is safe. Look what happened to Sir Andrew Witty, whose departure as CEO to spend more time with his family (in London) was announced days after shareholders turned thumbs down on the company’s promises to return to an acceptable level of profitability. 

If you are at UnitedHealth, you listened to what the once and again CEO, Stephen Hemsley, and CFO John Rex, who got shuffled to a lesser role of “advisor” to the CEO last week, laid out a new action plan to their bosses – big institutional investors who have been losing their shirts for months now. You know that what the C-Suite promised on their July 29 call will mean that you will have to “execute” to enable the company to deliver on those promises. And you know that you and your colleagues will have to inflict a lot more pain on everybody who is not a big shareholder – patients, taxpayers, employers, doctors, hospital administrators. That is your job. And you will try to do it because you have a mortgage, kids in college and maxed-out credit cards.  

Here’s what Hemsley and his leadership team said, out loud in a public forum, although admittedly one that few people know about or can take an hour-and-a-half to listen to:

  • Even though UnitedHealth took in billions more in revenue, its margins shrank a little because it had to pay more medical claims than expected.
  • Still, the company made $14.3 billion in profits during the second quarter. That’s a lot but not as much as the $15.8 billion in 2Q 2024, and that made shareholders unhappy.
  • Enrollment in its commercial (individual and employer) plans increased just 1%, but enrollment in its Medicare Advantage plans increased nearly 8%. That’s normally just fine, but something happened that the company’s beancounters couldn’t stop.
  • Those seniors figured out how to get at least some care despite the company’s high barriers to care (aggressive use of prior authorization, “narrow” networks of providers, etc.)

To fix all of this, Hemsley and team promised:

  • To dump 600,000 or so enrollees who might need care next year
  • To raise premiums “in the double digits” – way above the “medical trend” that PriceWaterhouseCoopers predicts to be 8.5% (high but not double-digit high)
  • Boot more providers it doesn’t already own out of network
  • Reduce benefits

Throughout the call with investors (actually with a couple dozen Wall Street financial analysts, the only people who can ask questions), Hemsley and team went on and on about the “value-based care” the company theoretically delivers, without providing specifics. But here is what you need to know: If you are enrolled in a UnitedHealth plan of any nature – commercial, Medicare or Medicaid or VA (yes, VA, too) – expect the value of your coverage to diminish, just as it has year after year after year.  

The term for this in industry jargon is “benefit buydown.”

That means that even as your premiums go up by double digits, you will soon have fewer providers to choose from, you likely will spend more out-of-pocket before your coverage kicks in, you might have to switch to a medication made by a drug company UnitedHealth will get bigger kickbacks from, and you might even be among the 600,000 policyholders who will get “purged” (another industry term) at the end of the year.

Why do we and our employers and Uncle Sam keep putting up with this?

Yes, we pay more for new cars and iPhones, but we at least can count on some improvements in gas mileage and battery life and maybe even better-placed cup holders. You can now buy a massive high-def TV for a fraction of what it cost a couple of years ago. Health insurance? Just the opposite. 

As I will explain in a future post, all of the big for-profit insurers are facing those same headwinds UnitedHealth is facing. You will not be spared regardless of the name on your insurance card. If you still have one come January 1. Pain is on the way. Once again. 

How Drug Prices Got So Bloated

Posted on by • Posted in Health Policy, Healthcare Reform, Hidden Fees, High Drug Prices, Optum Rx, Pharmaceutical Industry, Pharmacy Benefits Management, Profit, Profit Margin, Profit Model, Profit Motive, Shareholder Expectations, UnitedHealthcare, Wall Street • Tagged , , , , • Leave a comment
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It’s no secret the brand name prescription drug costs are high. The rising costs have been blamed by health care analysts on kickbacks within the drug supply chain demanded by the federal government, drug distributors (wholesalers), health insurance companies and pharmacy benefit managers (PBMs).

This month we got a look at just how bloated brand-name drug prices have become in the United States thanks to an analysis from the Drug Channels Institute (DCI).

How about $356 billion worth of pure glut in the prescription drug supply chain, according to the analysis by DCI. Simply put, the market price established for these drugs by manufacturers has $356 billion worth of markups that mainly accommodate the financial demands (i.e. kickbacks or rebates) of groups that profit off the prescription drug system in the United States, health insurers and their PBMs in particular.

 And that’s an all-time record.

Why?

Get ready to choke on your popcorn.

In the 1990s the federal government mandated in the Medicaid program that drug manufacturers offer a minimum rebate of 23% off the purchase price of brand name drugs. The feds also mandated that if drug manufacturers offer a better rebate on those drugs to someone else, the government also gets that same rebate.

The thought was no one gets a better deal than the federal government.

Medicaid then began to expand in the 2000s and the rebates and the demands increased.

Rebates expanded again as PBMs continued to gain more control over the drug supply chain. The PBMs now force drug manufacturers to offer significant concessions in order to get on the list of approved medications – known as a formulary – available to patients with health insurance.  

To account for these demands, drug manufacturers set the list price for their brand name drugs with these price concessions baked into the number.

DCI’s analysis found that baking is $356 billion of goodies for health care companies paid for by the government and you.

It’s the same kind of concept as a U.S. popular clothing retailer that displays inflated retail costs on the tags of goods and then right below displaying a lower “sale” price to make the consumer think they got a deal.

Here’s another way of thinking of it: Just like Congress has a lot of “pork” in its spending bills, there’s also a lot of pork in prescription drug costs that have very little to do with anything, other than increase profits for the health care industry.

Though the federal government intended to create a better system for taxpayers back in the 1990s when it demanded rebates in the Medicaid system, it instead created a feeding frenzy for companies in the drug supply chain.

In the year 2000 just a handful of companies in the drug supply chain dotted the Fortune 100 list of most financially successful companies. Today there are four such companies in the top 10.

The Minnesota-based health care conglomerate UnitedHealth leads that pack. The company’s profits have soared in the last two decades largely due to increasing medical costs and prescription drug costs paid by Americans. It has leaped over companies like Exxon Mobile and Apple to become the third largest company in America. Only Walmart and Amazon take in more revenue.

The company employs more than 400,000, including doctors and clinicians and has its own pharmacy benefits manager called Optum Rx.

We reported last month that Americans spent $464 billion last year on prescription drugs. That was also an all-time record, which will likely be set again and again and again until reforms are enacted.

DOJ Questions UnitedHealth Doctors Re: Medicare Advantage Upcoding

Posted on by • Posted in Dept of Justice (DOJ), Health Insurance Industry, Medicare Advantage, Medicare Advantage Overpayments, Physician, Physician Diagnosis, Profit, Profit Margin, Profit Model, Profit Motive, UnitedHealthcare, Upcoding • Tagged , , , , • Leave a comment
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I’ve been at this for so long and have seen so much. And it’s hard to overstate how significant the latest revelations from The Wall Street Journal are. According to its reporting, the U.S. Department of Justice’s criminal health care-fraud unit is questioning former UnitedHealth Group employees about the company’s Medicare billing practices regarding how the company records diagnoses that trigger higher payments from taxpayers.

For years, independent policy experts and *some* regulators have warned that the private Medicare Advantage program has become a breeding ground for upcoding and tax dollar waste. The tactic being scrutinized by the DOJ is called “upcoding.” Essentially, Medicare Advantage companies have an incentive to “find” new illnesses — even among patients who might not need additional treatment because the more serious the diagnoses, the bigger the government payouts to the company.

According to the Journal, prosecutors, FBI agents, and the Health and Human Services Inspector General have been asking ex-employees about special training for doctors, software that flags profitable conditions, and even bonuses for physicians who recode patient files. One former UnitedHealth doctor told the Journal that prosecutors inquired about pressure to use certain diagnosis codes and bonus pay for certain health care decisions that financially favored UnitedHealth. 

The Journal’s data shows that UnitedHealth’s members received certain lucrative diagnoses at higher rates than patients in other Medicare Advantage plans — billions of extra dollars that ultimately come from taxpayers. In one example, they reportedly pulled in about $2,700 more taxpayer dollars per patient visit when nurses went into seniors’ homes to hunt for additional conditions.

In a statement, UnitedHealth insists they “remain focused on what matters most: delivering better outcomes, more benefits, and lower costs for the people we serve.”

This latest criminal investigation joins at least two other DOJ probes into UnitedHealth’s billing and potential antitrust violations. And it’s yet another reminder that the Medicare Advantage program — which, much to many advocates alarm, now covers more than half of all Medicare enrollees – is desperately in need of real oversight.

If there’s any silver lining, it’s that courageous former employees are speaking up. They know what I know: This “profit-maximizing” through “upcoding” and “favorable selection” drains billions that could be better spent on actual patient care and pad Wall Street profits.

For a Wall Street Lifeline, UnitedHealth Is Throwing Brokers Overboard

Posted on by • Posted in Health Insurance Industry, Investor Expectations, Medical Loss Ratio (MLR), Medicare Advantage, Profit Margin, Profit Motive, UnitedHealthcare, Utilization Trends, Wall Street • Leave a comment
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In a concession to Wall Street investors, starting this summer, UnitedHealth will stop paying commissions to agents and brokers for some new enrollees in nearly 200 UnitedHealthcare Medicare Advantage plans across 39 markets.

And it’s happening not because UnitedHealth can’t afford to pay. As we’ve published previously, the company reported $9.1 billion in profits during the first quarter of 2025 — up from $7.9 billion the year before. But that wasn’t enough to satisfy Wall Street, which punished UnitedHealth with the steepest one-day stock drop in 26 years — a $110 billion free fall in market value — after the company revised its full-year profit guidance downward.

Why the drop? 

Because UnitedHealth admitted it may not squeeze quite as much profit from taxpayers this year as expected — mainly due to unexpectedly high care utilization from some of the new Medicare Advantage enrollees it brought on during the last open enrollment period. Particularly enrollees who, as then-CEO Andrew Witty described, came from other insurers exiting the market and hadn’t been properly coded. Yawn.

For Now, Brokers Are UNH’s Patsy

This recent commission cut is less about operational efficiency and more about damage control. UnitedHealth is signaling to investors that it’s willing to shrink its Medicare Advantage footprint — at least temporarily — if that helps preserve profit margins. And Wall Street analysts are eating it up, seeing it as a way to slow the flow of high-cost members and stabilize earnings, according to BarChart.

Off Wall Street, the move has already come under fire. As the National Association of Benefits and Insurance Professionals put it, UnitedHealth is “cutting off the very people best equipped to help” seniors — especially low-income and rural enrollees who depend on brokers to explain their options.

While we would warn seniors against enrolling in a Medicare Advantage plan in the first place – without brokers, many beneficiaries will be left to fend for themselves in a system that’s already infamously confusing, expensive and deadly.

A Strategic Retreat Disguised as a Cost-Containment Strategy

The problem is the perverse incentive structure UnitedHealth and other insurers helped build — one that rewards risk-coding gamesmanship more than it rewards delivering care. For years, the company thrived by maximizing revenue through “coding intensity” and by acquiring everything from doctors’ offices to behavioral health firms to control more of the health care ecosystem.

Now, UnitedHealth is responding the way Wall Street expects: by slashing anything that isn’t bolted down – including brokers.

So here we are: 

UnitedHealth is still wildly profitable, still drawing billions from taxpayer-funded programs like Medicare and Medicaid — and now it’s cutting out the professionals who presumably help seniors navigate a convoluted health care system. All this, mind you, to appease jittery investors. And despite UnitedHealth’s current wobbly share price, analysts expect it to rebound, especially with a continuation of share buybacks on the horizon.

During the first quarter of this year alone, the company bought back $3 billion worth of its own shares. Over the past year, buybacks totaled more than $12 billion. When you factor in dividends, the company said it “returned” more than $16 billion to shareholders in 2024. That’s how you keep investors at least partially satisfied.

UnitedHealth’s Reckoning: Wall Street Isn’t Buying the Blame Game

Posted on by • Posted in Medical Loss Ratio (MLR), Medicare Advantage, Medicare Advantage Overpayments, Net Income, Operating Income, Operating Margin, Operating Margin Drivers, Optum, Optum Health, Optum Rx, OptumRx, Pharmacy Benefits Management, UnitedHealth Group, UnitedHealthcare, Wall Street • Leave a comment
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UnitedHealth executives made a valiant attempt yesterday to persuade investors that they have figured out how to improve customer service and keep Congress and the incoming Trump administration from passing laws that could shrink the company’s profit margins – and maybe even the company itself – but Wall Street wasn’t buying.

During their first call with investors since the murder of UnitedHealthcare CEO Brian Thompson, the company’s top brass pointed the finger of blame for rising health care costs everywhere but at themselves – primarily at hospitals and pharmaceutical companies – and made statements that simply were not true. Investors clearly did not find their comments reassuring or credible. By the end of the day shares of UnitedHealth’s stock were down more than 6% to $510.59. That marked a continuation of a slide that began after the stock price peaked at $630.73 on November 11 – a decline of almost 20%. 

In a little more than two months, the company has lost an astonishing $110 billion in market capitalization, and shareholders have lost an enormous amount of the money they invested in UnitedHealth. 

Earlier yesterday morning, the company released fourth-quarter and full-year 2024 earnings, which were slightly higher on a per share basis than Wall Street financial analysts had expected: $6.81 per share in the fourth quarter compared to analysts’ consensus estimate of $6.73 for the quarter. But the company posted lower revenue during the last three months of 2024 than analysts had expected. While revenue was up 7% over the same quarter in 2023, to $100.8 billion, analysts had expected revenue to grow to $101.6 billion.

And on a full-year basis, the company’s net profits fell an eye-popping 36%, from $22.4 billion in 2023 to $14.4 billion last year.

Bottom line: the company, which until last year had grown rapidly, actually shrank in some respects, especially in the division that operates the company’s health plans. UnitedHealthcare, which Thompson led, saw its revenue increase slightly but its profits fall. The other big division, Optum, which among other things owns and operates numerous physician practices and clinics and one of the country’s largest pharmacy benefit managers (PBMs), fared much better.

While Optum’s 2024 revenue was lower than UnitedHealthcare’s ($253 billion and $298 respectively), it made far more in profits on an operating basis ($16.7 billion and $15.6 respectively).

Optum’s operating profit margin was 6.6% while UnitedHealthcare’s was 5.2%.

The company’s executives blamed higher health care utilization, especially by people enrolled in its Medicare Advantage plans, for the decline in profits.

Witty and CFO John Rex pointed the finger of blame at hospitals and drug companies for rising medical prices. And they obscured the huge amounts of money the company’s PBM, Optum Rx, extracts from the pharmacy supply chain. While the company chose not to break out exactly how much of Optum’s revenues of $298 billion came from Optum Rx, it appears that more than half of it was contributed by the PBM. The company did note that Optum Rx revenues increased 15% during 2024.

Nevertheless, Witty and Rex blamed drug makers for high prices.

They also said that they would be changing the PBM’s business practices to pass through rebate discounts from drug makers to its customers, claiming that it already passes through 98% of them and will reach 100% by 2028. That clearly was a talking point aimed at Washington, where there is significant bipartisan support for legislation that would require all PBMs to do so. Despite UnitedHealth’s claim, there is no external verification to back up that they are passing 98% of rebates back to customers.

Another claim the executives made that is not true is that the Medicare Advantage program saves taxpayers money. Numerous government reports have shown the opposite, that the federal government spends considerably more on people enrolled in Medicare Advantage plans than those enrolled in the traditional Medicare program.

Reports have estimated that UnitedHealthcare, which is the largest Medicare Advantage company, and other MA plans are overpaid between $80 billion and $140 billion a year.

There is also growing bipartisan support to reform the Medicare Advantage program to reduce both the overpayments and the excessive denials of care at UnitedHealthcare and other MA insurers.

While company executives might be hoping that their fortunes will improve during the second Trump administration, Trump recently joined some Republican members of Congress, like Rep. Buddy Carter of Georgia, who are calling for significant reforms, especially to pharmacy benefit managers. 

At a news conference last month, Trump promised to “knock out” those middlemen in the pharmacy supply chain.  

“We are paying far too much, because we are paying far more than other countries,” he said. “We have laws that make it impossible to reduce [drug costs] and we have a thing called a ‘middleman’ … that makes more money than the drug companies, and they don’t do anything except they’re middlemen. We are going to knock out the middleman.”

How UnitedHealth’s Diagnosis Game Rakes in Billions from Medicare

Posted on by • Posted in Health Insurance Industry, Health Policy, Healthcare Reform, Incentive, Incentive Pay, Medicare Advantage, Profit, Profit Margin, Profit Motive, UnitedHealth Group, UnitedHealthcare • Leave a comment
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An investigative piece in the Wall Street Journal, written by Mark Maremont, Danny Dougherty, and Anna Wilde Mathews, gives an eye-popping look at how UnitedHealth Group is turning diagnosis-driven billing into a high-stakes game in the conglomerate’s Medicare Advantage business. 

As The Journal reported, UnitedHealth has taken a unique approach to Medicare Advantage:

directly employing thousands of doctors and arming them with software that generates diagnosis checklists before they even see patients. Former UnitedHealth physicians described how these suggested diagnoses — often obscure or irrelevant — weren’t optional. To move on to their next patient, doctors were forced to confirm, deny, or defer each proposed diagnosis.

One Oregon physician, Dr. Nicholas Jones, said UnitedHealth frequently pushed conditions so rare – like secondary hyperaldosteronism – he had to Google them. And this wasn’t limited to minor conditions.

Sickness scores for UnitedHealth’s Medicare Advantage patients jumped an average of 55% in their first year of enrollment in one of the company’s health plans compared to a mere 7% rise for patients who stayed in traditional Medicare. As the Journal noted, that’s the kind of jump you’d expect if everyone suddenly developed HIV and breast cancer.

The implications? More diagnoses mean higher “sickness scores,” which translate to billions in extra payments from Medicare. The Journal found that UnitedHealth’s practices generated an additional $4.6 billion from 2019 to 2022 compared to what it would have received if those scores had matched industry averages.

Citing fewer hospitalizations, UnitedHealth insists these practices improve patient outcomes and disease management, but the incentives to inflate diagnoses raise serious questions.

In the piece, you’ll meet Chris Henretta, a UnitedHealth Medicare Advantage “member” who lives in Florida. His doctor diagnosed him as morbidly obese, even though he’s a lifelong weightlifter and doesn’t meet the BMI threshold. “I began to suspect my doctor may have a financial incentive to portray people as higher risk,” Henretta said. The article pointed out that such a diagnosis can trigger an extra $2,400 in Medicare payments annually.

UnitedHealth’s system isn’t just about inflating diagnoses — it’s about turning them into profit centers.

The Journal reported that internal documents revealed that doctors could earn bonuses of up to $30,000 annually for engaging with the diagnosis system. Nurses tasked with “finding” new diagnoses were paid $250 per patient visit.

UnitedHealth has countered by saying these practices reflect its commitment to diagnosing and treating diseases early. But the Journal said many doctors felt pressure to play along.

Dr. Emilie Scott, a former UnitedHealth physician, called the system a money machine: “It’s not about taking care of the patient. It’s about how you get the money to flow.”

For patients and taxpayers, this system poses tough questions. Traditional Medicare patients treated by UnitedHealth doctors didn’t see the same inflation in sickness scores, which underscores how Medicare Advantage’s payment system incentivizes diagnose gaming.

What’s clear is that Medicare Advantage — and UnitedHealth’s dominant role in it — needs much closer scrutiny.

As The Journal reporters wrote, the Centers for Medicare and Medicaid Services is studying these relationships. But real change will require policymakers and the public to confront the deeper flaws in how Medicare Advantage is structured.

Be sure to dive into the original Wall Street Journal article for the full story. The fantastic graphs and photography alone are worth your time, and the detailed reporting provides invaluable insights into how one company’s profit strategies impact us all.

The spotlight is on health insurance companies. Patients are telling their stories of denied claims, bankruptcy and delayed care.

Posted on by • Posted in Bankruptcy, Delayed Care, Denial, Denial Management, Health Insurance Denial, Health Insurance Industry, Health Policy, Healthcare Reform, Medical Debt, Out of Pocket Expenses, Out-of-Network, Profit, Profit Motive, Underinsured, UnitedHealth Group, UnitedHealthcare • Leave a comment

https://www.yahoo.com/lifestyle/spotlight-health-insurance-companies-patients-014648180.html

After UnitedHealthcare CEO Brian Thompson, left, was killed and Anthem released a controversial anesthesia policy, people shared their stories of insurance woes. (UnitedHealth Group via AP, Getty)

After UnitedHealthcare CEO Brian Thompson, left, was killed and Anthem released a controversial anesthesia policy, people shared their stories of insurance woes. (UnitedHealth Group via AP, Getty)

On Wednesday, Brian Thompson, the chief executive of UnitedHealthcare, was fatally shot in midtown Manhattan in what police are calling a “pre-meditated, preplanned, targeted attack.” Days before, Anthem Blue Cross Blue Shield said in a note to providers that it would limit anesthesia coverage in some states if a surgery or procedure exceeded a set time limit (the policy, set to go into effect in February, was swiftly reversed following an uproar).

The U.S. health care insurance system relies on private insurance, which covers 200 million Americans, and government-run programs.

Americans receive coverage through their employers, government programs like Medicaid or Medicare or by purchasing it themselves — often at a high cost. Even when an individual is covered by insurance, medical coverage can be expensive, with co-pays, deductibles and premiums adding up. Going to an out-of-network provider for care (which can be done unintentionally, for example if you are taken by ambulance to a hospital) can lead to exorbitant bills.

And then there’s the fact that, according to data from state and federal regulators, insurers reject about one in seven claims for treatment.

And most people don’t push back — a study found that only 0.1% of denied claims under the Affordable Care Act, a law designed to make health insurance more affordable and prevent coverage denials for pre-existing conditions, are formally appealed. This leaves many people paying out of pocket for care they thought was covered — or skipping treatment altogether.

For many, the cost of life-saving care is too high, and medical debt is the No. 1 cause of bankruptcy in America.

That is to say nothing of the emotional labor of navigating the complex system. With Thompson’s killing and the Anthem policy, there’s been widespread response with a similar through line: a pervasive contempt for the state of health insurance in the United States. The most illustrative reactions, though are the personal ones, the tales of denied claims, battles with insurance agents, delayed care, filing for bankruptcy and more.

‘We sat in the hospital for three days’

Jessica Alfano, a content creator who goes by @monetizationmom, shared her story on TikTok about battling an insurance company while her one-year-old child was in the hospital with a brain tumor. When her daughter needed to have emergency surgery at a different hospital was outside their home state, UnitedHealthcare allegedly refused to approve the transfer via ambulance to New York City. She also couldn’t drive her daughter to the hospital as the insurance company told them they would not cover her at the next hospital if they left the hospital by their own will and did not arrive by ambulance. “I vividly remember being on the phone with UnitedHealthcare for days and days — nine months pregnant about to give birth alone — while my other baby was sitting in a hospital room,” she said.

https://www.tiktok.com/embed/v2/7444723783765740830?lang=en-US&referrer=https%3A%2F%2Fwww.yahoo.com%2Flifestyle%2Fspotlight-health-insurance-companies-patients-014648180.html&embedFrom=oembed

‘Excruciating pain’

While pregnant, Allie, who posts on TikTok as @theseaowl44, went to the hospital in “excruciating pain,” she said in a video. After initially being sent home by a doctor who said she was having pain from a urinary tract infection and the baby sitting on her bladder, she returned to the hospital to learn she was suffering from appendicitis. She was sent to a bigger hospital in St. Louis, where she had emergency surgery. Her son survived the surgery but died the next day after she delivered him.

https://3489f1614246e47166ad8768064e31d6.safeframe.googlesyndication.com/safeframe/1-0-40/html/container.html

About 45 minutes later, Allie suffered a pulmonary embolism and had to have an emergency dilation and curettage (D&C) to remove the placenta, nearly dying in the process. It was after all of this that she learned she had been sent to a hospital that was out of network. “We ended up with a bill from the hospital that was more than what we paid for the home that we live in, and it was going to take probably, I don’t know, 20 to 30 years to pay off this hospital bill,” Allie said. “We opted to have to file bankruptcy, but not before I exhausted every appeal with [insurance company] Cigna — I wrote letters, I spilled my heart out, I talked on the phone, I explained our situation and our story, thinking surely someone would understand this was not my fault.

On the third and final appeal, because they only allow you three, Cigna’s appeal physician told me, point blank, it was my fault that when I was dying from a ruptured appendix in the ER, that I didn’t check and make sure that the hospital I was being sent to by ambulance was in my insurance network.”

https://www.tiktok.com/embed/v2/7445019152714173726?lang=en-US&referrer=https%3A%2F%2Fwww.yahoo.com%2Flifestyle%2Fspotlight-health-insurance-companies-patients-014648180.html&embedFrom=oembed

Hundreds of similar stories are being told, but the comments section on these videos paints a picture in itself. “I wear leg braces and walk with crutches as a paraplegic and they tried to deny my new leg braces and only approve me a wheelchair. They wanted to take my ability to WALK away,” commented TikToker @ChickWithSticks.

“Perfectly healthy pregnancy, until it wasn’t,” TikToker Meagan Pitts shared. “NICU stay was covered by my insurance, the neonatologist group contracted by the NICU: Denied. I’m sorry, what?”

Another wrote that her son was born with a congenital heart defect and needed open heart surgery. “My husband changed jobs & we switched to UHC,” she wrote. “They DENIED my son’s cath lab intervention!”

‘The most stressful time of my life’

One Redditor, @Sweet_Nature_7015, wrote that they struggled with UnitedHealthcare when they and their husband were in a “terrible car accident” that was the other driver’s fault. Since United Healthcare only covered two days in the hospital, the Redditor wrote that the case manager tried to find a way to “kick him out of the hospital” — but since their husband was in a coma, he was unable to be discharged safely. “The stress of being told — your health insurance isn’t covering this anymore, we have to discharge your husband — while he’s in a freaking coma and on a ventilator, etc, rediculous [sic],” they wrote. “I have to sign some papers to give up all of my husband’s benefits via his job – which included his life insurance that he had paid into, so we lost that. This allowed him to be covered by Medicaid. I can’t even put into words how much stress UHC caused on top of my husband (and my) health issues in the most stressful time of my life.”

The kicker, they wrote, was that years later the couple was awarded a court settlement from the other driver in the accident — and “UHC rolled up to the court and took the entire settlement money as their payment for those two days in the hospital they had paid for.”

‘I’m one of the lucky ones’

On the same thread, Redditor @sebastorio wrote that they went to the emergency room for an eye injury, which their doctor said could have resulted in a loss of sight. “UHC denied my claim, and I paid $1,400 out of pocket,” they said. “I’m one of the lucky ones. Can’t imagine how people would feel if that happened for critical or life-saving care.”

‘Constant stream of hostile collection calls’

Redditor @colonelcatsup opened up about their experience with insurance while having a baby, writing that they went into premature labor while insured under one company but that at midnight, their insurance switched to United Healthcare. “I gave birth in the morning. My daughter was two months early and was in the NICU for weeks so the bill was over $80,000 and United refused to pay it, saying it wasn’t their responsibility,” they wrote. “In addition to dealing with a premature baby, I had a constant stream of hostile collection calls and mail from the hospital for 18 months. My credit took a hit.”

Eventually, their employer hired an attorney to fight UHC, and the insurance company eventually paid. “I will never forgive them for the added stress hanging over me for the first year and a half of my child’s life,” they wrote.

‘Debt or death’

On Substack, on which she posted an excerpt from her Instagram, author Bess Kalb also recounted her experience with health insurance coverage when she was bleeding during her pregnancy and was asked by an EMT what insurance she had before deciding whether they would go to the nearest hospital. When her husband said to take Kalb to the hospital, despite not knowing the insurance implications, their bill was more than $10,000.https://www.instagram.com/p/DDNphXCp3Qu/embed/captioned/?cr=1&v=12

“The private insurance industry forces millions of Americans to choose between debt or death,” Kalb wrote. “Often, ghoulishly, the outcome is both. If I were worried about an ambulance out of coverage, I would have waited at home or waited in traffic for an hour to cross Los Angeles to get to my doctor’s office and sat in the waiting room bleeding out and perhaps would not be here to write this, and neither would my son.”

UnitedHealth Group Has Made $24.5 Billion in Profits This Year (So Far) But Still Takes Beating on Wall Street

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UnitedHealth Group has taken a beating on Wall Street this week after admitting that its Medicare Advantage plans had to pay out more in medical claims in the third quarter of this year than investors had expected. As I’ve noted many times, Wall Street can’t stand it and gets very spiteful when Big Insurance uses more of our premium dollars paying for patients’ care because that means there’s less money left over to enrich shareholders. 

At the end of trading at the New York Stock Exchange Tuesday, UnitedHealth’s share price was down 8.11% — almost $50 a share — falling like a rock from $605.40 to $556.29 as soon as the market opened. It had reached a 52-week high just the day before but fell off a cliff Tuesday morning. This despite the fact that the company still made $8.7 billion in operating profits during the third quarter.

What investors didn’t like at all was the fact that UnitedHealthcare’s medical loss ratio (MLR) climbed to 85.2% from 82.3% for the same period last year.

By other measures, the company did just fine, especially when you look at how much money it made during the first nine months of this year: a whopping $24.5 billion in profits.

Enrollment in both the company’s commercial and Medicare Advantage plans increased, but it posted a significant decline in the number of people enrolled in the Medicaid plans its administers for several states. That’s because of the Medicaid “unwinding” that has been going on since the official end of the pandemic.  

And here is another couple of numbers of note from the third quarter:

UnitedHealth’s Optum division, which encompasses its massive pharmacy benefit manager, Optum Rx, made more money for the parent company than the health plan division: $4.5 billion in profits vs. $4.2 billion for UnitedHealthcare.

PBMs have become even more of a cash cow for Big Insurance than Medicare Advantage, which despite the higher MLRs of late is still a reliable money-gushing ATM for the industry. 

Private Medicare Plans and Vertical Integration Yield UnitedHealth $15.8 Billion in Profits Between January and June

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UnitedHealth Group, the largest health insurance conglomerate by far, continues to show how rewarding it is for shareholders when corporate lawyers find loopholes in well-intentioned legislation – and game the Medicare Advantage program in ways most lawmakers and regulators didn’t anticipate and certainly didn’t intend – to boost profits.

UnitedHealth announced this morning that it made $15.8 billion in operating profits between the first of January and the end of June this year. That compares to $4.6 billion it made during the same period in 2014. One way the company is able to reward its shareholders so richly these days is by steering millions of people enrolled in its health plans to the tens of thousands of doctors it now employs and to the clinics and pharmacy operations it now owns.

This is the result of the hundreds of acquisitions UnitedHealth has made over the past 10 years in health care delivery as part of its aggressive “vertical integration” strategy. 

The other big way the company has become so profitable is by rigging the Medicare Advantage program in a way that enables it to get more money from the federal government in a scheme – detailed in a big investigative report by the Wall Street Journal a few days ago – in which it claims its Medicare Advantage enrollees are sicker than they really are. The WSJ calculated that Medicare Advantage insurers bilked the government out of more than $50 billion in the three years ending in 2021 by engaging in this scheme, and it said UnitedHealth has grabbed the lion’s share of those billions. In many if not most instances, those enrollees were not treated for the conditions and illnesses UnitedHealth and other insurers claimed they had. As the newspaper reported:

Insurer-driven diagnoses by UnitedHealth for diseases that no doctor treated generated $8.7 billion in 2021 payments to the company, the Journal’s analysis showed. UnitedHealth’s net income that year was about $17 billion.

By far, most of UnitedHealth’s health plan enrollment growth over the past 10 years has come from the Medicare Advantage program, and it now takes in nearly twice as much revenue from the 7.8 million people enrolled in that program as it does from the 29.6 million enrolled in its commercial insurance plans in the United States.

Since the second quarter of 2014, UnitedHealth’s commercial health plan enrollment has increased by 720,000 people.  During that same time, enrollment in its Medicare Advantage plans has increased by 4.8 million. 

UnitedHealth and other insurers that participate in the Medicare Advantage program know a cash cow when they see one.

As the Kaiser Family Foundation noted in a recent report, the highest gross margins among insurers come from Medicare Advantage, which, as Health Finance News reported, boasted gross margins per enrollee of $1,982 on average by the end of 2023, compared to $1,048 in the individual (commercial) market and $753 in the Medicaid managed care market.

UnitedHealth has significant enrollment in all of those areas. Enrollment in the Medicaid plans it administers in several states increased from 4.7 million at the end of the second quarter of 2014 to 7.4 million this past quarter. 

In its disclosure today, UnitedHealth did not break out its health plan revenue as it has in past quarters, but you can see how public programs like Medicare Advantage and Medicaid have become so lucrative by comparing revenue reported by the company at the end of the second quarter of 2013 to the second quarter of 2023. Over that time, total revenues for commercial plans (employer and individual) increased by slightly more than $5.6 billion, from $11.1 billion in 2Q 2013 to $16.8 billion in 2Q 2023. Total revenues from Medicaid increased by $14.2 billion, from $4.5 billion to $18.7 billion, and total revenues from Medicare increased by $21.4 billion, from $11.1 billion to $32.4 billion. 

Here’s another way of looking at this: At the end of 2Q 2013, UnitedHealth took in almost exactly the same revenue from its commercial business and its Medicare business ($11.053 from Medicare and $11.134 from its commercial plans.

At the end of 2Q 2023, the company took in nearly twice as much from its Medicare business ($32.4 billion from Medicare compared to $16.8 billion from its commercial plans.)

The change is even more stark when you add in Medicaid. At the end 2Q 2023, UnitedHealth’s Medicare and Medicaid (community and state) revenues totaled $51.1 billion; It’s commercial revenues, as noted, totaled $16.8 billion). It’s now getting three times as much revenue from taxpayer-supported programs as from its commercial business.

As impressive for shareholders as all of that is, growth in the company’s other big division, Optum, which encompasses its pharmacy benefit manager (Optum Rx) and the physician practices and clinics it owns) has been even more eye-popping. At the end of 2Q 2014, Optum contributed $11.7 billion to the company’s total revenues. At the end of 2Q 2024, it contributed $62.9 billion, an increase of $51.2 billion. At that rate of growth, it’s only a matter of a few quarters before Optum is both the biggest and most profitable division of the company. 

And here’s the way the company benefits from that loophole in federal law I mentioned above. The Affordable Care Act requires insurers to spend 80%-85% of health plan revenue on patient care. UnitedHealth is consistently able to meet that threshold by paying itself, as HEALTH CARE un-covered explained in December. The billions UnitedHealthcare (the health plan division) pays Optum every quarter are categorized as “eliminations” in its quarterly reports. In 2Q 2024, 27.7% of the company’s revenues fell into that category.

The more it is able to steer its health plan enrollees into businesses it owns on the Optum side, the more it can defy Congressional intent – and profit greatly by it. 

Wall Street loves how UnitedHealth has pulled all this off. It’s stock price jumped $33.50 to $548.87 a share during today’s trading at the New York Stock Exchange, an increase of 6.5% – in one day. 

Wall Street Yawned as Congress Grilled UnitedHealth’s CEO but Went Ballistic on CVS/Aetna Over Medicare Advantage Claims

Posted on by • Posted in Citizens United vs Federal Election Commission, CVS Health, Federal Trade Commission (FTC), Health Insurance Industry, Lobbyist, Market Consolidation, Market Power, Market Share, Medicare Advantage, Monopoly Behavior, Pharmaceutical Industry, Pharmacy Benefits Management, UnitedHealth Group, UnitedHealthcare, Vertical Consolidation, Vertical Integration • Leave a comment
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After UnitedHealth Group CEO Andrew Witty’s appearances at two congressional committee hearings last week, I had planned to write a story about what the lawmakers had to say. One idea I considered was to publish a compilation of some of the best zingers, and there were plenty, from Democrats and Republicans alike. 

I reconsidered that idea because I know from the nearly half-century I have spent on or around Capitol Hill in one capacity or another that those zingers were carefully crafted by staffers who know how to write talking points to make them irresistible to the media. As a young Washington correspondent in the mid-to-late’70s, I included countless talking points in the stories I wrote for Scripps-Howard newspapers. After that, I wrote talking points for a gubernatorial candidate in Tennessee. I would go from there to write scads of them for CEOs and lobbyists to use with politicians and reporters during my 20 years in the health insurance business. 

I know the game. And I know that despite all the arrows 40 members of Congress on both sides of the Hill shot at Witty last Wednesday, little if anything that could significantly change how UnitedHealth and the other big insurers do business will be enacted this year. 

Some reforms that would force their pharmacy benefit managers to be more “transparent” and that would ban some of the many fees they charge might wind up in a funding bill in the coming months, but you can be sure Big Insurance will spend millions of your premium dollars to keep anything from passing that might shrink profit margins even slightly.

Money in politics is the elephant in any Congressional hearing room or executive branch office you might find yourself in (and it’s why I coauthored Nation on the Take with Nick Penniman).

You will hear plenty of sound and fury in those rooms but don’t hold your breath waiting for relief from ever-increasing premiums and out-of-pocket requirements and the many other barriers Big Insurance has erected to keep you from getting the care you need.

It is those same barriers doctors and nurses cite when they acknowledge the “moral injury” they incur trying to care for their patients under the tightening constraints imposed on them by profit-obsessed insurers, investors and giant hospital-based systems. 

Funny not funny

Cartoonist Stephan Pastis captured the consequences of the corporate takeover of our government, accelerated by the Supreme Court’s 2010 landmark Citizens United vs. Federal Election Commission ruling, in his Pearls Before Swine cartoon strip Sunday. 

Rat: Where are you going, Pig?

Pig: To a politician’s rally. I’m taking my magic translation box.

Rat: He doesn’t speak English?

Pig: He speaks politicianish. This translates it into the truth. Come see.

Politician: In conclusion, if you send me to Washington, I’ll clean up this corrupt system and fight for you everyday hard-working Americans. God bless you. God bless the troops. And God bless America.

Magic translation box: I am given millions of dollars by the rich and the powerful to keep this rigged system exactly as it is. Until you change that, none of this will ever change and we’ll keep hoping you’re too distracted to notice. 

Politician’s campaign goon: We’re gonna need a word with you.

Magic translation box: This is too much truth for one comic strip. Prepare to be disappeared.

Rat: I don’t know him.   

Back to Sir Witty’s time on the hot seat. It attracted a fair amount of media coverage, chock full of politicians’ talking points, including in The New York Times and The Washington Post. (You can read this short Reuters story for free.) Witty, of course, came equipped with his own talking points, and he followed his PR and legal teams’ counsel: to be contrite at every opportunity; to extol the supposed benefits of bigness in health care (UnitedHealth being by far the world’s largest health care corporation) all the while stressing that his company is not really all that big because it doesn’t, you know, own hospitals and pharmaceutical companies [yet]; and to assure us all that the fixes to its hacked claims-handling subsidiary Change Healthcare are all but in.

Congress? Meh. Paying for care? WTF!

Wall Street was relieved and impressed that Witty acquitted himself so well. Investors shrugged off the many barbs aimed at him and his vast international empire. By the end of the day Wednesday, the company’s stock price had actually inched up a few cents, to $484.11. A modest 2.7 million shares of UnitedHealth’s stock were traded that day, considerably fewer than usual. 

Instead of punishing UnitedHealth, investors inflicted massive pain on its chief rival, CVS, which owns Aetna. On the same day Witty went to Washington, CVS had to disclose that it missed Wall Street financial analyst’s earnings-per-share expectations for the first quarter of 2024 by several cents. Shareholders’ furor sent CVS’ stock price tumbling from $67.71 to a 15-year low of $54 at one point Wednesday before settling at $56.31 by the time the New York Stock Exchange closed. An astonishing 65.7 million shares of CVS stock were traded that day. 

The company’s sin: paying too many claims for seniors and disabled people enrolled in its Medicare Advantage plans. CVS’s stock price continued to slide throughout the week, ending at $55.90 on Friday afternoon. UnitedHealth’s stock price kept going up, closing at $492.45 on Friday. CVS gained a bit on Monday, closing at $55.97. UnitedHealth was up to $494.38.

Postscript: I do want to bring to your attention one exchange between Witty and Rep. Buddy Carter (R-Ga.) during the House Energy and Commerce committee hearing. Carter is a pharmacist who has seen firsthand how UnitedHealth’s virtual integration–operating health insurance companies with one hand and racking up physician practices and clinics with the other–and its PBM’s business practices have contributed to the closure of hundreds of independent pharmacies in recent years. He’s also seen patients walk away from the pharmacy counter without their medications because of PBMs’ out-of-pocket demands (often hundreds and thousands of dollars). And he’s seen other patients face life-threatenng delays because of industry prior authorization requirements. Carter was instrumental in persuading the Federal Trade Commission to investigate PBMs’ ownership and business practices. He told Witty: 

I’m going to continue to bust this up…This vertical integration in health care in general has got to end.

More power to you, Mr. Carter.