In second episode of the HEALTH CARE un-covered Show, we walk you through the most recent earnings reports of seven of the largest for-profit health insurance corporations in the country.
Every three months, the nation’s largest health insurers release earnings statements filled with crammed financial tables, investor language and Wall Street jargon. Most people never see them. Even fewer try to understand what they really reveal about how the U.S. health care system works.
In second episode of the HEALTH CARE un-covered Show, we do something no one else does: walk you through the most recent earnings reports of seven of the largest for-profit health insurance corporations in the country — UnitedHealth Group, CVS Health (Aetna), Cigna, Elevance, Humana, Centene and Molina. As you’ll see, the results paint a striking picture of how powerful and profitable Big Insurance has become.
Together, those companies collected nearly $1.7 trillion in revenue in 2025, about $175 billion more than the year before and generated more than $54 billion in profits. Yet despite the record financial performance, the companies covered roughly 10 million fewer people than they did in 2024 – and ever-increasing chunks of their revenues are now coming from Americans’ tax dollars.
We show evidence of a trend reshaping the health care economy: self-dealing through insurers’ vertical integration and their huge government contracts, which accounts for much of the industry’s growth. For example, UnitedHealthcare now gets more than 77% of its revenue from government programs such as Medicare Advantage and Medicaid. As a reminder, Medicare Advantage is not traditional Medicare but a very profitable privatized version of the program that’s funded by taxpayers and that last year overpaid insurers by $84 billion.
We also examine stock buybacks. Between 2015 and 2025,these seven companies spent more than $137 billion buying back their own shares, a move that boosts earnings per share and enriches shareholders and top executives. That’s $137 billion that could have been used to reduce premiums and out-of-pocket expenses but went into the pockets of investors instead.
To put the numbers in perspective, we compare these insurers with some of America’s most recognizable corporations — from Chevron and PepsiCo to Bank of America and Salesforce. Most of the big seven generate more revenue than these household names. And many of the insurance conglomerates are growing faster than companies like Target, Uber, Disney and Starbucks.
We take viewers inside Wendell’s office to make sense of Big Insurance’s dense 2025 earnings reports.
You won’t find an analysis quite like this anywhere else.
This episode has been re-uploaded with corrected numbers. For instance, Disney was listed as having revenues of $274.9B in 2025. The correct number is $94.4B. The percent change used in the original video (+80%) was correct.
In Episode 1 of the HEALTH CARE un-covered Show, we examine what may be an inflection point in the health insurance reform debate. Plus, we’re joined by pollster Madeline Conway of Impact Research.
The volume of claims is treated as proof of misconduct, despite the fact that the statute imposes no limit on IDR submissions and explicitly allows for repeated use when payment disputes continue. Further, insurers base this claim on estimates of IDR submissions that were deeply flawed, forecasting nationwide utilization on the experience of one state.
The message is unmistakable: providers are not accused of breaking the NSA, but rather of utilizing it too effectively. For instance, insurers claim that providers submitted “thousands” of IDR disputes, including nearly “200 overlapping proceedings for the same services” across both the federal and state IDR systems, and batched an average of 66 separate items or services into a single IDR filing: Insurers describe these statistics as “overwhelming,” despite the fact that each dispute is linked to a corresponding payment denial or gross underpayment.
Recasting Physician Disputes as “Fraud”
Each lawsuit hones in on physician NSA disputes and castigates them as some kind of “fraud” or “abuse.” The HaloMD lawsuits are a prime example of the insurer taking an NSA dispute, challenging the disputes eligibility for arbitration and then recasting it as “fraud.” What these lawsuits notably fail to recognize is that the outcomes of IDR are determined by independent arbitrators, called certified IDR entities (IDREs), not by the providers themselves.
According to CMS’s public-use files, 82% of 2024 disputes and 80% of 2025 disputes were found eligible for arbitration. This is orders of magnitude greater than what the government had estimated. What these numbers tell us is that the problem with the volume of disputes is not a conspiracy by doctors to abuse this system, but systemic underpayment by insurers, as we have reported.
In the lawsuits, insurers concede that it was the arbitrators, not the providers, who rendered the final awards in these disputes. Insurers also consistently and publicly voice their concerns that NSA awards surpass the Qualifying Payment Amount (QPA), often describing results that are ‘multiples’ of the median in-network rates or even exceeding billed charges. Insurers assert that IDR awards are excessive, “citing CMS data showing that they are on average slightly over 300% of the QPA” of the QPA.
However, a recent analysis shows that the reported QPAs consistently underestimate the actual median in-network rates, with an average discrepancy of 290% in cases where such discrepancies are present. A pervasive problem reported by providers and evident in the public-use files shows thousands of initial offers for payment that amount to less than a dollar. In one documented case involving high-acuity emergency care, the insurer calculated the QPA at $0.01. The arbitrator ultimately awarded $1,196. The gap was not evidence of an inflated charge; it was evidence that the benchmark itself was flawed.
This underestimation is attributed to calculations controlled by insurers, insufficient oversight, and the omission of market factors that Congress mandated arbitrators to consider.
Simply disagreeing with an IDRE’s assessment does not equate to fraud. Rather than modifying payment practices, enhancing negotiations, or pursuing legislative clarity, insurers have opted for litigation as a tool to crush providers while claiming unfavorable arbitration results as evidence that the system is being “manipulated.” They are both arsonists and firefighters.
The Litigation Boa Constrictor
Across jurisdictions, insurers clearly claim that defendants engaged in “coordinated enterprises,” “strategic partnerships,” or “associations-in-fact,” alleging RICO violations founded on the concurrent use of IDR, common billing vendors, and simultaneous filings, even though there is no statutory restriction against coordinated IDR usage or shared administrative frameworks.
The recurring themes in these filings are hard to overlook. In the last 12 months, there have been 11 lawsuits targeting use of the No Surprises Act, four alleging RICO violations and five seeking treble damages.
So far, this coordinated lawfare effort includes the following suits:
Blue Cross Blue Shield of Texas v. HaloMD et al. (E.D. Tex., Aug. 2025)
Blue Cross Blue Shield of Texas v. Zotec Partners, LLC (E.D. Tex., Dec. 2025)
Anthem Health Plans of Virginia v. AGS Health / SCP Health et al. (W.D. Va., Nov. 2025)
Community Insurance Co. (Anthem Ohio) v. HaloMD et al. (S.D. Ohio, June 2025)
Blue Cross Blue Shield Healthcare Plan of Georgia v. HaloMD et al. (N.D. Ga., May 2025)
Anthem Blue Cross (CA) v. HaloMD et al. (C.D. Cal., July 2025)
Anthem Blue Cross (CA) v. Prime Healthcare entities (C.D. Cal., Jan. 2026)
UnitedHealthcare of Pennsylvania, Inc. v. NorthStar Anesthesia of Pennsylvania, LLC (E.D. Pa., Dec. 2025)
UnitedHealthcare Insurance Co. v. Maui Emergency Care Physicians, LLC (D. Haw., Jan. 2026)
United Healthcare Services, Inc. v. Concord Company of Tennessee, PLLC (W.D. Ky., Jan. 2026)
UnitedHealthcare Ins. Co. v. Radiology Partners, LLC (D. Ariz, Aug. 2025)
These prosecutions follow a distinct pattern of allegations: strategic batching, simultaneous filings, excessive offers, false statements, and an alleged conspiracy to take advantage of IDR. Even when the factual circumstances vary, the narrative remains the same. This consistency indicates not an independent discovery of wrongdoing, but a calculated strategy.
The targets of these lawsuits represent the full spectrum of organizations utilizing the NSA. From revenue cycle management (HaloMD) to large physician staffing organization (SCP) to small physician practice management group (Concord Company), insurers are constricting the entire provider community hoping to alter the NSA through legal outcomes.
Litigation as Press Release
The litigation involving Prime Healthcare highlights this strategy particularly well. In this case, insurers openly admit that hospitals are utilizing IDR instead of balance billing patients, precisely what Congress intended, yet they still label this behavior as abusive because it led to payments that were higher than what insurers were prepared to offer. Lawful reliance on IDR is recast in this complaint as “extractive,” “indiscriminate,” or “profitable abuse,” as if the issue lies not with insurer underpayment but with the presence of an independent referee who has the authority to disagree with them.
The impact on the real world is far from just a theory. These lawsuits aim for treble damages, annulment of arbitration awards, and injunctions intended to completely deny providers future access to IDR. The message from insurers is clear: engage in the IDR process established by Congress, and you will face consequences. Providers who utilize IDR are not seen as legitimate participants in a federal program; instead, they are viewed as targets, labeled as racketeers, pulled into costly litigation, and compelled to defend their right to contest underpayment. These lawsuits serve as a deterrent and act as a warning to discourage providers from engaging in IDR by making the costs of participation excessively burdensome.
Breaking the NSA Balance
No lawsuit will have more far reaching consequences for physicians than UnitedHealthcare v NorthStar Anesthesia (the insurer has filed five similar lawsuits). While this suit follows the usual script of allegations it aims for something more pernicious than unflattering headlines: declaratory judgment of fraud for ineligible disputes. The eligibility of an NSA dispute rests solely with CMS and the independent arbitrator – they are administrative. Physicians have repeatedly shown that insurers withhold critical information needed to determine a claim’s eligibility, the result being that occasionally physicians will dispute a claim that is ineligible for arbitration. According to CMS, with more than 80% of claims sent to arbitration being determined as eligible, these mistakes are the exception, not the rule.
However, if UnitedHealthcare is granted the relief it seeks, insurers will be able to challenge dispute eligibility in court, outside of arbitration, and receive direct judgments of “fraud” against physicians who have filed ineligible claims. A declaratory judgment of fraud would not simply reverse a payment. It would create precedent allowing insurers to relitigate administrative eligibility decisions in federal court and seek damages for disputes that arbitrators have already accepted into the federal process. This elevates an administrative error into reputational and legal risk that no physician practice could withstand.
The NSA’s public policy goal of removing patients from billing disputes, was buttressed by leveling the playing field between physician practices and insurance behemoths. The sweeping effects of this case will fundamentally alter the scales in favor of insurers and not just chill, but shut out doctors from obtaining fair reimbursement.
Shifting the balance of power
This situation should alarm policymakers as well as doctors and their patients. It embodies the risk of extended, multi-faceted litigation initiated by trillion-dollar insurance conglomerates targeting individual physicians, small practices, and safety-net hospitals that do not possess equivalent resources.
This pressure does not safeguard patients. Instead, it discourages providers from contesting underpayment, shifts the balance of power firmly back to insurers, and dissuades the use of the very system intended to resolve disputes and protect patients. In the meantime, insurers leverage extensive financial resources to maintain coordinated litigation efforts while depicting providers, especially those offering emergency care, as wrongdoers for employing the only legal remedy available.
Ultimately, these legal actions are not aimed at preventing misconduct. Instead, they focus on altering market structure. By transforming the routine application of IDR into a significant litigation risk, insurers are indicating that independent providers who challenge payment terms will face penalties instead of negotiations.
The foreseeable outcome is the consolidation of providers: small practices, emergency physician groups, and safety-net hospitals will be compelled to sell, affiliate, or close rather than endure the costs and uncertainties associated with defending against repeated federal lawsuits. As we’ve reported, Optum now employs more than 90,000 clinicians. Simultaneously, this approach accelerates the vertical integration of insurers, directing care toward entities that are either owned or aligned with insurers, which are shielded from payment disputes and arbitration. Within this context, the courts do not serve as a venue for resolving conflicts; they function as a mechanism for enforcing market discipline. This undermines the fundamental objective of the No Surprises Act to balance bargaining power and, in turn, reinforces insurer dominance over pricing, networks, and access to care.
A law meant to protect patients and equalize bargaining power is being weaponized by insurers to suppress those who question insurer payment practices and, in doing so, to silence the underdog.
New data shows the U.S. is moving backward on coverage, not forward—raising a harder question: is the problem affordability, or priorities?
Will the U.S. ever provide health care for all its citizens?
The prospects are dim for enacting a system that provides services for the county’s entire population the way Europeans have done for decades. As the head of the German pharmaceutical association in Berlin once told me in an interview, “In the German system, nothing comes between us and our principle of solidarity.” I asked, “Even your profits?” “Not even our profits,” he replied.” Imagine any health care executive in the U.S., where the bottom line reigns supreme, daring to say a thing like that.
That interview with the German pharmaceutical executive came to mind again as I read the latest study from the Commonwealth Fund, which should be required reading for anyone interested in health policy and the future of the American system. The report by the Fund’s senior scholar, Sara Collins, said the Trump administration has “made it harder than ever for Americans to get good health insurance,” a conclusion that needs to be shared far and wide.
The administration itself predicts these changes will reduce enrollment in the Affordable Care Act marketplaces next year by 1.2 to 2 million people. The U.S. is falling backward in providing health care for all, a project that prompted Dr. Martin Luther King Jr. to observe long ago, “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”
At the Commonwealth Fund, Collins noted that those losses are on top of other changes expected to leave another 7.5 million people uninsured. Even though members of Congress hostile to the Affordable Care Act failed to repeal the act during Trump’s first term, Collins points out they still inflicted damage by whittling away at some of the law’s provisions. She reports that last year a majority of the public supported the Affordable Care Act’s enhanced premium tax credits, established in 2021. Republicans, however, did not pass legislation to extend those credits that helped millions of Americans, who now face annual premium increases of $750 to more than $4,000.
Does the destruction of the hard-won Affordable Care Act mean that a country as rich as ours cannot afford to pay for medical care like the rest of the world’s developed countries do, or does it mean those with clout don’t want those without to have health care? I am inclined to believe the latter.
That was not the only damage caused by the Trump administration. For example, a new rule for marketplace coverage increased out-of-pocket costs, eliminated special enrollment periods for those with low incomes, and put new restrictions on auto enrollment. In addition insurers raised premiums by 20% or more in many cases, hoping that those people who are healthy would not drop coverage and leave them with sick, and more costly, health plan enrollees. Such a strategy would be unheard of in countries with national health systems, where everyone is entitled to care.
“The Trump administration’s latest actions on the ACA marketplaces continue to make it as difficult and costly as possible for those with low and moderate incomes to get good health insurance and care they need,” Collins reported. “This will lead to more people with low and moderate incomes uninsured, underinsured, less healthy, and saddled with medical debt.”
Is this what Americans want for their health care system?
Nearly 47,000 comments hit regulators. Most weren’t written by seniors — they were engineered by insurers and their front groups.
When the federal government opened a public comment period earlier this year on Medicare Advantage payment rates for 2027, which were far lower than what private health insurers had expected from the Trump administration, something remarkable happened. Comments poured in at a record-breaking pace — nearly 47,000 in all, an all-time high for a Medicare rate notice.
Regulators took notice. A senior CMS official, perhaps trying to lighten the mood, joked that the flood of input might be “another innovation related to AI.”
It was a good line. But the reality was less amusing.
According to an analysis earlier this month by KFF Health News, about 82% of the more than 16,400 publicly available comments were identical to a letter that appeared on the website of a secretive advocacy group called Medicare Advantage Majority — a “dark money” organization that does not reveal its funders, other than to say it is “dedicated to protecting and strengthening Medicare Advantage” and is “powered by hundreds of thousands of local advocates nationwide.”
The letter warned that without higher reimbursements, seniors would face higher costs and fewer benefits. It was signed by thousands of people who almost certainly believed they were speaking for themselves. They were speaking for the industry.
The extent of the deception ran deeper than form letters. KFF Health News found at least one case that illustrates the tactic’s recklessness. Corenia Branham, a 90-year-old widow and cancer survivor in West Virginia, said she never submitted any comment to CMS — yet four form letters appeared online under her name. Branham, who isn’t even on Medicare Advantage, was unambiguous about her views: “I wouldn’t recommend it to nobody.” A spokesperson for Medicare Advantage Majority claimed she had responded to an ad on Facebook. Whether she understood that doing so would put her name on federal regulatory comments is another matter entirely.
Alongside the comment flood, insurers and MA associations funded research, launched ads, rounded up signatures, and met with government officials, submitting a barrage of comments arguing the proposed rule would be disastrous for payers and the seniors they serve. The Better Medicare Alliance, backed by the nation’s largest health insurers, led the charge. So did AHIP, the industry’s primary lobbying group. (And don’t believe for a minute that Medicare Advantage Majority wasn’t funded by the industry, too. In my old career in the insurance business I used to work with Washington propaganda shops to help set up front groups like that.)
The advertising blitz was impossible to miss if you spent any time in Washington. If you visited Washington’s Union Station in recent months and checked the monitor listing train departure times, you would be hard pressed to miss the large electronic billboards around them from an organization called the Coalition for Medicare Choices, another front group, featuring worried-looking seniors warning against cuts to Medicare Advantage. Despite billing itself as a grassroots organization, the Coalition for Medicare Choices was founded out of the same offices as AHIP. The Better Medicare Alliance — whose membership includes UnitedHealth, Humana, and Aetna — ran its own paid media campaign. The group spent over $13.5 million on ads, while yet another dark-money group added $2 million more.
What looked like a nationwide groundswell of concerned seniors was, in large part, a carefully coordinated pressure campaign designed to move our tax dollars — tens of billions of them – to insurance conglomerates that operate private Medicare Advantage plans.
This playbook is not new. It has a name: astroturfing. The term was coined in 1985 by Texas Senator Lloyd Bentsen, who described a “mountain of cards and letters” sent to his office demanding his support for a bill favorable to the insurance industry. “A fellow from Texas can tell the difference between grass roots and AstroTurf,” Bentsen famously said. “This is generated mail.”
Forty years later, the insurance industry is still running the same play — only now with the tools of the internet, AI-assisted drafting, Facebook ads, and front groups bearing names designed to sound like patient advocates.
I know this tactic well. I helped write the playbook.
For years, as a senior executive at one of the country’s largest health insurers, I watched — and participated in — campaigns that manufactured the appearance of public support for industry-friendly policies. The goal was always the same: to make regulators and lawmakers believe that ordinary Americans were rising up in defense of private insurance, when in fact it was the industry pulling the strings. We called it grassroots outreach. It was anything but.
Shooting the Messenger: The Campaign to Discredit MedPAC
Flooding the CMS comment docket with form letters was only one front in the industry’s pressure campaign. Another target was the independent agency whose numbers made the strongest case for reform: the Medicare Payment Advisory Commission, better known as MedPAC.
MedPAC is a nonpartisan congressional advisory body with no financial stake in the outcome of Medicare policy. As we reported earlier, MedPAC’s January 2026 status report estimated that Medicare Advantage overpayments are projected to be $76 billion — or 14% more — above what spending would be in traditional Medicare for the same beneficiaries this year. That finding was politically inconvenient for the industry, so the industry set about undermining it.
The Wall Street Journal published an op-ed calling MedPAC’s methodology into question, with the editorial board going so far as to call for MedPAC to be defunded. Industry-backed lobbying groups like the Better Medicare Alliance and the Healthcare Leadership Council – an outfit formed by Humana founder David Jones and other top industry executives in the late 1980s to shape federal policy – amplified the editorial and supported legislation that would dictate how MedPAC’s staff can conduct research.
Last week, the war in Iran intensified and Kristi Noem’s tenure as DHS Secretary came to an unceremonious close. Perhaps lost in the noise was the February jobs report issued Friday by the U.S. Bureau of Labor Statistics. It showed a surprising decline in job growth prompting speculation the economy might have taken a downward turn. Some headlines….
Payrolls unexpectedly fell by 92,000 in February; unemployment rate rises to 4.4% (CNBC)
Employers Cut Jobs in Sign of a Shakier Economy (New York Times)
Paychecks keep rising for American workers, providing boost to household budgets (Fox Business):
The U.S. economy lost 92,000 jobs in February, stoking labor market worries (NBC News)
The US economy lost 92,000 jobs in February and the unemployment rate rose to 4.4% (CNN)
Anticipation that the jobs report portends bad news for the economy followed the news cycle all day and through the weekend. And a few, like Axios, went further: “The surprise to many was where the biggest since job growth especially in healthcare and social assistance had buoyed the labor market for 3 years.” Others attributed the decline to hangovers from recent nursing strikes (USC Keck, Kaiser Permanente, MarinHealth) and layoffs by many health systems.
To industry insiders, the BLS jobs report’s capture of declines in healthcare hiring was no surprise. Operating cost reduction has been a strategic imperative in every hospital, long-term care, ancillary and medical group since the pandemic (2020). In tandem, investments in workforce productivity enhancements via technology-enabled workforce redesign and performance-based compensation have elevated human resource management to C-suite status in most organizations. It’s understandable:
Healthcare is capital intense: it needs appropriations from government and in-flows from employers and individual taxpayers to pay its bills. Most of that pays for its labor costs. Today, most Board agenda include updates on labor relations, human resource management issues and workforce adequacy—it’s standard fare. And all weigh options to outsource and devour progress reports from HR management on AI-enabled investments anticipated to reduce labor costs.
Healthcare is highly regulated, especially in workforce activities, and labor-management relationships impact organizational performance and reputation. Every sector in healthcare is regulated by combinations of federal, state and local rules, laws and agency directives that define roles, responsibilities, decision-rights and constraints of its workforce. It’s complicated by the politics of healthcare which avoids policy changes that threaten protections sought by each labor cohort in healthcare. Protecting funding and restricting infringement on scope of responsibility by unwanted outsiders is the primary rationale for professional society’ advocacy efforts. In hospital and long-term care settings, the healthcare workforce is a cast-system that keeps doctors at the top of the pyramid, licensed mid-levels in the middle and everyone else below. In other healthcare settings, executive-level designations dominate hierarchies, and in some Boards play roles in workforce structure and compensation schemes. Workforce modernization in most healthcare settings is acknowledged as a critical need but most default to layoffs and fail to enact a comprehensive strategy.
Looking ahead, technology will alter the status quo for workforce modernization efforts in healthcare:
1-Less dependence on physician recommendations. Might patients access customized clinical decision support tools more widely in the future and make more choices themselves (especially if incentives support self-care)? Might other sources of clinical counsel be more accurate, more accessible and less costly in the future, prompting acceptance (trust and confidence) by patients? Physicians and other caregivers will play key roles, but in concert with tools and processes that enable consumer engagement.
2-More access to verifiable cost, price and value information. The underlying costs and prices for healthcare services are unknown to their caregivers at the points of care so the majority of transactions require pre-authorization by a third-party adjudicator with payments that follow. Physicians bear no responsibility for advising patients about costs and prices: theirs is exclusively the domain of clinical counsel. Thus, labor costs in healthcare presume third party payments, middlemen, incapable self-care and work rules that reinforce old ways and torpedo better ways of work. Might the role and scope of insurer activity be integrated with delivery so that “costs and quality” are directly accountable to providers? Might primary and preventive health hubs (physical + behavioral + nutrition + prophylactic dentistry + self-care enablement + insurance) become the centerpieces of community health replacing traditional insurers and hospitals? Where will the workforce choose to work?
Per the Healthcare Workforce Coalition (www.healthcareworkforce.org), healthcare workforce shortages are a near and present danger to the U.S. health system: shortages of physicians, nurses and allied health professionals are significant, especially in rural areas. The 18-million who constitute the healthcare workforce today are being told to work harder with less. It’s no secret.
In the Affordable Care Act (2010), Title 5 (Section 5101), healthcare workforce modernization was authorized: “The purpose of this title is to improve access to and the delivery of health care services for all individuals…” Subtitle B authorized creation of a 15-member National Health Care Workforce Commission to recommend modernization policies. It would have coordinated workforce initiatives across federal agencies (HRSA, CMS, MedPAC, MACPAC, GAO, et al) along with states and private sector operators to address long-term issues and short-term execution challenges. The Commission never met because its funding was not authorized by Congress.
If the overall economy is dependent on healthcare to produce an appropriate share of job growth while reducing overall costs, modernizing its workforce is key. It must include unpaid caregivers, licensed and unlicensed providers and technology-enabled solution providers—not just traditional licensed professional groups and their academic partners. That’s not going to happen in the current political environment where each sector’s primary focus is protecting reimbursement and guarding against scope of practice threats.
The health system needs transformation. Workforce modernization is where to start.
Paul
P.S. My journey as a heart patient continues to teach me just how far we have to go as a “system.” Understanding what I have been billed for, by whom, when and why is like reading Russian. As best I can see, $267,490.30 has been charged by the hospital and 13 different doctors who’ve treated me in some way. How much I end up spending after rehab et al remains a mystery but it’s not remotely close to the hospital’s “price estimator” tool. Little wonder consumers are frustrated about healthcare costs pushing its affordability to the top of their Campaign 2026 concerns.
Trump’s proposal would revive “catastrophic” plans with deductibles as high as $31,000 — shifting even more costs onto patients with cancer, chronic illness, and medical emergencies.
On Friday, Erica Bersin – who has two chronic illnesses, including multiple sclerosis – wrote about the challenges of finding a decent and affordable health plan in the ACA marketplace. As a sole proprietor, the only plan with a manageable premium ($330 a month) came with a $10,000 deductible. MS drugs are expensive and many people with the disease have to pay hundreds and sometimes thousands of dollars out of their own pockets before their coverage kicks in. Sadly, the way the ACA plans are structured, Americans with chronic conditions – and others who are diagnosed with cancer or have a heart attack or other acute medical event and have no option for coverage other than the ACA marketplace – are penalized financially far more than the rest of us..
But instead of helping those folks out, the Trump administration is proposing to change the marketplace in ways that will make a $10,000 deductible seem like a bargain. Say hello to a $31,000 family deductible. And even if you’re covered by an employer-sponsored plan and in no imminent danger of being enrolled in a plan like that, know that their reappearance (they were outlawed 16 years ago), will push your premiums even higher than they already are. That’s because hospitals and physician practices know people enrolled in those plans will not be able to pay their bills. They’ll have no option but to increase their prices to cover the additional bad debt.
Health insurance policies with deductibles that high were prevalent before the Affordable Care Act was enacted in 2010. When I was a health insurance executive, I knew some insurers were selling policies with family deductibles north of $50,000. Not only that, many of them had annual and lifetime caps and wouldn’t pay for any care related to a preexisting condition.
They were officially called “catastrophic” plans. Patient and consumer advocates had a more appropriate name for them: junk plans. They were outlawed by the ACA, and I thought they had been buried for good. Unfortunately, the Trump administration is bringing them back to life.
I’m sure my former colleagues in the health insurance business went to work immediately getting those plans ready to sell once again to unsuspecting customers. That’s because they can be very, very profitable. Imagine having to pay $50,000 – or even $31,000 – out of your own pocket every year before your insurer will cover the care your doctor says you need. Cigna, where I worked, as well as Aetna and UnitedHealthcare, the country’s biggest health insurers, sold plans like that and collected billions in premiums every month but paid little if anything out in claims during a given year.
When I first testified before Congress, I was one of three people at the witness table, and all of us knew a lot about those plans – including Nancy Metcalf, who was senior program editor at Consumer Reports at the time. She in particular knew about the many shortcomings of those plans because she had heard horror story after horror story from people who had enrolled in a junk plan. She urged lawmakers to outlaw them – or at least make insurers put warning labels on them so people would know what they were buying and how little protection those plans provided. As Nancy testified:
Consumers need to be told, in big letters, what their policy’s out-of-pocket limit is, and right next to it, in equally big letters, if there are any expenses that don’t count towards that. They need to know approximately what their out-of-pocket costs will be for expensive treatments such as cancer chemotherapy, or heart surgery, or infusions of patented biologic drugs. They need, in other words, a fighting chance not to be ripped off by junk insurance.
As Reed Abelson of The New York Times reported last week, the administration’s proposal “involves a type of plan known as a catastrophic or skinny policy. While they may be appropriate for someone who is young and healthy, a sudden emergency room or unexpected hospital stay could cost thousands of dollars in unforeseen bills. People with chronic medical conditions also might have to pay for much – if not all – of their care out of their own pockets.”
Commonwealth Fund president Joseph Betancourt pointed out in the Times’ story that people are already struggling to pay for their medical care:
There’s no doubt that we have an affordability crisis. As we move forward to shifting more of the burden to patients, there’s a chance to really exacerbate the crisis.
Abelson noted that under the proposed rule change, insurance companies could not only sell the catastrophic plans on a multiyear basis once again, they could also sell plans that do not offer an established network of hospitals and doctors. “Those plans,” she wrote, “would instead pay a fixed amount for a doctor’s visit or procedure, and patients would have to pay any difference in price.”
Abelson also warned of another risk associated with sky-high deductibles: Because their premiums are lower, they “will end up being used as the benchmark for the level of subsidies in a given market. People who want a traditional plan with an established network could end up paying more because they receive a lower subsidy.”
As I mentioned, all of us will likely pay more for our coverage when these plans become legal again next year. As BenefitsPro reported last month – quoting the CEO of Community Health Systems, a big hospital chain – most patients who are currently in ACA plans with lower but still high deductibles and coinsurance requirements can’t pay very much of the “big out-of-pocket bills” hospitals have to send them.
How disappearing ACA subsidies, soaring premiums, and bureaucratic chaos nearly left a consultant with multiple sclerosis uninsured.
The business of health care is not broken; it is working exactly how it was intended. It was designed for people to pay in just in case something happens and then not to pay out when it does. It was intended to “maximize shareholder value.”
About 22 million Americans received enhanced premium subsidies in 2025. According to The Urban Institute and The Commonwealth Fund, it’s estimated that “7.3 million people will leave the ACA marketplace in 2026” due to the loss of the subsidies. About 5 million people will go uninsured, rather than find insurance elsewhere.
Some people have said their premiums and deductibles are doubling or even tripling with tens of thousands in deductibles before coverage kicks in. While absolutely imperfect, we must keep the Affordable Care Act intact for everyone otherwise the cost of Medicare, Medicaid, and private and employer-based insurance will skyrocket, resulting in millions of people losing coverage due to lack of affordability.
Accessible insurance is a huge part of living a healthy life. Because of this, we need to expand coverage and make it fair for everyone. The goal should be for every single person in the U.S. to have head-to-toe health care.
My Story
As a single-person LLC consultant, I have navigated the New York State Exchange (ACA) for years. It is the most expensive Exchange in the country for those who do not qualify for subsidies. If subsidies are received, an increase in income requires repayment via federal tax returns the following year.
For 2025, I resigned myself to a catastrophic plan at $330 per month with a $10,000 deductible, as other options approached $1,000 monthly. While applying in November 2024, my temporarily being in-between projects / contracts was interpreted by the NYS Exchange as being unemployed, which led me to unexpectedly qualify for Medicaid. The state market assured me that this was correct for consultants in my situation, and they “saw it all the time.”
However, during open enrollment in October 2025, I was informed that despite meeting the income threshold, I no longer qualified for either Medicaid or financial assistance / subsidies. The catastrophic plan doesn’t seem to exist now, and the “least expensive” option is $675 with poor / limited coverage. After four months, dozens of phone calls, six people (including an aide in my state assembly member’s office), and about 100 hours of everyone’s time, I have health insurance this year, for now.
Living with two chronic illnesses, including multiple sclerosis, my experience with a “government run” system over the last year has led me to believe that, for the most part, it works. Health care should be a right of birth, not a privilege for the rich.
This is just one person’s story. The rise in health care costs impacts everyone, but especially lower income Americans. You can see some of their fears, here.
The Trump administration is doubling down on efforts to revamp the federal discount drug program — a major flashpoint between Big Pharma and hospitals.
Why it matters:
The so-called 340B program has been mired in litigation, most recently over administration efforts to let drugmakers carry out price reductions through rebates instead of cutting prices at the front end.
After a court halted the attempt on procedural grounds, federal health officials this month laid the groundwork to reintroduce changes that providers say could cost them hundreds of millions of dollars.
Driving the news:
The Health Resources and Services Administration last week issued a notice soliciting feedback on whether and how to make hospitals and clinics in the program pay full price up front for the medications.
Drugmakers would then rebate the price difference later, after verifying that a facility qualifies for a discount.
The agency is asking hospitals for financial data to back up industry claims that such a change would threaten facilities’ cash flows and create administrative hassles as they contend with federal Medicaid cuts.
Context:
A federal court in Maine ruled late last year that the Department of Health and Human Services, which HRSA is part of, didn’t solicit enough stakeholder feedback before proposing its initial rebate model.
HHS “cannot fly the plane before they build it,” Judge Lance Walker wrote in response to a lawsuit from the American Hospital Association and other hospital groups.
HHS scrapped the pilot in January and dropped its appeal of the decision.
The new notice it sent this month “suggests a sense of urgency in advancing a new rebate model proposal,” lawyers at Quarles & Brady wrote in a blog post.
Still, HHS would need to formally propose and gather comment on any future model, and has committed to giving providers at least 90 days’ notice before starting the new system.
Where it stands:
The drug industry trade group PhRMA sees the rebate model as a way to add needed transparency to federal drug discounts, spokesperson Alex Schriver said in a statement to Axios.
“We’re heartened by the administration’s efforts to ensure that the program operates as it’s intended,” CEO Steve Ubl told reporters last week.
Pharmaceutical companies have been trying to move in the direction of rebates themselves over the past couple of years, arguing that many providers are gaming the system and getting 340B program discounts as well as Medicaid rebates for drugs.
Courts have blocked individual companies like Bristol Myers Squibb and Johnson & Johnson from switching to rebates from up-front discounts.
The other side:
Hospitals are planning to respond to the information request, but they’re holding out hope that HHS will drop the rebate idea altogether.
HHS should “recognize that imposing hundreds of millions of dollars in costs on hospitals serving rural and underserved communities is not a sound policy,” Aimee Kuhlman, AHA vice president of advocacy and grassroots, said in a statement.
AHA and other hospital groups last week sent a letter to the administration asking to extend the comment period and potentially laying the groundwork for another legal challenge if that isn’t granted.
Community health centers, meanwhile, are urging Congress to pass a bill that exempts them from rebate experiments.
The bottom line:
The administration isn’t giving up on the rebate idea. That will only add to the controversy over a program that covers more than $81 billion in annual drug purchases.
Last week, the Trump White House released a plan to reduce health care costs that is consistent with its approach to many differing questions. There was a dominant populist impulse, with several provisions targeting corporate interests for supposedly causing most of the problems consumers experience, alongside a more libertarian orientation that emphasizes patient choice and control, although the proposals tied to this theme lacked sufficient detail to be convincing. What the White House did not provide is an actionable legislative plan to lower the cost of health care for most Americans. Instead, the status quo is almost certain to prevail this year and for the foreseeable future.
That might have been the intention, as the White House probably wants to avoid a protracted debate on health care as the midterm election approaches. The administration’s one-page summary of its ideas, called “The Great Healthcare Plan,” seems to have been put together for defensive reasons. The Republican Party has been scrambling for several months to deflect Democratic attacks over the December expiration of enhanced premium credits for Affordable Care Act (ACA) insurance plans that had been approved through 2025 during President Joe Biden’s term. The Trump White House’s plan was developed to provide the Republican Party, or at least key officials in the administration, with something to talk about when opposing a straight extension of the credits.
The administration’s plan contains nine proposals that purport to boost transparency, lower costs, or give consumers more control over their health care choices. The net effect of the plan will be minimal because the causes of high and rapidly rising health costs have deep roots and cannot be addressed with surface changes that leave untouched the basic architecture of the status quo.
Last week, the Federal Government released agency reports that paint a perplexing picture for the health industry entering 2026:
Tuesday, The Bureau of Labor Statistics released the EMPLOYMENT COST INDEX SUMMARY noting “Compensation costs for civilian workers increased 0.7%, seasonally adjusted, for the 3-month period ending in December 2025 and 3.4% for the 12-month period ending December, 2025.” Closer look: it was +3.6% for hospitals and +3.2% for nursing homes.
Wednesday, the Bureau of Labor Statistics released THE EMPLOYMENT SITUATION — JANUARY 2026: “Total nonfarm payroll employment rose by 130,000 in January, and the unemployment rate changed little at 4.3%… Job gains occurred in health care, social assistance, and construction, while federal government and financial activities lost jobs…Health care added 82,000 jobs in January, with gains in ambulatory health care services (+50,000), hospitals (+18,000), and nursing and residential care facilities (+13,000). Job growth in health care averaged 33,000 per month in 2025. Employment in social assistance increased by 42,000 in January, primarily in individual and family services (+38,000).” Closer look: the jobs report is based on employer sampling which is revised as subsequent surveys are added to the sample. Thus, data for any single month is at best only directionally accurate. Reliable federal data about the healthcare workforce remains a work in process.
Friday, BLS released the CONSUMER PRICE INDEX REPORT FOR JANUARY, 2026: “Consumer prices rose 2.4% in January from a year earlier down from 2.7% in December.” Core prices, which exclude volatile food and energy items, rose 2.5% from a year earlier vs. medical care commodities (+.3%), hospital services (+6.6%) and physician services (+2.1%). Closer look: prices for hospitals and physicians vary widely (by ownership, specialty, size and location) but differ in one respect: Medicare rates are used as a proxy for both, but rate setting for physicians disallows inflationary adjustments.
Taken together, they reflect the obvious: The healthcare economy is a big deal in the scheme of the overall economy and the nation’s monetary policy. The CBO’s revised projection shows it increasing from 18% of the GDP today to 20.3% by 2033.
But a closer look exposes worrisome signals in the reports:
Increased housing costs are destabilizing lower-and-middle income household finances resulting in increased medical debt, delayed care and heightened sensitivity to healthcare affordability. It also has direct impact on the availability of the local workforce where home ownership or rental costs are out of reach.
Hospital price increases used to offset escalating labor and supply chain costs are well-above other spending categories; some have healthy margins while others are struggling. Public perception about hospital finances is susceptible to misinformation and executive compensation is a lightning rod for detractors. Per a KFF report last week, hospitals accounted for a third of total health spending increases since 2023 but 40% of the total spending increase—higher than any other factor. That puts added pressure on hospitals to justify costs and account for prices.
The healthcare workforce has become the backbone of the labor market: the majority of its expanded labor pool are skilled and unskilled hourly workers for whom competitive wages and benefits are key. Healthcare delivery is labor intense. Across all settings in healthcare, efforts to increase productivity via data-driven, technology-dependent process improvements have been made. But reimbursements by payers have punished improvements in productivity requiring more work for less money. The result: disenchantment about the future of the system is a tsunami in the healthcare workforce.
In every hospital, medical group nursing home and home care organization, pressure to attract and keep a viable workforce is mission critical. In some, the Human Resource function is effectively aligned with regulatory, clinical and technology changes, in some, compensation plans from executive to support are strategically designed to optimize short and long-term performance and ROI. In some, the Board Compensation committee is well-prepared to adjust policies as talent requirements change. In some, leaders and frontline teams show mutual respect and sincere appreciation. But many fall short.
These reports are public record. But their headline stats don’t tell a complete story. Every healthcare organization is obligated to do the rest.
HENRY KOTULA 