More Perfect Union has just posted a video breaking down a truth that Big Insurance hopes you never hear: rising “health care costs” are really rising health insurance profits.
As I explained in the video, UnitedHealth, Cigna, CVS/Aetna are part of a cartel of corporate conglomerates that have built a business model that relies on overpayments in Medicare Advantage, shrinking doctor networks and a sprawling web of vertically integrated subsidiaries that vacuum up our premiums, deductibles and tax dollars — and turn them into shareholder returns as Wall Street relentlessly demands.
Here’s a bit of what I said:
“Your premiums, deductibles and pharmacy bills are all going up. We’re told it’s because medical costs are rising, but the bigger story is who’s capturing the money. In just three months, UnitedHealth Group made $4.3 billion in profits on revenues of $113 billion.
Over the past five years, the cost of a family premium has increased 26%. This year, the average cost of a family policy was almost $27,000.
Just about everybody with private insurance will be paying a lot more than that next year, regardless of whether you get it from your employer or buy it on your own. That’s because UnitedHealth and other big insurance companies cannot control rising health care costs.
In fact, insurance companies benefit from medical inflation. They just jack up their premiums enough to cover the additional cost and guarantee them a tidy profit.”
The video points out the real drivers of cost growth — from UnitedHealth’s nearly 2,700 acquisitions to Medicare Advantage overpayments that funnel billions from taxpayers into corporate profits.
If you haven’t watched it yet, I hope you will and share it with everybody else you know. It’s clear that Congress must pass common sense guardrails to stop Big Insurance from writing the rules of American health care and squeezing Americans.
Republicans are taking a harder line against extending enhanced Affordable Care Act subsidies — and doubling down on an alternative plan that would send the money directly to consumers.
Why it matters:
President Trump’s opposition to an extension makes it increasingly unlikely that Republicans will agree to renew the tax credits, even though it’s not clear how the GOP alternative would work or whether the party can reach a consensus.
Driving the news:
Trump wrote on Truth Social on Tuesday that the “only” plan he will support is “sending the money directly back to the people,” and that Congress should not “waste your time” on anything else, like a subsidy extension.
Trump didn’t elaborate on how his plan would work. The ACA already gives people financial help in buying insurance.
Some GOP proposals envision giving people money for a health savings account on top of existing ACA coverage, mitigating concerns about healthy people leaving the market.
Senate health committee Chair Bill Cassidy (R-La.) outlined a plan on Monday that would redirect the enhanced subsidy money to an HSA to help pay out-of-pocket costs for people who chose bronze-level ACA plans, which tend to have high deductibles.
He argued the move would direct money away from insurance companies and to consumers, and empower them to shop for health services.
Anotherpossible outcome would be allowing people to buy cheaper, skimpier coverage that doesn’t comply with the ACA’s benefit requirements. Some policy experts warn that would destabilize the ACA markets, by prompting an exodus of healthier people.
That would leave a sicker risk pool and prompt insurers to raise premiums, resulting in a “death spiral,” said Larry Levitt, executive vice president for health policy at KFF.
By contrast, “I don’t think there’s any risk of, you know, a collapse or death spiral, from what Senator Cassidy is talking about,” Levitt said, though without the enhanced subsidies there would still be “potentially millions of people who just won’t be able to afford insurance at all.”
Between the lines:
Senate Majority Leader John Thune (R-S.D.) wouldn’t rule out a bipartisan solution when asked about Trump’s comments on Tuesday, saying “we’ll see” how negotiations go and that “there’s an openness” to a deal on the GOP side.
He said the biggest obstacle, though, could be whether Democrats agree to apply the Hyde Amendment to the subsidies and add restrictions on using the funds for abortions.
The intrigue:
Cassidy is framing his plan as the most realistic option, given White House and House GOP leadership resistance to the subsidies.
“The president is not going to sign a straightforward extension of premium tax credits,” Cassidy said. “So if you actually want something which can pass and get a vote on the House floor, then what the president is proposing is actually a better way.”
Yes, but:
Democrats believe mounting public concern about rising health costs gives them the upper hand pushing for a subsidy extension.
“Sending people a few thousand dollars while doing nothing to lower health care costs is a scheme to help the ultra-wealthy at the expense of working people with cancer or pre-existing conditions,” Senate Democratic Leader Chuck Schumer said in response to Trump’s comments.
“Americans want Congress to extend the ACA tax credits to keep health insurance premiums from skyrocketing on January 1,” he added.
The big picture:
The war of words is further diminishing the chances that a group of moderates in both parties can find a bipartisan agreement to extend the subsidies with some modifications favored by Republicans, like an income cap and anti-fraud measures.
House GOP leaders have also been criticizing the subsidies. House Majority Leader Steve Scalise (R-La.) said on Fox News on Sunday that the party would be bringing forward legislation in the coming weeks on other ways to lower costs, like expanding HSAs or cracking down on pharmacy benefit managers.
The Senate Finance Committee will hold a hearing Wednesday morning on health care costs, giving senators a chance to stake out their positions further in public.
The bottom line:
It’s unlikely that Trump’s plan would gain the necessary 60 Senate votes to advance. But it could give Republican senators political cover if they oppose a subsidy extension.
Republicans could still opt to use the reconciliation process to pass a bill with a simple majority. Though the White House floated the idea on Tuesday, it’s not clear if any GOP-only plan has the votes to pass.
The Trump administration is expected to spell out its intentions for Medicare Advantage soon — a program that enrolls about half of U.S. seniors but has drawn intensifying criticism for costing the government too much.
Why it matters:
Centers for Medicare and Medicaid Services chief Mehmet Oz called the system “upside down” during his confirmation hearings, hinting at possible changes to the way the federal government pays and regulates plans.
Any big changes would be a departure from a history of friendly treatment from Republican administrations.
Those could become apparent in the proposed 2027 Medicare Advantage rule, which may come out before the end of this year.
How it works:
Many privately run Medicare plans charge no monthly premium and provide supplemental benefits that traditional Medicare doesn’t cover,like dental coverage and help paying for over-the-counter drugs.
The program was created on the premise that private insurers could manage care better and at a lower price point than the federal government.
But some insurers have since drawn fire for categorizing patients as sicker than they are to get higher payments, and for overly complicated pretreatment reviews.
Advisors to Congress projected the federal government would spend about $84 billion more on Medicare Advantage enrollees this year than for people in traditional Medicare. (Insurers say the advisors’ methodology is flawed.)
Oz has a history of promoting Medicare Advantage plans on his popular television show and advocating for an “MA for All” policy.
But he’s been more openly skeptical since joining the administration, as a growing cadre of GOP policymakers ask questions about the program’s finances and insurers’ role in driving up costs.
“I came both to celebrate what you’re trying to do, but also be honest about some of the issues that we’re seeing at CMS,” Oz said at the industry lobby’s conference last month.
Oz believes choice and competition are needed for a strong Medicare program, but also that CMS has a responsibility to keep “program payments fair, transparent, and grounded in data,” Catherine Howden, the agency’s director of media relations, told Axios in response to a request for comment.
This is an opportunity for Medicare Advantage insurers to have some strategic conversations with CMS about Oz’s vision for the program, said Daniel Fellenbaum, senior director at Penta Group.
UnitedHealthcare, Humana and Aetna are the three biggest Medicare Advantage insurers and cover more than 20 million seniors combined.
Where it stands:
This year CMS announced what it termed an “aggressive” strategy to increase audits of the diagnoses Medicare Advantage plans document for enrollees, which could claw back money from insurers.
Medicare’s Innovation Center said it’s working on pilot programs that could change the way thegovernment pays the plans.
Industry onlookers are also expecting the administration to propose changes to the star ratings system, which measures Medicare Advantage plan quality and dictates bonus payments to plans.
What they’re saying:
Insurers and advocates of private Medicare plans remain optimistic that Oz has their best interests at heart.
“He seems to stress good oversight and holding the program to high standards without losing sight of what’s working for seniors,” said Susan Reilly, vice president of communications at Better Medicare Alliance.
Insurance trade group AHIP welcomes “constructive, data-driven conversations with policymakers on actions that strengthen Medicare Advantage,” CEO Mike Tuffin said in a statement to Axios.
AHIP wants a focus on stability in the program after several years of medical costs increasing faster than Medicare Advantage payment, it said.
Reality check:
The 2026 update to plan payment, the first of this administration, is better than anticipated for insurers, giving them more than $25 billion increase in federal payments.
The Trump administration also struck voluntary agreements with insurers to simplify the rules for authorizing procedures and treatments ahead of time, rather than using its regulatory authority to require changes.
“We hear rhetoric talking tough on MA, but we’ve not seen them put that into actual reality,” said Chris Meekins, managing director at Raymond James.
Any big policy changes next year would also become apparent to seniors right before the midterm elections. Bigger policy swings from the administration might be more likely to go into effect for 2028, Meekins said.
What we’re watching:
President Trump has been vocal about his distaste for health insurance companies on social media lately as Congress debates extending enhanced premium subsidies for Obamacare coverage.
That ire could seep into how he directs his administration to regulate Medicare Advantage.
The Trump administration is expected to spell out its intentions for Medicare Advantage soon — a program that enrolls about half of U.S. seniors but has drawn intensifying criticism for costing the government too much.
Why it matters:
Centers for Medicare and Medicaid Services chief Mehmet Oz called the system “upside down” during his confirmation hearings, hinting at possible changes to the way the federal government pays and regulates plans.
Any big changes would be a departure from a history of friendly treatment from Republican administrations.
Those could become apparent in the proposed 2027 Medicare Advantage rule, which may come out before the end of this year.
How it works:
Many privately run Medicare plans charge no monthly premium and provide supplemental benefits that traditional Medicare doesn’t cover,like dental coverage and help paying for over-the-counter drugs.
The program was created on the premise that private insurers could manage care better and at a lower price point than the federal government.
But some insurers have since drawn fire for categorizing patients as sicker than they are to get higher payments, and for overly complicated pretreatment reviews.
Advisors to Congress projected the federal government would spend about $84 billion more on Medicare Advantage enrollees this year than for people in traditional Medicare. (Insurers say the advisors’ methodology is flawed.)
Oz has a history of promoting Medicare Advantage plans on his popular television show and advocating for an “MA for All” policy.
But he’s been more openly skeptical since joining the administration, as a growing cadre of GOP policymakers ask questions about the program’s finances and insurers’ role in driving up costs.
“I came both to celebrate what you’re trying to do, but also be honest about some of the issues that we’re seeing at CMS,” Oz said at the industry lobby’s conference last month.
Oz believes choice and competition are needed for a strong Medicare program, but also that CMS has a responsibility to keep “program payments fair, transparent, and grounded in data,” Catherine Howden, the agency’s director of media relations, told Axios in response to a request for comment.
This is an opportunity for Medicare Advantage insurers to have some strategic conversations with CMS about Oz’s vision for the program, said Daniel Fellenbaum, senior director at Penta Group.
UnitedHealthcare, Humana and Aetna are the three biggest Medicare Advantage insurers and cover more than 20 million seniors combined.
Where it stands:
This year CMS announced what it termed an “aggressive” strategy to increase audits of the diagnoses Medicare Advantage plans document for enrollees, which could claw back money from insurers.
Medicare’s Innovation Center said it’s working on pilot programs that could change the way thegovernment pays the plans.
Industry onlookers are also expecting the administration to propose changes to the star ratings system, which measures Medicare Advantage plan quality and dictates bonus payments to plans.
What they’re saying:
Insurers and advocates of private Medicare plans remain optimistic that Oz has their best interests at heart.
“He seems to stress good oversight and holding the program to high standards without losing sight of what’s working for seniors,” said Susan Reilly, vice president of communications at Better Medicare Alliance.
Insurance trade group AHIP welcomes “constructive, data-driven conversations with policymakers on actions that strengthen Medicare Advantage,” CEO Mike Tuffin said in a statement to Axios.
AHIP wants a focus on stability in the program after several years of medical costs increasing faster than Medicare Advantage payment, it said.
Reality check:
The 2026 update to plan payment, the first of this administration, is better than anticipated for insurers, giving them more than $25 billion increase in federal payments.
The Trump administration also struck voluntary agreements with insurers to simplify the rules for authorizing procedures and treatments ahead of time, rather than using its regulatory authority to require changes.
“We hear rhetoric talking tough on MA, but we’ve not seen them put that into actual reality,” said Chris Meekins, managing director at Raymond James.
Any big policy changes next year would also become apparent to seniors right before the midterm elections. Bigger policy swings from the administration might be more likely to go into effect for 2028, Meekins said.
What we’re watching:
President Trump has been vocal about his distaste for health insurance companies on social media lately as Congress debates extending enhanced premium subsidies for Obamacare coverage.
That ire could seep into how he directs his administration to regulate Medicare Advantage.
Wall Street reacts to the failed ACA subsidy extension — and to the president’s swipe at “money sucking insurance companies.”
Wall Street got the jitters yesterday after Donald Trump’s pointed remarks about “money sucking insurance companies” and a Congressional deal that failed to extend the enhanced subsidies under the Affordable Care Act (ACA) marketplace plans. According to one market analysis, shares of Centene (CNC) plunged about 8.15% in pre-opening trade, while competitors such as Molina (MOH) fell 4.6%, Elevance (ELV) dropped 3.7%, UnitedHealth Group (UNH) slipped 1.9% and Humana (HUM) declined 1.45%.
Why the sell-off? Because the enhanced ACA subsidies — which reduce premiums for some marketplace enrollees — expire at the end of the year and without renewal, an estimated 3.8 million people could lose coverage, and premiums would rise significantly for others. Insurers that rely on the stability and growing enrollee base of the ACA marketplace face heightened risk when that funding is in question – especially when the dollars are guaranteed – like when they are shoveled out from the federal government.
Still, it’s worth noting that the ACA marketplace business is not the primary profit engine for most large payers. Their bigger gains typically come from taxpayer-funded programs like Medicare Advantage, Medicaid managed-care contracts and veterans’ / VA contracts.
Here’s how five of the major players fared in 2024 profits:
Centene: $3.2 billion (+590% since 2014)
UnitedHealth Group: $32.2 billion (+214% since 2014)
Elevance: $9.1 billion (+78% since 2014)
Humana: $2.6 billion (+8.3% since 2014)
Molina: $1.18 billion (+780% since 2014)
Because most of their gains have not come from ACA exchange plans (and especially not the thin margin employer market) but through their other government-subsidized businesses, investors can have some certainty their investments in those companies are still largely safe and Big Insurance will be able to weather this storm.
For instance, the industry has always been able to strongarm rough patches in the consumer market – as long as they can stave off any meaningful changes to their bread and butter taxpayer-funded programs. As we reported last month, the industry’s outside PR and lobbying friends – Better Medicare Alliance and Medicare Advantage Majority – have hit the airwaves and the halls of Congress to halt the advancement of the No UPCODE Act. The bipartisan bill, sponsored by Senators Bill Cassidy (R-LA) and Jeff Merkley (D-OR) would end wasteful, fraudulent practices in Big Insurance’s Medicare Advantage businesses that funnel taxpayer money into the pockets of industry executives and Wall Street shareholders and could save taxpayers as much as $124 billion over the next decade and keep the Medicare Trust Fund solvent for years longer.
As of this morning, insurers seem to be fairing better. Centene, UnitedHealth Group, Elevance, Humana and Molina are all back in the green.
Research suggests UnitedHealth may be running a shell game — one that lets insurers flout regulations and obscure the harmful consequences of their vertical integration strategies.
A new Health Affairs study has confirmed that UnitedHealth Group — the nation’s largest health care conglomerate — is doing more than dominating the market; it’s playing by a different set of rules.
Researchers Daniel Arnold of Brown University and Brent Fulton of UC Berkeley analyzed new federal “Transparency in Coverage” data and found that UnitedHealth’s insurance arm, UnitedHealthcare, pays its own Optum physicians 17% more on average than it pays other doctors for the same services. And in markets where UnitedHealthcare holds a large share — 25% or more — that gap explodes to 61%.
The Affordable Care Act’s medical loss ratio (MLR) rule requires insurers to spend at least 80–85% of premium revenue on patient care, rather than on administrative expenses and profits, but if an insurer can funnel “medical spending” to its own subsidiaries — in this case, the thousands of subsidiaries that now comprise Optum — it can appear to comply with the law while actuallyshifting massive amounts of revenue from one pocket to another.
Under the MLR rule, insurers are required to send rebate checks to their customers if they don’t comply with the MLR requirement. The Health Affairs research suggests that UnitedHealth may be flouting that rule by deliberately overpaying the health care delivery operations it owns to comply with the letter of the law if not the intent. Because physician practices and other provider entities are exempt from the MLR rule, regardless of ownership, UnitedHealth can avoid sending its customers the rebates they otherwise would get and pad the conglomerate’s bottom line.
As the researchers put it:
“The results suggest that intercompany transactions within health care conglomerates may warrant scrutiny, as they may be signals of regulatory gaming or attempted foreclosure.”
Another way to game the system
This study also highlights another consequence: independent physician practices are being squeezed out. When UnitedHealth pays Optum doctors more — and non-Optum doctors less — it creates an uneven playing field that could drive small and mid-sized practices out of business.
The authors warn that this pattern “could lead to independent practices closing or joining larger groups such as Optum”. Over the past decade, Optum has quietly amassed more than 90,000 doctors under its control — more than any other private organization in the country.
And it’s not just doctors – UnitedHealth owns nearly 2,700 entities – a pharmacy benefit manager, a data analytics firm, home health companies and even surgery centers. The study notes that in 2024, Optum reported $253 billion in revenue, but 60% of that was simply money moving internally from UnitedHealthcare. In other words, UnitedHealth’s empire is built on being able to feed itself by self-dealing.
The point
This research provides some of the strongestevidence yet that UnitedHealth’s “vertical integration” strategy is distorting the market — not to improve care but to maximize profits under the guise of “compliance.”
For regulators at the Department of Justice, the Department of Labor (which has jurisdiction over employer-sponsored plans administered by UnitedHealth and other insurers) and the Centers for Medicare and Medicaid Services, this should be a wake-up call. As the authors conclude, even a 1% artificial price increase through these internal transfers could significantly reduce the rebates insurers owe consumers under the medical loss ratio rule. That’s billions of dollars that patients, taxpayers and employers are entitled to but that never leave the company’s bank account – except to reward shareholders and top executives. During just the first nine months of this year, UnitedHealth reported making nearly $19 billion in profits on revenues of more than $334 billion. Both revenues and profits likely would have been considerably less if not for the apparent gaming the Health Affairs researchers uncovered.
As open enrollment begins and Congress remains deadlocked on whether to extend the ACA’s enhanced premium subsidies, one question looms large: Where does all the money we pay for health coverage actually go?
It’s a fair question. Premiums and out-of-pocket costs have risen relentlessly over the past decade. Since the Affordable Care Act was fully implemented, the average premium for an ACA marketplace plan has doubled, and the average deductible for a Silver plan has increased by 92%. Every year, families pay more, yet the coverage often feels thinner.
What the Insurers Say
Health insurance companies routinely claim these increases simply reflect rising medical costs and higher utilization. For example, when justifying rate hikes in 2024, Cigna of Texas wrote:
“The increasing cost of medical and pharmacy services and supplies accounts for a sizable portion of the premium rate increases.”
But the financial filings of these same companies tell a different story.
What the Numbers Show
As Wendell Potter recently wrote, from 2014 to 2024 the seven largest publicly traded health insurance companies, UnitedHealth Group, CVS/Aetna, Cigna, Elevance (formerly Anthem), Humana, Centene, and Molina, reported that they collectively made more than half a trillion dollars in profits.
That’s money collected from individuals, employers and taxpayers for health coverage — dollars that didn’t go to medical care but instead flowed to corporate shareholders and executive bonuses. To put this in perspective, those profits alone could fund the enhanced ACA premium subsidies for another ten years, at an estimated cost of $350 billion.
Over the same period, these seven companies spent $146 billion buying back their own stock or, in other words, using premium dollars from patients and employers to boost share prices and executive compensation (the CEOs and many other top executives of big insurers are compensated primarily through stock grants and options).
Stock buybacks don’t lower premiums, expand networks, or improve care. They simply make investors and executives richer. If that same money had been reinvested in enrollees, it could have provided premium-free health coverage to more than 5 million families for an entire year, based on the average employer-sponsored plan cost of $27,000 in 2026.
Lobbying With Our Premium Dollars
Insurers aren’t just rewarding shareholders, they’re also shaping the political system that protects their profits. Since 2014, the seven largest insurers and their trade association, AHIP, have spent $618 million on lobbying.
That’s money that could have been used to lower out-of-pocket costs or improve patient care, but instead it’s spent to influence Congress and federal agencies to maintain the status quo.
The Real Problem — and the Real Solution
As the cost of health insurance continues to climb, politicians debate how to control those costs and expand coverage. But the truth is, there’s already enough money in the system to cover everyone. It’s just being siphoned off by insurance corporations for profits, lobbying, and stock buybacks.
Though some have been calling for less regulation of Big Insurance, that is not the answer and is partly how we ended up in this situation. Right now, Big Insurance is allowed to use premium dollars and tax dollars on things that do nothing to improve anyone’s health – such as stock buybacks and lobbying – instead of on medical care.
Rather than asking families and taxpayers to pay more, it’s time to demand accountability from insurers. At a minimum, they should not be allowed to use premium dollars, or taxpayer dollars, to enrich shareholders through stock buybacks (which wasn’t even legal until the 1980s) or lobby for policies that drive up costs.
If we want to contain health care costs, the first step is simple: Stop the profiteering by Big Insurance.
Elevance’s Anthem Blue Cross plans are joining Big Insurance’s latest profit play — cutting payments to hospitals and providers under the pretense of reducing patients’ out-of-pocket costs.
Anthem Blue Cross plans have joined UnitedHealth and Cigna in taking extreme measures to satisfy Wall Street but penalize hospitals and potentially thousands of doctors and physician groups that Anthem excludes from its provider networks.
What Anthem is proposing is not only extreme but brazen in that it goes way beyond what any managed care company I know of has ever undertaken to pad its bottom line by reducing patient choice. It wouldn’t just restrict access to certain providers, it would effectively eliminate access.
Anthem, which is owned by the for-profit corporation Elevance Health Inc., has notified hospitals in 11 of the 14 states where it operates that starting in January it will slash reimbursements by 10% every time a doctor who works in the hospital – but who is not in Anthem’s network – provides care to a patient enrolled in an Anthem health plan.
The move clearly will save Elevance money and help it meet its shareholders’ profit expectations, but it will be a potential nightmare and administrative expense for thousands of hospitals and outpatient facilities. And it could put many independent physician practices out of business.
As Fierce Healthcare reported Friday, Anthem will impose an administrative penalty equal to 10% of the allowed amount on a hospital or outpatient facility’s claims that include out-of-network providers. If those facilities don’t meet Anthem’s terms, they will be at risk of being dropped from Anthem’s network.
Anthem’s announcement comes on the heels of UnitedHealth’s disclosure to investors last month that it plans to dump thousands of doctors from its networks to boost profits. A UnitedHealth executive said during the company’s third quarter call with shareholders that there were too many doctors in the company’s network who were not aligned with UnitedHealth’s business model, which he called “value-based care.”
“We are moving to employed or contractually dedicated physicians wherever possible,” said Patrick Conway, CEO of UnitedHealth’s Optum division, which has bought hundreds of physician practices over the past several years. UnitedHealth is already the biggest employer of doctors in the country.
And last month, Cigna began reducing payments to many doctors automatically by resurrecting a practice called downcodingthat was banned by a federal court more than two decades ago. Cigna also is threatening to drop hundreds of hospitals and outpatient facilities operated by Tenet Health from its provider network next year.
The stock prices of all three insurers have been under pressure this year as shareholders have sold millions of their shares in reaction to what they consider bad news from the companies. Most investors consider increases in paid medical claims to be bad news and a threat to the value – and earnings potential – of their holdings.
Anthem claimed in its notice to hospitals and other facilities last month that it is implementing the new policy “to support patient care and to help reduce out-of-pocket expenses for our members.” The notice went on to say that, “As a participating facility in Anthem’s care provider network, your role in guiding members to in-network care providers is vital in ensuring members receive high-quality, cost-effective, and coordinated care.”
Sounds good, right? But how is a patient to know that the doctors in Anthem’s network are really the ones that truly deliver high-quality coordinated care? Could it be that the top priority of the insurer is to include providers in its network who agree, first and foremost, to reimbursement terms especially favorable to the insurer?
And for hospitals, this could lead to higher administrative costs in trying to figure out which doctors are available at any given time to treat an Anthem patient. A highly regarded anesthesiologist might be just fine – and available – to treat patients insured by Cigna or Aetna or Humana, but off limits to treat an Anthem-insured patient. The hospital will have to be especially vigilant to keep that doctor out of the operating room when an Anthem patient needs surgery. If it slips up the hospital could get booted out of Anthem’s network. The doctor, however, would not be able to bill the patient for any amount because of the federal No Surprises Act (NSA), which prohibits balance-billing.
Anthem’s claim that it is taking this action to reduce patients’ out-of-pocket expenses is especially rich when you remember that Anthem and other big insurers created the problem Anthem says it is seeking to address. Anthem, Cigna, UnitedHealth and other big insurers led what became an industry-wide strategy in the early 2000s to force as many of their health plan enrollees as possible – and as soon as possible – into high-deductible plans. That strategy was so successful that more than 100 millions Americans – the vast majority of whom have health insurance – are mired in medical debt.
Fierce Healthcare quoted an Elevance executive as saying that the new Anthem policy “was designed in response to provider behavior under the independent dispute resolution (IDR) process” established by the No Surprises Act. He said Anthem had seen “a consistent pattern of IDR being used as a ‘back-door payment channel’ for pricey, nonemergent procedures.”
But as HEALTH CARE un-covered reported recently, research is showing that insurers are manipulating the IDR process to their advantage by exploiting loopholes in the NSA. Doctors have told me that even when they prevail in a dispute, insurers often refuse to pay promptly, if at all, and they report long delays, repeated administrative hurdles, and in some cases outright nonpayment of arbitration awards. And a report published last week in Health Affairs describes the “hidden incentives” of insurers in the IDR process that the authors say add costs to health plans and beneficiaries “and the health care system at large.”
Independent practice physicians have begun raising alarms about Anthem’s new policy. And on Wednesday, medical societies representing thousands of doctors sent a letter to Elevance CEO Gail Boudreaux protesting Anthem’s plans and asking for a meeting.
Letter sent to Elevance CEO Gail Boudreaux, by the American Society of Anesthesiologists, American College of Radiology and American College of Emergency Physicians.
“This policy is deeply flawed and operationally unworkable,” they wrote. “It effectively shifts Elevance’s network adequacy obligations onto facilities, holding them financially liable for the contracting status of independent physician groups–an area over which they have no control or infrastructure to manage. Hospitals will be forced to compel independent providers to join Elevance’s network under unfavorable terms leading to a risk of worsening financial instability and the loss of clinicians. The need to reorganize or replace physician groups will jeopardize hospitals’ continuity of care and patient access to care.”
The letter went on to say that, “Expecting facilities to monitor and enforce payer contracts across dozens of independent entities and multiple commercial plans is not only impractical but raises serious legal and ethical concerns.”
If the doctors can’t persuade Boudreaux to ditch the new policy, people enrolled in Anthem plans who need care in a hospital or outpatient facility next year could face confusion and delays in getting that care, and the facilities currently in their network might be kicked out of it if they make any mistakes.
Doctors’ concern about Anthem’s policy cannot be dismissed as an overreaction to one company’s business decision. It poses an existential threat to physician practices that want to stay independent and not sell out to either a hospital system or an insurance company. If the other health insurers follow Anthem’s lead – and there is no reason to think they will not – the number of doctors in independent practice in the United States will dwindle to extinction. There aren’t many left as it is.
Because of the control Wall Street now has over the health insurance industry, Boudreaux is likely less concerned about physician autonomy than what investors think and want, and she is under the gun to get back into their good graces in a matter of months. Her company’s shares have lost a third of their value since the first of this year. If she can’t demonstrate that she’s getting Elevance back on track to profitable growth, she’ll be out of a job soon.
Lawmakers and regulators at all levels of government need to keep an eye on this and intervene if doctors and Anthem patients can’t change her mind.
“Value-based care” in UnitedHealth’s Optum division apparently means fewer doctors for fatter margins.
UnitedHealth Group announced last week that it plans to cut thousands of doctors from its network, a move CEO Stephen Hemsley said will increase profits for the country’s richest health care conglomerate.
UnitedHealth assembled a network of nearly 90,000 physicians across the country as it bought hundreds of physician practices, began managing the Medicaid program in many states and became the biggest Medicare Advantage company. It also owns one of the nation’s largest pharmacy benefit managers, Optum Rx.
Of those 90,000 doctors, the company says fewer than 10,000 are currently directly employed by UnitedHealth. The company has been gobbling up a broad range of medical facilities in recent years, buying or creating nearly 2,700 subsidiaries and gaining direct control or affiliation with 10% of doctors working in the U.S. in the process.
The announcement by Hemsley came during a third-quarter earnings call with investors last week, when UnitedHealth announced it made $4.3 billion in profit in the last three months by generating revenues of $113 billion.
Read more here on how they did that. Spoiler alert: It involves raising health care premiums and collecting billions more from the Medicare Trust Fund and seniors.
Hemsley said the company’s health care services division, Optum Health, needed to consolidate its physician rolls to improve its bottom line.
He passed questions about how that will be done to Optum’s CEO Patrick Conway, who said too many doctors in the network weren’t aligned with UnitedHealth’s business model, which he called “value-based care.”
“We are moving to employed or contractually dedicated physicians wherever possible,” Conway said.
Overseeing an empire that offers health insurance, pharmacy benefits and doctors who provide care and write prescriptions, UnitedHealth has become America’s third-richest company behind Walmart and Amazon. There are 29.9 million Americans enrolled in UnitedHealthcare’s commercial plans, 8.4 million in its Medicare Advantage plans and 7.5 million in state-run Medicaid programs.
In 2024, the company brought in more than $400 billion in revenue, according to its financial filings.
Americans’ health care premiums are expected to rise drastically in 2026 after climbing as much as 6% on average this year compared to 2024.
UnitedHealth’s decision to remove doctors from networks means that many of its patients will have to find new, in-network physicians unless they change their insurers.
UnitedHealth isn’t alone in taking steps to trim its medical expenses to boost its bottom line. Both CVS Health, which owns Aetna, the PBM CVS Caremark and more than 9,000 retail pharmacies, and Cigna, which owns the PBM Express Scripts, also told investors they are implementing plans to improve earnings next year.
CVS Health is just behind UnitedHealth at No. 5 on the country’s Fortune 500 list, bringing in nearly $373 billion in revenue last year. Cigna is 13th with $247 billion in revenue.
The U.S. health system’s future is uncertain but outside forces will define its direction.
9 structural changes appear necessary to a transformed system of health that’s affordable, comprehensive and effective.
Last week, I had a 27-hour stay in a hospital emergency room waiting for an open bed and a morning at the food pantry loading boxes in anticipation of a possible SNAP program suspension surge. It wasn’t the week I expected. So much for plans!
Such is the case for health insurance coverage for millions in the U.S. as the federal government shutdown enters Week 6. Democrats are holding out for continuation of Affordable Care Act (ACA) insurance subsidies that enable 22 million to “buy” insurance cheaper, and Republicans are holding out for federal spending cuts reflected in the One Big Beautiful Act (July 2025) that included almost a trillion reduction in Medicaid appropriations thru 2036.
ACA subsidies at the heart of the shutdown successfully expanded coverage in tandem with Medicaid expansion but added to its costs and set in motion corporatization and consolidation in every sector of the health system. The pandemic exposed the structural divide between public health programs and local health systems, and insurance premium increases and prior authorization protocols precipitated hostility toward insurers and blame games between hospitals, insurers and drug companies for perpetual cost increases.
Having mediated discussions between the White House and industry trade groups as part of the ACA’s design (2009), I witnessed first hand the process of its development into law, the underlying assumptions on which it is based and the politics before and after its passage in March 2010. Its hanging chads were obvious. Its implementation stalled. Its potential to lower costs and improve quality never realized. It was a Plan disabled by special interests that rightly exploited its flaws and political brinksmanship that divided the country. But more fundamentally, it has failed to lower costs and improve affordability because it failed to integrate outside considerations—private capital, employers, technologies, clinical innovations and consumer finances—in its calculus.
Sixteen years later, healthcare is once again the eye of the economic storm. Insiders blame inconsistent regulatory enforcement and lack of adequate funding as root causes. Outsiders blame lack of cost controls. consolidation and disregard for affordability. Thus, while attention to subsidized insurance coverage and SNAP benefits might temporarily calm public waters, they’re not the solution.
All parties and all sides seem to agree the health system broken. For example, in my trustee surveys before planning sessions with Boards of health systems, medical groups and insurers, the finding is clear:
92% says the future of the U.S. health system in 7-10 years is fundamentally changed and not repeat of its past.
84% say their organizations are not prepared because short-term issues limit their ability to long-term planning.
Republicans think market forces will fix it. Democrats think federal policy will fix it. The public thinks it’s become Big Business that puts its interests before theirs. And the industry’s trade groups—AMA, AHA, AHIP, PhRMA, Adame, APHA, et al—face intense pressure from members adversely impacted by unwanted regulatory policies.
Few enjoy the luxury of long-term planning. That doesn’t excuse the need to address it. If a clear path to the system’s future is not built, incrementalism will enable its inevitable insolvency and forced re-construction.
What’s the solution? When comparing the U.S. health system to high performing systems in other high-income countries, these findings jump out:
All spend less on healthcare services and more on social services than the U.S.
All include government and privately-owned operators
All fund their systems primarily through a combination of federal appropriations and private payments by employers and citizens.
All pursue clinical standardization based on evidence.
All are dealing with funding constraints as their governments address competing priorities.
All are transitioning from episodic to chronic health as their populations age and healthiness erodes.
All are focused on workforce modernization and technologic innovations to lower costs and reduce demand for specialty services.
All enable private investment in their systems to increase competition and stimulate innovation.
All facilitate local/regional regulatory oversight to address distinctions in demand and resources.
All face with growing public dissatisfaction.
All are expensive to operate.
No system is perfect. None offers a copy-paste solution for U.S. taxpayers. And even if one seemed dramatically better, it would be a generational surge rooted in futility that welcome it.
What’s the answer? At the risk of oversimplicity, the future seems most likely built on these 9 structural changes:
Integrate social services (public health) with delivery.
Create comprehensive primary and preventive health gatekeeping inclusive of physical and behavioral health, nutrition, prophylactic dentistry and consumer education.
Rationalize specialty services and therapies to high value providers.
Incentivize responsible health behaviors across the entire population.
Increase private capital investments in healthcare.
Modernize the workforce.
Fund the system strategically.
Define and disclose affordability, quality and value systemically.
Facilitate technology-enabled self-care.
This will not happen quickly nor result from current momentum: the inertia of the status quo leans substantially toward protectionism not because it’s unaware. The risks are high. And while the majority of Americans are frustrated by its performance, there’s no referent to which look as a better mousetrap.
I anticipated last week would be pretty uneventful. It wasn’t. My Plan didn’t work out due, in part, to circumstances I didn’t foresee or control.
Healthcare’s the same. Outside forces seen or not will impact its future dramatically. Plans have to be made though Black Swans like the pandemic are inevitable. But long-term planning built on plausible bets are necessary to every healthcare organization’s future.
HENRY KOTULA 
