Blaming hospitals isn’t wrong. But it’s incomplete—and it’s exactly the story insurers want told.

Zack Cooper argued this week in The New York Times that Americans may be blaming the wrong culprit for rising premiums. In his view, the bigger driver is hospital market power—fueled by years of consolidation that policymakers have done little to stop. On that point, he’s on solid ground saying that hospital prices have climbed steadily, and oversight has lagged.

Where the argument falls short is in how it portrays insurers. It suggests they are largely on the defensive—unable to push back on powerful hospital systems and left to rely on tools like prior authorization and claim denials as a workaround. In that telling, insurers come across less as drivers of the problem and more as constrained players navigating a difficult market.

That’s not consistent with what I saw working inside the industry, or with how the business is structured to operate.

Cooper’s academic work on hospital consolidation is serious and worth engaging with. But the argument he made in the Times—whether intended or not—tracks closely with a line the insurance industry has advanced for years. It’s a familiar frame, and one I recognize because I helped design it.

The industry’s oldest trick

When I was head of corporate communications at Cigna, one of my core job responsibilities was to ensure that the public and policymakers understood what we called the “true drivers” of medical inflation. Those drivers were never us. They were hospitals charging too much, drug companies gouging patients, and — when we needed a villain closer to home — ordinary Americans overusing the health care system. The finger-pointing was deliberate, coordinated, and effective. As any magician will tell you, misdirection is the oldest trick in the book.

AHIP, the industry’s trade and lobbying group, is running that same playbook today with the full force of the industry behind it. In recent months it has blanketed Washington with the message that “hospital costs account for more than 40 cents of every premium dollar” and that hospitals should “stop looking around for someone else to blame.” This is not an inaccurate claim. It is an incomplete one, deployed with the precision of a public relations campaign rather than the rigor of a policy argument. The fact that Cooper’s op-ed reinforces that message — even from an independent and credentialed source — is a gift to an industry that has been under unprecedented scrutiny since the murder of a UnitedHealthcare CEO in late 2024.

I am not suggesting Cooper wrote his piece on AHIP’s behalf. I am suggesting that a structurally incomplete argument, published in arguably the country’s most influential newspaper at this precise moment, serves the insurance industry’s interests whether or not that was anyone’s intention.

Who started the consolidation arms race?

Cooper’s framing also elides a crucial piece of history. Hospital consolidation did not happen in a vacuum. Hospitals began merging in significant part as a defensive response to the growing bargaining power of large insurers. Providers seeking to consolidate often cited a desire to acquire bargaining leverage with market-dominant payers, arguing that their own consolidation could counter the consolidation of increasingly powerful insurers.

Insurer consolidation begat hospital consolidation, which begat higher prices, which begat higher premiums. It is an arms race in which the only losers are patients and employers.

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Prior Authorization: Care, Delayed | EP 3

In the third episode of the HEALTH CARE un-covered Show, we take a deep dive into prior authorization’s toll — from doctors to federal policy — featuring Dr. Wendy Dean, Dr. Seth Glickman and Rep. Suzan DelBene (D-WA) on CMS’s new AI-driven WISeR model.

Watch the full episode here.

Cooper is right that hospital market power is now the dominant force driving costs. But the insurers that consolidated first — and that benefited by squeezing providers in the short run — helped create the conditions for the hospital consolidation wave that followed. Neither side’s hands are clean. The arms race, which dates back to the rapid horizontal consolidation that occurred in the insurance industry in the 1990s and early 2000s, is what patients are now paying for.

Now to the incentive problem Cooper’s framing obscures. In commercial insurance — particularly the self-funded arrangements that now cover most large employers — the insurer often earns fees tied to the total size of claims processed. Higher hospital prices mean larger claims. Larger claims can mean higher revenue for the insurer administering the plan. This is not a conspiracy. It is arithmetic. The incentive to hold the line on hospital prices is weaker than Cooper suggests because in many arrangements, higher costs flow through to the insurer’s bottom line.

The Affordable Care Act’s medical loss ratio rules were supposed to fix this by requiring insurers to spend 80% to 85% of premiums on care. What those rules actually do, in a rising-cost environment, is allow absolute profits to grow even as the percentage stays fixed. If the pie gets bigger, the insurer’s slice gets bigger too — even at the same ratio.

The network access trap

In markets where a single hospital system controls the majority of beds, the insurer faces a problem that has nothing to do with negotiating skill. It cannot exclude that hospital from its network and still have a product to sell. Employers and individuals will not buy a plan that locks them out of the dominant regional provider. The hospital knows this. The insurer knows this. What gets called “negotiation” in these markets is often closer to ratification.

The insurer’s response to this trap — when it cannot win at the hospital price table — is not to fight harder. It is to redirect. Costs that cannot be controlled at the source get shifted somewhere more manageable: onto patients, through higher deductibles and narrower benefits; onto providers, through prior authorization burdens and claims denials; onto employers, through premium increases framed as the inevitable result of “medical trend.”

This is the point Cooper comes closest to and doesn’t quite reach. He writes that insurers “are incentivized to lower health spending, but in many markets don’t have the ability to put meaningful pressure on hospital prices.” That’s true. What is also true is that they put pressure on everything else, which all too often has the effect of reducing access to medically necessary care.

Prior authorization, step therapy, utilization management — these are not crude approximations of cost control. They are the rational corporate adaptation to a problem the insurer has decided not to solve at its source. They extract value from the system by making care harder to access rather than cheaper to provide. And they do so in a way that is largely invisible to the public as a cost-shifting mechanism, because each individual denial looks like a clinical decision rather than a financial one.

Cigna’s earnings tell a story Wall Street loves but its retreat from the ACA Marketplace could accelerate a system already tipping toward collapse.

Cigna reported its first-quarter 2026 results last Thursday. Like most of the other big health insurance conglomerates that have reported so far, it did a better job of meeting Wall Street’s profit expectations in the first three months of the year than it did in all of 2025.

Total revenues rose 5% to $68.5 billion. Adjusted income from operations came in at $2.1 billion, or $7.79 per share — up 12% from a year ago, though missing analyst estimates by five cents. The company raised its full-year outlook for adjusted income from operations to at least $30.35 per share. David Cordani, in what he called a “somewhat bittersweet” moment as his final quarterly earnings call as CEO, described the results as reflecting “disciplined execution, deliberate portfolio shaping and a continued focus on targeted innovation.”

That jargon didn’t impress investors. Cigna’s stock price fell $3.19 on Thursday but was up 2.76% for the week, closing Friday at $282.90.

None of that is surprising. Cigna is a well-run company by the metrics Wall Street uses to measure well-run companies. What’s worth examining is what the numbers actually reveal about how the first quarter results were achieved and – equally if not more important – what Cigna announced alongside it.

Another big exit

The biggest news from Thursday’s release and call with analysts wasn’t about earnings. Cigna will stop offering plans on the Affordable Care Act marketplaces after the 2026 plan year. The exit will affect 369,000 members across 11 states, with coverage ending January 1, 2027.

Brian Evanko, who will succeed Cordani as CEO on July 1, framed the decision as a strategic choice to exit a market where Cigna is unlikely to achieve scale. “This is small business for us today, and it’s been shrinking in recent years,” he said.

He’s right about the numbers. What he didn’t say is why it’s shrinking — and what Cigna’s exit will do to the people left behind.

Cigna is by no means the first big insurer to announce an exit from the ACA Marketplace. Aetna pulled out at the end of 2025, forcing approximately 1 million members across 17 states to find new coverage for 2026. But even that headline understates the breadth of the retreat. At the end of 2025, when Congress chose not to renew some of the tax credits that had made ACA coverage affordable for millions of Americans, a wave of smaller insurers also left: Molina Healthcare announced significant changes to its service area; HAP CareSource exited Michigan; Chorus Community Health Plan withdrew; Mountain Health CO-OP left Wyoming; Primewell Health Services exited Arkansas and Mississippi; UM Health Plan and Michigan Care ended; and Celtic/WellCare left North Carolina. Blue Cross Blue Shield terminated PPO products in Arizona. And last month, Baylor Scott & White Health Plan announced it will no longer offer marketplace plans after the end of this year, affecting approximately 100,000 enrollees in Texas.

That means that before open enrollment for 2027 coverage even begins this fall, at least half a million people — Cigna’s 369,000 plus Baylor Scott & White’s 100,000, on top of the million who lost Aetna coverage last year — will either have to scramble to find comparable coverage (at a significantly higher price) or go uninsured.

And we may not yet know the full scope. Every spring and summer, health insurers file proposed premium rates with state regulators — filings that reveal what insurers are planning for the coming year. Those rate filings typically land in May and June. The Q2 earnings season follows in July and August. Each of those moments is an opportunity for another insurer to announce what Cigna announced Thursday. The exits we know about may be the beginning, not the end.

This is not a series of isolated corporate decisions. It is the beginning of a potential death spiral, and it is already in motion.

The mechanism is straightforward. ACA sign-ups for 2026 are already down by over 1 million people compared to the same period last year — the first decline since 2020. The main reason was the December 31, 2025 expiration of the enhanced premium tax credits that were enacted during the Biden administration. For subsidized enrollees who stayed in the same plan, average net premiums rose 114%. When premiums spike, the people who leave first are the healthy ones — younger, lower-utilization enrollees who do the math, decide the cost isn’t worth it and gamble that they’ll have another year of good health. The people who stay are the ones who have no choice: the chronically ill, the older, the people who know they will need care. The marketplace is already smaller and sicker, according to consultants and insurance executives, with more consumers choosing cheaper bronze plans that carry higher out-of-pocket costs.

A smaller, sicker pool means higher claims. Higher claims mean higher premiums. Higher premiums drive out even more healthy enrollees, which makes the pool sicker and more expensive still. And that is exactly what Evanko described when he noted that Cigna’s ACA enrollment had already dropped from 446,000 to 369,000 — a 17% decline in a single year.

The insurers aren’t abandoning a failed program. They are ensuring it fails — and then leaving before it does.

I wasn’t surprised to hear that Cigna is leaving the ACA Marketplace because it has never been a big player in the individual health insurance business. Around 90% of Cigna’s health plan enrollment is in its role as a third-party administrator (TPA) for large employers. The company also has sold all of its Medicare Advantage business.

What did surprise me was the company’s other big reveal: It has put its EviCore unit, which provides prior authorization and utilization management services to health plans (not just Cigna’s), up for sale. Evanko told analysts that the industry’s prior authorization standardization push (which I wrote about last Wednesday) could “open new doors for the EviCore business, which could potentially result in a partnership or a combination with complementary industry participants.”

EviCore is the prior authorization machinery — the infrastructure through which doctors’ requests for patient care get approved, delayed, or denied. Cigna is exploring selling it, or spinning it off, at precisely the moment that prior authorization is under the most intense public and regulatory scrutiny it has ever faced.

Think about what that means. Just days after the industry announced a voluntary reform campaign to standardize the prior authorization process, Cigna said it might sell the business unit that does the prior authorizing. That tells me that the company’s executives don’t think EviCore will be able to continue contributing to Cigna’s profits.

What the numbers say — and don’t

One of the most important numbers in any health insurer’s earnings report isn’t revenue. It’s the medical loss ratio — the percentage of premium dollars actually spent on patient care. The lower the MLR, the more the company keeps.

Cigna’s MLR for Q1 2026 was 79.8%, down from 82.2% a year ago. That 240-basis-point decline is the engine behind the strong earnings performance. For every dollar Cigna collected in premiums this quarter, it paid out roughly two cents less in medical claims than it did a year ago.

The company attributes the decline primarily to the 2025 sale of its Medicare Advantage business to Health Care Services Corporation — older, costlier populations leaving the risk pool.

What no analyst asked: Is the MLR decline connected to Cigna’s prior authorization practices? The company’s own Transparency Report, published in March, claims a 15% reduction in prior authorization volume. Did tighter scrutiny on the remaining high-cost requests contribute to lower medical costs and therefore a better MLR? We don’t know because Wall Street analysts chose not to ask.

Another thing analysts didn’t explore was litigation against its PBM, Express Scripts. Evernorth — the division that encompasses Express Scripts and that now accounts for 85% of Cigna’s revenue — generated $58.4 billion in adjusted revenues, driven by specialty drug volume and biosimilar adoption. What the earnings release doesn’t mention is that Express Scripts is currently the subject of federal RICO litigation alleging the company created a Swiss entity called Ascent Health Services to divert drug rebates away from plan sponsors and patients.

On Thursday’s call, analysts asked about Evernorth’s growth trajectory, capital deployment, the EviCore strategic review, and the CEO transition. No one asked what happens to the 369,000 people who will lose their Cigna coverage on January 1. No one asked whether the cascade of ACA exits constitutes a market failure requiring a policy response. No one asked what the prior authorization denial rate was for the quarter, or how many denials were later overturned on appeal.

Those questions have answers, but Wall Street analysts don’t ask because they assume most investors have little interest in such matters. And they are right.

New data shows middle-class Americans cutting essentials, dropping coverage, and delaying care — just as Pope Leo XIV calls health care a “moral imperative.”

Pope Leo XIV (who became pope a year ago this week) isn’t just the first American pontiff—he’s also, as a Chicago native and Villanova University alum, the first leader of the Roman Catholic Church to have experienced the U.S. health care system firsthand. So it shouldn’t come as a surprise that this world spiritual leader born as Robert Prevost would use his lofty new platform to call for radical change.

“Health cannot be a luxury for the few,” Leo told a recent conference on health care inequality in Europe organized by both Catholic bishops and the World Health Organization, adding that good health care is essential for social peace.

“Universal health coverage is not merely a technical goal to be achieved; it is primarily a moral imperative for societies that wish to call themselves just,” the pope said. “health care must be accessible to the most vulnerable, then, not only because their dignity requires it but also to prevent injustice from becoming a cause of conflict.”

In less than a year on the job, the new pontiff has shown a lot of political savvy, and a knack for good timing. Leo’s endorsement of health care as a human right coincided with a couple of new, important U.S. surveys showing that both rising insurance premiums and high out-of-pocket medical bills have become the major driver of an affordability crisis that is hitting middle-class families hard.

To back this up, the leading health care non-profit KFF conducted a followup survey with more than 800 Americans who last year had been enrolled in Affordable Care Act (ACA) insurance in 2025. It found broadly that most have been struggling to pay medical bills since Congress failed late last to extend the federal subsidies that had made ACA coverage affordable for many in recent years.

WATCH NOW

WATCH NOW: Prior Authorization: Care, Delayed | EP 3

In the third episode of the HEALTH CARE un-covered Show, we take a deep dive into prior authorization’s toll — from doctors to federal policy — featuring Dr. Wendy Dean, Dr. Seth Glickman and Rep. Suzan DelBene (D-WA) on CMS’s new AI-driven WISeR model.



Watch the full episode here.

Most of the respondents (80%) said they were paying more now for health care than in 2025, with just over half (51%) reporting they are now spending “a lot more.” For middle-class Americans, the critical need to stay healthy has meant cutting their budget for other essentials. KFF found that a majority (55%) were reducing spending on food or other household basics, but that jumped to 62% for people getting treatment for chronic disease.

Faced with drastically higher monthly premiums, KFF found, has forced these families to make difficult, consequential choices. Some 28% switched into a different ACA plan in an effort to hold down their monthly premiums – which means much higher deductibles and thus the risk of large out-of-pocket medical expenses. Even worse, some 9% told the KFF survey that they have dropped health insurance altogether, which means they are one accident or major illness away from a financial disaster.

A 34-year-old Texan who dropped his Obamacare coverage told the KFF pollsters that the sole reason was the cost. “The prices are simply too high,” he said. “$800 a month for the absolute cheapest plan for two people. Our income is $120k, so we don’t qualify for subsidies in Texas. I don’t think we could afford our mortgage if I had to pay for health insurance.”

Another respondent reported that his “Income exceeded the subsidy limit, forcing us to pay the full cost, so we switched down to a bronze from a gold plan. Even doing that our premiums are 3 times what they were in 2025, with lower plan features and a higher deductible.”

About 22% of the KFF respondents said they are still insured, but not through the ACA Marketplace. In some cases that is because they were able to switch to an employers’ health plan or because they were now eligible for Medicare and Medicaid. But others, KFF noted, switched into different types of high-deductible plans or a cost-sharing group – solutions that often lead to considerable out-of-pocket expenses.

One 56-year-old Texas man surveyed by KFF said that as a reaction to the higher insurance premiums he would “attempt to use health care as little as possible” – with the hope that by carefully consulting with his doctors and pharmacists he would avoid paying any out-of-pocket expenses that aren’t absolutely necessary.

Hospitals in just one state filed 1.15 million lawsuits — enabled by insurance plans that shift costs to patients while shielding themselves from the fallout.

“People are having to choose between going to the hospital and staying home and dying. Because at least my family won’t be burdened with a lawsuit if I die at home.”

That’s not a line from a dystopian novel. It’s what a real patient — identified only as GV0242002 in court records — told researchers after being sued by Sentara Health, Virginia’s largest hospital system and its most prolific medical debt litigant.

A major new report from researchers at George Washington University Law School and Stanford University’s Clinical Excellence Research Center, produced with PatientRightsAdvocate.org, documents what happens when American health care’s hidden costs finally catch up with the people least able to pay them. The findings for Virginia alone are staggering: between 2010 and 2024, hospitals and medical providers filed 1.15 million lawsuits against patients, seeking to collect $1.4 billion in medical debt. They followed those suits with more than 400,000 garnishment orders targeting wages and bank accounts. Plaintiffs’ attorneys collected $87 million in fees. Courts tacked on another $46 million in costs. And some providers charged interest as high as 18% annually — four times the prevailing commercial rate — buried in consent documents patients signed while frightened, in pain, and in no position to negotiate.

Among the top garnishee employers? Walmart, public schools, grocery stores and the hospitals themselves. Nonprofit hospitals in Virginia filed more than 4,100 garnishment orders against their own employees.

As the report notes, the hospitals’ patients have almost no way of knowing how much an inpatient stay or an outpatient service will cost or how much they will be on the hook for even if they are insured. The researchers describe health care providers operating “with insurers as accomplices” in keeping prices hidden from patients. That word — accomplices — is important and appropriate. This is not just a hospital story with an insurance footnote. It is also an insurance story. Both hospitals and insurers are complicit, although I would argue that hospitals have to operate in a system that is increasingly controlled by Big Insurance. That said, the relationship between hospitals and insurers is symbiotic, and the cost-sharing requirements imposed by insurers and the opacity of the agreements they enter into with hospitals enables both parties to increase prices and premiums in a way that ensures a rate of medical inflation that is perennially much higher than regular inflation and wage increases.

Here is the mechanism. An insurer designs a health plan with a $4,000 or $6,000 or $8,000 deductible. A patient — let’s say she works at a Kroger in Charlottesville, covered by her employer’s plan — gets sick and goes to Sentara Martha Jefferson Hospital. She signs an admissions agreement she cannot meaningfully read, consenting to pay “charges” based on a chargemaster that reflects prices no willing purchaser would ever agree to. She receives care. Weeks later, she gets a bill she cannot understand, for an amount she cannot verify, tied to prices that were never disclosed. She can’t pay. The hospital refers the account to one of the 20 law firms that brought more than half of all medical debt cases in Virginia during this period. She gets sued. The insurer that collected her premium — and her employer’s premium contribution — faces no lawsuit, no garnishment, no reputational consequence. It moves on to the next enrollment cycle.

The report covers 2010 through 2024 — the first 14 years of the Affordable Care Act. The ACA expanded coverage and has saved countless lives. But it did not stop the proliferation of high-deductible health plans that left millions of newly insured Americans technically covered and financially exposed. In fact, the ACA legitimized them. Since 2000, employer-sponsored family health insurance premiums have risen 321%, according to data cited in the report, and deductibles and other out-of-pocket costs have also skyrocketed. Wages rose 123% over the same period.

Patients are not drowning in medical debt because they are irresponsible. They are drowning because the insurance industry spent years engineering products that shift financial risk onto health plan enrollees and then collecting ever-increasing premiums for doing so.

I should note one finding with particular resonance for me personally. Ballad Health — the dominant hospital system serving the Tri-Cities of Northeast Tennessee and Southwest Virginia, the region where I grew up — filed 26,300 lawsuits against patients during this period. Ballad was created through a controversial 2018 merger that was granted antitrust immunity under a rare state certificate of public advantage, in exchange for commitments to maintain services and community benefit. The merger eliminated competition across one of the poorest stretches of Appalachia, leaving patients in communities like Scott County, Lee County, and Wise County, Virginia — some of the most economically distressed in either state — with effectively no choice in where they seek care.

Whether Ballad has honored its merger commitments has been disputed ever since. What is no longer in dispute: The system that was handed a regional monopoly turned around and sued its captive patients tens of thousands of times. Wise County, for those who don’t know, is also where Remote Area Medical for years set up a makeshift clinic at the county fairgrounds — the place that first showed me, up close, what this industry does to people when it stops pretending.

Virginia’s legislature took a meaningful step last year to give patients some relief. Former Governor Glenn Youngkin signed the Medical Debt Protection Act last May, capping interest on medical debt at 3%, eliminating interest for the first 90 days, and barring hospitals from foreclosing on homes or placing property liens. Those are real protections, and they matter. But as the researchers note, the law does almost nothing about the hidden prices and opaque billing at the point of care that generate the debt in the first place. The legislature addressed the collection machinery. It did not touch the engine driving it.

That engine — high cost-sharing, hidden prices, insurer-designed benefit structures that make patients financially liable before they walk through the door — is what I’ll be examining in depth in the coming weeks, as the major insurers report their first-quarter 2026 earnings. The Virginia data describe how this system costs patients. The earnings reports will tell you how it benefits big insurers and their shareholders.

Stay with me.