Healthcare costs are crushing Americans. The average premium for an employer-sponsored family health plan now exceeds $26,000 a year — and families are then still on the hook for ever-higher deductibles and out-of- pocket bills. Nearly four in 10 Americans have delayed or skipped care because they couldn’t afford it.
When I served in Congress in the 1990s, I heard a familiar refrain from union members, retirees and working families: They had coverage on paper, but when they needed care, they felt stuck fighting a system designed to wear them down. Back then, many Americans remembered a health system where the roles were clearer: Doctors made medical decisions, pharmacies filled prescriptions, hospitals delivered care and insurers paid claims.
That system was never perfect — yet compared to today, it seems almost utopian. A handful of companies now control nearly every aspect of healthcare. They are increasingly denying claims, delaying critical patient care, and forcing providers and patients into a costly and time-consuming appeals process simply to generate profit.
That’s why it’s time for my fellow Democrats to dispense with half-measures — and simply break up the big insurers that have a stranglehold over the entire healthcare sector.
Historically, insurance companies focused on managing risk and negotiating with providers to bring down the cost of care.
But today’s largest insurance companies have a different focus. They own doctor groups. They own clinics. They own pharmacies and pharmacy benefit managers. In short, they own a piece of every level of the healthcare system. And then they steer patients through that system in ways that maximize their profits.
UnitedHealth Group, for example, rakes in billions moving patients back and forth between its 2,700 subsidiaries. Its insurance arm funnels about 50 million Americans toward the 90,000 physicians it employs or controls, who, in turn, refer patients to UnitedHealth-owned clinics and facilities. Its pharmacy benefit manager directs patients to affiliated pharmacies that mark up the price of treatments.
Most of the other big healthcare conglomerates have adopted that same business model. And they’ve proven deviously smart at evading regulations and legislation meant to curb their profiteering.
For instance, when Democrats passed the Affordable Care Act, they required insurers to spend at least 85% of premium dollars on actual medical care.
But the industry adapted — by essentially buying up providers and then paying out the required funds to their own subsidiaries. By shifting money through the web of companies they now own — insurers, doctors’ offices, pharmacies and clinics — the big conglomerates can artificially inflate profits in one subsidiary, artificially minimize them in another and make it look like they’re spending money on care, when in reality they’re maximizing their profits, minimizing their tax liability and bilking patients.
It’d be virtually impossible to carefully untangle this web of self-dealing. So Democrats ought to simply cut through this Gordian knot of healthcare policy.
Sen. Elizabeth Warren, D-Mass., recently introduced legislation to do that. The Break Up Big Medicine Act would prohibit the same company from owning the insurance plan, the pharmacy benefit manager middleman, and the doctors or clinics that provide care.
Frustration with health insurers is one of the few issues that truly cuts across party lines. Nearly seven in 10 Americans say these companies have too much influence over our health system.
Breaking them up would be a winning platform for the midterms — one that sharply contrasts with President Trump’s rightly mocked, still undefined “concepts” of a healthcare plan. And it’d actually deliver lower prices.