Biden's crackdown on monopolies gave a pass to health insurers when they should have been the focus.

There were no health insurers on the Fortune Top 10 list in 2008. In 2021, there are 2.

President Biden has gotten a lot of mostly good press for his latest executive order, which, among other things, calls for more scrutiny of hospital mergers and acquisitions and efforts to lower the cost of prescription drugs and hearing aids. That’s worthy, but notably missing from the news coverage was whether health insurers, which have consolidated at a rapid pace since the Affordable Care Act was passed, will be subject to the same level of scrutiny. 

My former colleagues in the insurance business undoubtedly breathed a sigh of relief after seeing the brief mention of health insurance in the July 9 White House fact sheet about Biden’s executive order. While it noted that “consolidation in the health insurance industry has meant that many consumers have little choice when it comes to selecting insurers,” the only remedy Biden apparently is considering is having the Department of Health and Human Services “standardize plan options in the National Health Insurance (Obamacare) Marketplace so people can comparison shop more easily.”

That’s not even in the category of a slap on the wrist when you consider that it would benefit only the small sliver of the American population that buys coverage through the Obamacare “marketplace.” And most of the big insurance companies don’t even sell policies in that marketplace.

Once again, it seems, Washington is giving health insurers another free pass. Insurance industry lobbyists clearly have done an exceptionally good job of convincing Biden and lawmakers that the companies they represent are blameless and innocent bystanders when it comes to rising medical costs. Either that or the fact that Washington has allowed health insurers to grow too big and powerful to take on.

I know how well-oiled the industry’s propaganda machinery is because I used to be a part of it. The industry’s underlying strategy has always been to point the finger of blame for uncontrolled medical inflation at hospitals, drug companies, physicians and other healthcare providers. The ongoing “it’s them, not us” campaign has worked almost flawlessly to deflect scrutiny of insurance industry business practices, consolidation, and profiteering.

Consolidation among health insurers is a much bigger problem than policymakers and regulators are willing to acknowledge. They seemingly have turned a blind eye to what has happened over the past few years to the health insurance landscape, especially since the Affordable Care Act was passed.

The two companies I worked for over two decades–Humana and Cigna–are massively bigger than they were when I left the industry, and they and all the other big insurers are demanding–and getting–far more money from our (and our employers’) bank accounts than they were back then. 

Consider this: Cigna ranked #141 on the Fortune 500 list of American companies when I quit after a crisis of conscience in 2008. Thanks to mergers and acquisitions–most notably it’s 2018 acquisition of Express Scripts–Cigna is now #13 and knocking on the door of the top 10.

Humana, where I worked before Cigna, ranked #98 in 2008. It is now #41. 

Centene hadn’t even cracked the top 500 in 2008. It premiered at #486 in 2010 soon after the ACA became law. This year, thanks to big acquisitions, Centene landed at #24.

Those three companies’ leaps up the Fortune ladder are impressive but arguably not as stunning as what Aetna and UnitedHealth have been able to pull off.

In 2008, Aetna was way back at #85. But thanks to its 2018 merger with CVS, it is now the 4th biggest company in America. And UnitedHealth, which was #25 in 2008, is right behind it at #5.

In 2008, there were no insurers or health care companies of any kind in the Fortune 500. Now there are four, with CVS/Aetna at #4, UnitedHealth at #5, and drug wholesalers/distributors McKesson and Amerisource Bergen at #7 and #8.

Only Walmart, Amazon and Apple are bigger than those two companies. And at the rate for-profit insurers are gobbling up not only competitors but also clinics, physician practices and other providers, it is only a matter of time before the biggest companies in America are health insurers–companies that can’t even do business in most of the rest of the world. 

Those insurers are now far bigger than any hospital system. No hospital company is anywhere close in size to the big insurers. HCA Healthcare, the largest for-profit hospital company, ranks #62 on the current Fortune 500. The next biggest, Tenet, is #167.

And it can be argued that the consolidation among hospitals at the local and regional level is a response and reaction to the rapid consolidation among insurers. Size matters at the negotiating table where representatives of insurers and hospitals meet to hash out how much insurers will pay the hospitals for treating people enrolled in their health plans. The more market share insurers have in a given market, the more they can pressure hospitals to cut them a good deal. Conversely, the bigger and more essential a hospital system is in a given market, the more clout it has at that negotiating table. What has happened, in essence, is a kind of government-sanctioned arms race in which the biggest losers are the American people and our job creators. It’s why Warren Buffett calls the U.S. healthcare system a “tapeworm in the American economy.”

The ugly secret is that both insurers and hospitals benefit financially as health care prices go up, which is why the arms race goes on and the status quo goes untouched. As prices rise, insurers might have to pay hospitals more for treating their health plan enrollees, but in the absence of a public option that Biden used to talk about so much, insurers are able to demand higher premiums from their customers to more than compensate for increases in hospital prices. There is scant evidence that any savings they can get from negotiating better deals with hospitals is passed on to consumers.

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The insurance industry’s finger pointing goes hand-in-hand with its deceptive talking point that the current system of health insurance provides consumers with “choice and competition,” which, insurers claim, works to keep health care prices in check. 

But the truth is that competition among health insurers actually adds costs to our system. While the total number of health insurance companies operating in the United States has been diminishing for years as a result of industry consolidation, all the remaining insurers sell dozens if not hundreds of different health insurance plans, all with their own discrete benefits, coverage limitations, out-of-pocket obligations, provider networks, prior authorization requirements, formularies and many other restrictions and barriers insurers have erected to make it more difficult for Americans to get the care they need and can afford. The result is a bewildering, maddening complexity that adds billions of dollars to what we as a nation spend on care because of the high administrative costs it necessitates, and it’s money that does nothing to get us well or keep us from getting sick in the first place. 

And the idea that we Americans even have real choice of health insurance is a myth. If you get coverage through the Obamacare marketplace, you likely find that only a small handful of insurance companies are available to you. And if you get your coverage through your employer, it is your employer, not you, that decides who your insurance company will be. Most insurance companies and their multitude of health plans, consequently, are completely off limits to us. They might as well not exist. 

The American Medical Association has been doing important work over the past two decades exposing the myth of choice and competition among commercial health insurers. Every year the AMA studies health insurance market concentration and reports on changes that have taken place over previous years in all 384 of the country’s metropolitan statistical areas. 

In its most recent report, published last October, the AMA found that, “Competition and choice continue to fade away for many patients as most highly concentrated markets for commercial health insurance have grown even more concentrated than they were five years ago.” 

In responding to Biden’s executive order, the American Hospital Association noted that the five biggest health insurers control almost 50% of the market. “Studies have found that when an insurance market is highly concentrated, insurers reduce provider payments and do not pass savings along to the consumer,” the AHA said in a statement.

So, President Biden and members of Congress, it is important but not nearly enough to hold hospitals and drug companies more accountable and make hearing aids more affordable. If you give health insurers another pass, the American people will have every good reason to vote for somebody else next election day. It is long past time for Congress, the White House–and the Federal Trade Commission–to take a serious look at what the health insurance industry has been up to while lawmakers were looking only where insurers’ fingers have been pointing.