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Don't Worry, Wall Street Journal—Health Insurers Are Profitable!
| From | FAIR <[email protected]> |
| Subject | Don't Worry, Wall Street Journal—Health Insurers Are Profitable! |
| Date | October 31, 2025 10:13 PM |
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FAIR
View article on FAIR's website ([link removed])
Don't Worry, Wall Street Journal—Health Insurers Are Profitable! John Canham-Clyne ([link removed])
On October 21, Elevance Health (the rebrand of for-profit health insurer Anthem) announced ([link removed]) its third quarter results. Operating revenue went up 12% from the same three-month period last year, and profits as measured by normal accounting rules rose 17%. UnitedHealth Group, the nation’s largest insurer, went one better, raising ([link removed]) its expectations for how much profit it will make this year, as it eased Wall Street’s worries by increasing the premiums it will charge for coverage in 2026.
Please let the anxious folks at the Wall Street Journal know. They’ve been so worried.
Over the past year, older Americans, low-income people who enroll in private Medicare and Medicaid insurance plans, and people covered by health insurance purchased from the Affordable Care Act exchanges have been doing something that private insurance companies and their Wall Street investors find disturbing: They’re actually going to the doctor and getting the healthcare they need.
The public’s desire to get medical treatment that they’ve already paid insurance companies for triggered a Wall Street meltdown earlier this year, with stock prices dropping sharply as investment analysts and business journalists fretted that private looting of the healthcare system might end.
** Insurers in 'rough shape'
------------------------------------------------------------
AP: UnitedHealth tops profit forecasts but medical costs linger for healthcare giant
The problem with being a "healthcare giant" is those lingering "medical costs" (AP, 1/16/25 ([link removed]) ).
In January, the Associated Press (1/16/25 ([link removed]) ) reported that insurer "UnitedHealth posted a better-than-expected profit in the final quarter of 2024, but a nagging rise in medical costs and care utilization surprised Wall Street." The article noted that this "nagging rise" meant the company's revenue only "climbed about 7% to $100.8 billion, which missed expectations." This report came under a headline announcing, with no apparent sense of its own absurdity, that "Medical Costs Linger" for the company whose business it is to pay for people's medical costs.
In February, Healthcare Dive (2/25/25 ([link removed]) ) said health insurers had “wrapped up 2024 in rough shape, recording falling profits from insurance businesses and releasing guidance suggesting that medical costs could continue climbing this year.” What reporter Rebecca Pifer meant by “rising medical costs” was a decline in the portion of every dollar in premiums that insurers skim off the top.
According to Pifer, “major publicly traded insurers’ medical loss ratios”—a standard euphemism for what insurers spend on actual healthcare—“rose an average of 2.8 percentage points from the fourth quarter of 2023 to the fourth quarter of 2024." The skim taken off the top of premium dollars by the top seven health insurers declined from 12.1% to 9.3%, a “massive change,” according to Pifer, because “even one-tenth of a percentage point can translate to significant changes in the profits companies rake in from offering insurance.”
In April, UnitedHealth announced ([link removed]) that it had discovered “heightened care activity” by people enrolled in its Medicare Advantage plans, and “changes in the profile” of patients treated by the company’s physician practice and pharmaceutical insurance subsidiary Optum. English translation: Our members are sicker than we thought, and getting more healthcare than we expected. United changed its “guidance” from anticipating profits of roughly $26 billion over the full year 2025 to just under $23 billion.
Over the next three months, Fortune 500 insurers Centene (7/1/25 ([link removed]) ), Molina (7/7/25 ([link removed]) ) and Elevance (7/17/25 ([link removed]) ) reduced their profit predictions for 2025 based on their second-quarter (April–June) financial results. Each company said the skim was declining.
** Panic over 'medical costs'
------------------------------------------------------------
NYT: UnitedHealth’s Profits Fall as Costs of Care Continue to Rise
New York Times (7/29/25 ([link removed]) ): "UnitedHealth’s stumbles...shocked many of its investors who have come to rely on steady increases of profits from the conglomerate."
Wall Street panicked. In June, Fitch Ratings (6/17/25 ([link removed]) ), one of the three major US credit ratings agencies, downgraded its evaluation of the health insurance industry from “neutral” to “deteriorating.”
The panic-stricken Wall Street mood helped frame media reporting of the industry’s finances. In late July, United announced that its April–June profits fell from $7.9 billion in 2024 to a paltry $5.2 billion, an apparent catastrophe that led investors to drive the price of company stock down 22% ([link removed]) in 24 hours. The New York Times (7/29/25 ([link removed]) ) reported that United’s profits “fell sharply,” amid “rising medical costs and disappointing profits” across the industry, noting that Centene also blamed “rising expenses for poor financial results.”
As I reported in my newsletter Healing and Stealing (6/3/25 ([link removed]) , 7/16/25 ([link removed]) ,7/23/25 ([link removed]) ), even though profits were down over 2024, not a single company said they would actually lose money, just that they expected their profits to be less for the year than they had predicted in January. For example, Elevance saw its stock drop 20% in two days when it announced that it only expected to earn $5.4 billion instead of $6.4 billion for 2025.
** Public insurance more efficient
------------------------------------------------------------
Healthcare Dive: Insurers closed out 2024 on shaky footing
Healthcare Dive (2/25/25 ([link removed]) ): "Major Medicare insurers said they’ve successfully lost members that were dragging down their margins." (In other words, they've managed to get sick people to leave their plans.)
No matter how much their skim shrinks, private insurers can’t compete with Medicare for efficiency. Healthcare Dive’s reporting on the dire state of companies’ 2024 “medical loss ratios” in February included a chart showing that all but two of the major insurers were still skimming between 8% and 13% of every premium dollar in the fourth quarter of the year.
CVS, the drugstore chain that also owns Aetna, had the lowest skim in the fourth quarter last year, but at 5.2% still spent more than five times the 1.1% that Medicare did in overhead—the amount it takes from customers’ premiums to spend on things other than actual medical care (Medicare Trustees Report, Table II.B1, 2024 ([link removed]) ).
The dynamic between healthcare media and their Wall Street analyst sources keeps readers focused on the insurance companies’ need to not spend the money they collect in premiums, rather than paying for what their customers think they paid for.
In AP's January report on United's woes, the outlet reported:
In the recently concluded fourth quarter, more than 87% of the premiums UnitedHealth collected went back out the door to cover medical costs. That was "well above" what analysts expected, TD Cowen analyst Ryan Langston said in a research note.
The fact that Medicare manages to direct 99% of its premiums (in the form of taxes) to paying doctors, hospitals, labs, therapists, drug companies, technicians, aides and the insurers themselves was absent from the story, as it nearly invariably is. Missing, too, was how the privatization of Medicare has loaded up the program with unnecessary bureaucracy: When Medicare pays private insurers instead of covering people directly, the companies skim their 10%+ off the top, money that Medicare spends on patient care when they cover people directly.
** Insurers’ deadly tools
------------------------------------------------------------
Modern Healthcare: What Aetna quitting the exchanges says about the exchanges
Modern Healthcare (5/2/25 ([link removed]) )
The most important missing context of profit panic coverage is the fact that private insurers have plenty of market-based tools to return to profitability, and there’s no evidence that governments at any level will rein them in. Even as media hyped the impact on insurance profits of people getting healthcare, companies were quitting “markets” they didn’t like and jacking up premium prices, while fending off regulation of, and lawsuits against, their most powerful tools: denying payment for needed coverage and defrauding the government.
CVS/Aetna decided to get out of the Affordable Care Act exchanges because, as Modern Healthcare (5/2/25 ([link removed]) ) explained, their “medical losses” on those policies had grown to 96% in states where they offered ACA plans, reducing the skim in that business line to 4%. Insurers get to pick and choose whether to keep selling plans in the various “markets” for ACA coverage and privatized Medicare Advantage plans without heed to the impact on patients, who are forced to switch plans and, often, providers.
Faced with somewhat lower profits, most insurers have simply raised prices through the roof. Recent coverage of Affordable Care Act premiums has focused on the impact of the potential end of the premium subsidies at the heart of the government shutdown, but large increases were already on the way. Last July, Centene told ([link removed]) investors and reporters that it had already withdrawn its initial ACA rate proposals for 2026 and was preparing to submit new, even higher proposed rates in response to people getting healthcare.
Reuters: UnitedHealth raises 2025 profit forecast, expects 2026 pressure on Medicaid business
UnitedHeatlh CEO Stephen Helmsley promises higher prices and more claim rejection (Reuters, 10/28/25 ([link removed]) ).
Beyond the government programs, Wall Street consultant Mercer’s annual employer surveys (9/3/25 ([link removed]) ) predict an average 6.5% premium increase, “the highest increase since 2010.” In the business context, reporters report those increases with a straight face, or even applaud them.
In its story on United’s recent upbeat profit projections, Reuters (10/28/25 ([link removed]) ) quoted CEO Stephen Helmsley, "I am confident we will return to solid earnings growth next year given the operational rigor and more prudent pricing." “Operational rigor” means avoiding sick patients and denying claims, while United’s pricing is only "prudent" for its investors.
For context, Reuters quoted a stock analyst and a healthcare stock portfolio manager, who were quite pleased with the company’s “prudent” pricing. "Overall, the results, the EPS guidance increase and management commentary were all highly encouraging," Daniel Barasa of investment firm Gabelli Funds told the news agency.
Meanwhile, private health insurers also generate profits by denying care. Seventeen percent of all Medicare Advantage claims are denied initially, with 8% ultimately denied (Health Affairs, 6/25 ([link removed]) ). The Reuters story clearly illustrates the dynamic between business coverage of healthcare and sources who demand wealth extraction.
During the panic, the Lever (6/6/25 ([link removed]) ) made this point in a story headlined “Wall Street to Insurers: Keep Denying Care.” Reporter Katya Schwenk pointed out how beyond price increases, Wall Street’s preferred solution to "lingering" healthcare costs is to use bureaucracy to deny healthcare, and placed the profit panic in the context of five years of high profits.
** Outright fraud
------------------------------------------------------------
Outright fraud can also help boost profits. The irony in the entire Wall Street panic over sicker people enrolling in health plans is that health insurance companies have been under investigation for fraudulently claiming that patients are sicker than they are for years.
In September 2023, the Cigna Group settled three whistleblower lawsuits ([link removed]) with the Justice Department for $172 million alleging that the company had sought higher reimbursements by adding diagnoses to patients’ records to boost their “risk scores,” which determine some forms of Medicare Advantage payments. The HHS inspector general concluded ([link removed]) last year that these company-generated diagnoses resulted in $7.5 billion in payments to health plans as part of risk-based reimbursement.
On the one hand, the insurance industry can make money by claiming that patients are sicker than they really are, but whistleblowers also allege that the industry illegally tries to avoid patients who are likely to actually need treatment. In May, the Justice Department filed ([link removed]) False Claims Act lawsuits against CVS/Aetna, Elevance and Humana, alleging they had paid hundreds of millions of dollars in kickbacks to brokers to steer patients into their plans. Aetna and Humana were also accused of having the brokers limit the number of disabled people steered to them. The federal government’s action was spurred by private lawsuits from industry whistleblowers; the allegations haven’t been decided in court.
** Absolving insurers
------------------------------------------------------------
NYT: UnitedHealth Grew to Be a Leviathan. Then Came the Backlash.
The New York Times (7/28/25 ([link removed]) ) tells the health insurance story from the point of view of the "leviathan."
Media outlets cover fraud and claims denials episodically, but reporters and editors sometimes frame stories in a way that absolves the actors of responsibility. The day before her New York Times story on United’s falling profits, reporter Reed Abelson (7/28/25 ([link removed]) ) wrote a detailed recap of UnitedHealth Group’s recent business history for the paper. Abelson used the passive voice to turn United from an accused agent of fraud and a failed custodian of patient data into a passive victim of “misfortunes” that mysteriously befell the company:
UnitedHealth Group emerged as a healthcare colossus over the past decade and a half, earning one of the highest stock market values in the nation. But in the last two years, it has been hit with just about every misfortune that can befall a company:
A gargantuan cyberattack. Federal investigations, including a criminal inquiry into one of its most important businesses. The killing of a top executive. A public relations crisis. Disappointing profits. A plummeting stock price.
The framing focuses attention on the misfortunes of United rather than on the problems of the patients who are denied care, or whose data was compromised in the massive ransomware attack on United’s Change Healthcare subsidiary. Nor did it highlight the providers who spend hours fighting for approval and payment from United bureaucrats—payments that, when approved, were delayed by the cyberattack.
Insurance companies wield all the industry’s profit-earning business tools actively. What they don’t do is address the core cost problems in US healthcare—extreme prices for hospital care, physician visits and prescription drugs (Healthcare Cost Institute,1/14/25 ([link removed]) ), and metastatic private bureaucracy that consumes more than a third of US healthcare spending (Annals of Internal Medicine, 1/21/20 ([link removed]) ). Those systemic cost drivers tend to be absent when journalists focus on corporate financial results.
** Peak Panic at WSJ
------------------------------------------------------------
WSJ: Health Insurers Are Becoming Chronically Uninvestable
The Wall Street Journal (7/10/25 ([link removed]) ) calls health insurers one of the worst names it can think of: "uninvestable."
With these tools at their disposal, the health insurance industry is hardly in trouble as a long-term investment. As the panic built between April and June, legendary long-term investor Warren Buffett's Berkshire Hathaway quietly purchased ([link removed]) 5 million shares of UnitedHealth Group stock, worth more than $5 billion.Yet the Wall Street Journal (7/10/25 ([link removed]) ) still sounded an alarm, slapping a headline declaring that "Health Insurers Are Becoming Chronically Uninvestable” on a column by David Wainer.
Perhaps unwittingly, Wainer’s piece summarized the core problem with entrusting access to healthcare to investor-based insurance. Investors not only expect health insurers to generate profits, but to produce ever-increasing profits and stock prices.
For many years, he wrote, health insurance stocks offered “steady, dependable returns, fueled by the expansion of government programs such as Medicare, Medicaid and the Obamacare exchanges.” Recently, though, “Wall Street has a problem with America’s health insurers: They keep missing their numbers.“ It's not that insurers are losing money, but that investors can’t expect constantly rising profits and, by extension, stock prices.
Indeed, the numbers that insurers were “missing” earlier this year are expectations set by predictions from the companies themselves. Profits alone aren’t enough for the hamster-wheel mindset on Wall Street:
With 2024 and 2025 already looking bad, 2026 is unlikely to be much better, as many insurers look to retrench. UnitedHealth might not grow earnings over its 2024 levels until 2027, according to analyst estimates on FactSet. Humana might not return to its 2023 profit peak until 2028.
The Wall Street Journal has done some outstanding healthcare reporting, as have other media organs. A year before Wainer’s meltdown, three Journal reporters (7/8/24 ([link removed]) ) analyzed billions of Medicare claims for the year 2018 through 2021 and uncovered $50 billion in payments to various insurers based on diagnoses added to patient records by the insurers themselves, like those in the lawsuit settled by Cigna.
But in coverage of the business of health insurance, the Journal, like too many other media outlets, normalizes the idea that health insurers should be expected to constantly extract more and more wealth from patients.
------------------------------------------------------------
Disclosure: FAIR buys health insurance through Elevance.
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FAIR
View article on FAIR's website ([link removed])
Don't Worry, Wall Street Journal—Health Insurers Are Profitable! John Canham-Clyne ([link removed])
On October 21, Elevance Health (the rebrand of for-profit health insurer Anthem) announced ([link removed]) its third quarter results. Operating revenue went up 12% from the same three-month period last year, and profits as measured by normal accounting rules rose 17%. UnitedHealth Group, the nation’s largest insurer, went one better, raising ([link removed]) its expectations for how much profit it will make this year, as it eased Wall Street’s worries by increasing the premiums it will charge for coverage in 2026.
Please let the anxious folks at the Wall Street Journal know. They’ve been so worried.
Over the past year, older Americans, low-income people who enroll in private Medicare and Medicaid insurance plans, and people covered by health insurance purchased from the Affordable Care Act exchanges have been doing something that private insurance companies and their Wall Street investors find disturbing: They’re actually going to the doctor and getting the healthcare they need.
The public’s desire to get medical treatment that they’ve already paid insurance companies for triggered a Wall Street meltdown earlier this year, with stock prices dropping sharply as investment analysts and business journalists fretted that private looting of the healthcare system might end.
** Insurers in 'rough shape'
------------------------------------------------------------
AP: UnitedHealth tops profit forecasts but medical costs linger for healthcare giant
The problem with being a "healthcare giant" is those lingering "medical costs" (AP, 1/16/25 ([link removed]) ).
In January, the Associated Press (1/16/25 ([link removed]) ) reported that insurer "UnitedHealth posted a better-than-expected profit in the final quarter of 2024, but a nagging rise in medical costs and care utilization surprised Wall Street." The article noted that this "nagging rise" meant the company's revenue only "climbed about 7% to $100.8 billion, which missed expectations." This report came under a headline announcing, with no apparent sense of its own absurdity, that "Medical Costs Linger" for the company whose business it is to pay for people's medical costs.
In February, Healthcare Dive (2/25/25 ([link removed]) ) said health insurers had “wrapped up 2024 in rough shape, recording falling profits from insurance businesses and releasing guidance suggesting that medical costs could continue climbing this year.” What reporter Rebecca Pifer meant by “rising medical costs” was a decline in the portion of every dollar in premiums that insurers skim off the top.
According to Pifer, “major publicly traded insurers’ medical loss ratios”—a standard euphemism for what insurers spend on actual healthcare—“rose an average of 2.8 percentage points from the fourth quarter of 2023 to the fourth quarter of 2024." The skim taken off the top of premium dollars by the top seven health insurers declined from 12.1% to 9.3%, a “massive change,” according to Pifer, because “even one-tenth of a percentage point can translate to significant changes in the profits companies rake in from offering insurance.”
In April, UnitedHealth announced ([link removed]) that it had discovered “heightened care activity” by people enrolled in its Medicare Advantage plans, and “changes in the profile” of patients treated by the company’s physician practice and pharmaceutical insurance subsidiary Optum. English translation: Our members are sicker than we thought, and getting more healthcare than we expected. United changed its “guidance” from anticipating profits of roughly $26 billion over the full year 2025 to just under $23 billion.
Over the next three months, Fortune 500 insurers Centene (7/1/25 ([link removed]) ), Molina (7/7/25 ([link removed]) ) and Elevance (7/17/25 ([link removed]) ) reduced their profit predictions for 2025 based on their second-quarter (April–June) financial results. Each company said the skim was declining.
** Panic over 'medical costs'
------------------------------------------------------------
NYT: UnitedHealth’s Profits Fall as Costs of Care Continue to Rise
New York Times (7/29/25 ([link removed]) ): "UnitedHealth’s stumbles...shocked many of its investors who have come to rely on steady increases of profits from the conglomerate."
Wall Street panicked. In June, Fitch Ratings (6/17/25 ([link removed]) ), one of the three major US credit ratings agencies, downgraded its evaluation of the health insurance industry from “neutral” to “deteriorating.”
The panic-stricken Wall Street mood helped frame media reporting of the industry’s finances. In late July, United announced that its April–June profits fell from $7.9 billion in 2024 to a paltry $5.2 billion, an apparent catastrophe that led investors to drive the price of company stock down 22% ([link removed]) in 24 hours. The New York Times (7/29/25 ([link removed]) ) reported that United’s profits “fell sharply,” amid “rising medical costs and disappointing profits” across the industry, noting that Centene also blamed “rising expenses for poor financial results.”
As I reported in my newsletter Healing and Stealing (6/3/25 ([link removed]) , 7/16/25 ([link removed]) ,7/23/25 ([link removed]) ), even though profits were down over 2024, not a single company said they would actually lose money, just that they expected their profits to be less for the year than they had predicted in January. For example, Elevance saw its stock drop 20% in two days when it announced that it only expected to earn $5.4 billion instead of $6.4 billion for 2025.
** Public insurance more efficient
------------------------------------------------------------
Healthcare Dive: Insurers closed out 2024 on shaky footing
Healthcare Dive (2/25/25 ([link removed]) ): "Major Medicare insurers said they’ve successfully lost members that were dragging down their margins." (In other words, they've managed to get sick people to leave their plans.)
No matter how much their skim shrinks, private insurers can’t compete with Medicare for efficiency. Healthcare Dive’s reporting on the dire state of companies’ 2024 “medical loss ratios” in February included a chart showing that all but two of the major insurers were still skimming between 8% and 13% of every premium dollar in the fourth quarter of the year.
CVS, the drugstore chain that also owns Aetna, had the lowest skim in the fourth quarter last year, but at 5.2% still spent more than five times the 1.1% that Medicare did in overhead—the amount it takes from customers’ premiums to spend on things other than actual medical care (Medicare Trustees Report, Table II.B1, 2024 ([link removed]) ).
The dynamic between healthcare media and their Wall Street analyst sources keeps readers focused on the insurance companies’ need to not spend the money they collect in premiums, rather than paying for what their customers think they paid for.
In AP's January report on United's woes, the outlet reported:
In the recently concluded fourth quarter, more than 87% of the premiums UnitedHealth collected went back out the door to cover medical costs. That was "well above" what analysts expected, TD Cowen analyst Ryan Langston said in a research note.
The fact that Medicare manages to direct 99% of its premiums (in the form of taxes) to paying doctors, hospitals, labs, therapists, drug companies, technicians, aides and the insurers themselves was absent from the story, as it nearly invariably is. Missing, too, was how the privatization of Medicare has loaded up the program with unnecessary bureaucracy: When Medicare pays private insurers instead of covering people directly, the companies skim their 10%+ off the top, money that Medicare spends on patient care when they cover people directly.
** Insurers’ deadly tools
------------------------------------------------------------
Modern Healthcare: What Aetna quitting the exchanges says about the exchanges
Modern Healthcare (5/2/25 ([link removed]) )
The most important missing context of profit panic coverage is the fact that private insurers have plenty of market-based tools to return to profitability, and there’s no evidence that governments at any level will rein them in. Even as media hyped the impact on insurance profits of people getting healthcare, companies were quitting “markets” they didn’t like and jacking up premium prices, while fending off regulation of, and lawsuits against, their most powerful tools: denying payment for needed coverage and defrauding the government.
CVS/Aetna decided to get out of the Affordable Care Act exchanges because, as Modern Healthcare (5/2/25 ([link removed]) ) explained, their “medical losses” on those policies had grown to 96% in states where they offered ACA plans, reducing the skim in that business line to 4%. Insurers get to pick and choose whether to keep selling plans in the various “markets” for ACA coverage and privatized Medicare Advantage plans without heed to the impact on patients, who are forced to switch plans and, often, providers.
Faced with somewhat lower profits, most insurers have simply raised prices through the roof. Recent coverage of Affordable Care Act premiums has focused on the impact of the potential end of the premium subsidies at the heart of the government shutdown, but large increases were already on the way. Last July, Centene told ([link removed]) investors and reporters that it had already withdrawn its initial ACA rate proposals for 2026 and was preparing to submit new, even higher proposed rates in response to people getting healthcare.
Reuters: UnitedHealth raises 2025 profit forecast, expects 2026 pressure on Medicaid business
UnitedHeatlh CEO Stephen Helmsley promises higher prices and more claim rejection (Reuters, 10/28/25 ([link removed]) ).
Beyond the government programs, Wall Street consultant Mercer’s annual employer surveys (9/3/25 ([link removed]) ) predict an average 6.5% premium increase, “the highest increase since 2010.” In the business context, reporters report those increases with a straight face, or even applaud them.
In its story on United’s recent upbeat profit projections, Reuters (10/28/25 ([link removed]) ) quoted CEO Stephen Helmsley, "I am confident we will return to solid earnings growth next year given the operational rigor and more prudent pricing." “Operational rigor” means avoiding sick patients and denying claims, while United’s pricing is only "prudent" for its investors.
For context, Reuters quoted a stock analyst and a healthcare stock portfolio manager, who were quite pleased with the company’s “prudent” pricing. "Overall, the results, the EPS guidance increase and management commentary were all highly encouraging," Daniel Barasa of investment firm Gabelli Funds told the news agency.
Meanwhile, private health insurers also generate profits by denying care. Seventeen percent of all Medicare Advantage claims are denied initially, with 8% ultimately denied (Health Affairs, 6/25 ([link removed]) ). The Reuters story clearly illustrates the dynamic between business coverage of healthcare and sources who demand wealth extraction.
During the panic, the Lever (6/6/25 ([link removed]) ) made this point in a story headlined “Wall Street to Insurers: Keep Denying Care.” Reporter Katya Schwenk pointed out how beyond price increases, Wall Street’s preferred solution to "lingering" healthcare costs is to use bureaucracy to deny healthcare, and placed the profit panic in the context of five years of high profits.
** Outright fraud
------------------------------------------------------------
Outright fraud can also help boost profits. The irony in the entire Wall Street panic over sicker people enrolling in health plans is that health insurance companies have been under investigation for fraudulently claiming that patients are sicker than they are for years.
In September 2023, the Cigna Group settled three whistleblower lawsuits ([link removed]) with the Justice Department for $172 million alleging that the company had sought higher reimbursements by adding diagnoses to patients’ records to boost their “risk scores,” which determine some forms of Medicare Advantage payments. The HHS inspector general concluded ([link removed]) last year that these company-generated diagnoses resulted in $7.5 billion in payments to health plans as part of risk-based reimbursement.
On the one hand, the insurance industry can make money by claiming that patients are sicker than they really are, but whistleblowers also allege that the industry illegally tries to avoid patients who are likely to actually need treatment. In May, the Justice Department filed ([link removed]) False Claims Act lawsuits against CVS/Aetna, Elevance and Humana, alleging they had paid hundreds of millions of dollars in kickbacks to brokers to steer patients into their plans. Aetna and Humana were also accused of having the brokers limit the number of disabled people steered to them. The federal government’s action was spurred by private lawsuits from industry whistleblowers; the allegations haven’t been decided in court.
** Absolving insurers
------------------------------------------------------------
NYT: UnitedHealth Grew to Be a Leviathan. Then Came the Backlash.
The New York Times (7/28/25 ([link removed]) ) tells the health insurance story from the point of view of the "leviathan."
Media outlets cover fraud and claims denials episodically, but reporters and editors sometimes frame stories in a way that absolves the actors of responsibility. The day before her New York Times story on United’s falling profits, reporter Reed Abelson (7/28/25 ([link removed]) ) wrote a detailed recap of UnitedHealth Group’s recent business history for the paper. Abelson used the passive voice to turn United from an accused agent of fraud and a failed custodian of patient data into a passive victim of “misfortunes” that mysteriously befell the company:
UnitedHealth Group emerged as a healthcare colossus over the past decade and a half, earning one of the highest stock market values in the nation. But in the last two years, it has been hit with just about every misfortune that can befall a company:
A gargantuan cyberattack. Federal investigations, including a criminal inquiry into one of its most important businesses. The killing of a top executive. A public relations crisis. Disappointing profits. A plummeting stock price.
The framing focuses attention on the misfortunes of United rather than on the problems of the patients who are denied care, or whose data was compromised in the massive ransomware attack on United’s Change Healthcare subsidiary. Nor did it highlight the providers who spend hours fighting for approval and payment from United bureaucrats—payments that, when approved, were delayed by the cyberattack.
Insurance companies wield all the industry’s profit-earning business tools actively. What they don’t do is address the core cost problems in US healthcare—extreme prices for hospital care, physician visits and prescription drugs (Healthcare Cost Institute,1/14/25 ([link removed]) ), and metastatic private bureaucracy that consumes more than a third of US healthcare spending (Annals of Internal Medicine, 1/21/20 ([link removed]) ). Those systemic cost drivers tend to be absent when journalists focus on corporate financial results.
** Peak Panic at WSJ
------------------------------------------------------------
WSJ: Health Insurers Are Becoming Chronically Uninvestable
The Wall Street Journal (7/10/25 ([link removed]) ) calls health insurers one of the worst names it can think of: "uninvestable."
With these tools at their disposal, the health insurance industry is hardly in trouble as a long-term investment. As the panic built between April and June, legendary long-term investor Warren Buffett's Berkshire Hathaway quietly purchased ([link removed]) 5 million shares of UnitedHealth Group stock, worth more than $5 billion.Yet the Wall Street Journal (7/10/25 ([link removed]) ) still sounded an alarm, slapping a headline declaring that "Health Insurers Are Becoming Chronically Uninvestable” on a column by David Wainer.
Perhaps unwittingly, Wainer’s piece summarized the core problem with entrusting access to healthcare to investor-based insurance. Investors not only expect health insurers to generate profits, but to produce ever-increasing profits and stock prices.
For many years, he wrote, health insurance stocks offered “steady, dependable returns, fueled by the expansion of government programs such as Medicare, Medicaid and the Obamacare exchanges.” Recently, though, “Wall Street has a problem with America’s health insurers: They keep missing their numbers.“ It's not that insurers are losing money, but that investors can’t expect constantly rising profits and, by extension, stock prices.
Indeed, the numbers that insurers were “missing” earlier this year are expectations set by predictions from the companies themselves. Profits alone aren’t enough for the hamster-wheel mindset on Wall Street:
With 2024 and 2025 already looking bad, 2026 is unlikely to be much better, as many insurers look to retrench. UnitedHealth might not grow earnings over its 2024 levels until 2027, according to analyst estimates on FactSet. Humana might not return to its 2023 profit peak until 2028.
The Wall Street Journal has done some outstanding healthcare reporting, as have other media organs. A year before Wainer’s meltdown, three Journal reporters (7/8/24 ([link removed]) ) analyzed billions of Medicare claims for the year 2018 through 2021 and uncovered $50 billion in payments to various insurers based on diagnoses added to patient records by the insurers themselves, like those in the lawsuit settled by Cigna.
But in coverage of the business of health insurance, the Journal, like too many other media outlets, normalizes the idea that health insurers should be expected to constantly extract more and more wealth from patients.
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Disclosure: FAIR buys health insurance through Elevance.
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