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If healthcare was featured on a Saturday Night Live Skit – Linda Richman would get verklempt as the Affordable Care Act is Neither Affordable, Nor does it provide real care, Nor does it Act through preventive measures to make Americans healthier.
As a physician and attorney who has been concerned about the dangers of greater and greater consolidation of the healthcare industry and its anticompetitive consequences, I have always be disappointed with the Federal Government’s unwillingness and inability to stop both the vertical and horizontal integration of health insurance companies. These have only grown exponentially since the ACA went into effect while Insurance Companies have become more profitable. See the Chart Below:
Vertical and Horizontal Integration - Its Monopoly Time
Health insurance companies have expanded and acquired other insurance companies (horizontal integration) and have purchased or built other kinds of healthcare businesses including Pharmacy Benefit Managers (which control drug prices and copays) and acquire or create medical practices (vertical integration).
Spotlight - United Healthcare/Optum - Washington State - Medicare Advantage
United Healthcare owns Optum, a network of approximately 1,600 medical practices throughout the United States with 36 of them being in the State of Washington. In some communities they are the dominant provider of primary care.
In Washington State, United Healthcare is the largest provider of Medicare Advantage plans with Humana being the second largest covering approximately 120,000 seniors with 25% market share. Up to this point, Optum owned practices have accepted Humana insurance as an in network provider. That means that if you have Humana Insurance you can be seen at an Optum owed practice and be covered.
Major Optum Changes in 2026 - Humana Not Accepted
Starting in 2026, Optum owned practices will no longer take Humana insurance. That means that if you are a patient at an Optum owned practice in Washington State your Humana insurance will no longer be accepted. This is forcing seniors on Medicare Advantage plans to make a choice. If they want to keep their Optum doctors they must change their insurance from Humana to United Healthcare.
Optum is forcing patients to buy their insurance from United Healthcare or if they don’t switch and keep their Humana insurance thy must find another doctor. This is the first publicized instance of an insurance company jamming its plans to patients through their own medical practices. The result is that 8 out of 10 Seniors on Humana will change to United Healthcare to see their existing physicians.
How Big is Optum Health?
Optum Health has over 90,000 physicians of which about 10% are direct employees. In any market where Optum has significant market share, they can expand this practice to refuse to accept any other insurance other than United Healthcare.
The Result is to drive other insurance companies out of the market and expand the reach of their anti-competitive monopoly at the expense of America’s most-vulnerable - Our Seniors.
What are the consequences? Market Specific (based on market share)
In Spokane County where Optum has no clinics, it will have no effects. But in Snohomish County with population of about 840,000, Optum controls almost 45% of the primary care market. In that county, Optum patients with Humana who want to keep their doctors must switch to United Healthcare.
What will be the effect on Medicare Advantage?
Before this Optum policy change, United Healthcare controlled almost 49% of the county’s Medicare Advantage market and Humana controlled 25%. This policy change will force a huge number of Humana’s Medicare Advantage policy holders to switch to United Healthcare. The result will be United Healthcare market share over 50 percent of all Medicare Advantage.
Washington State is not the only market at risk. Oprum has similar dominance in parts of California, and Nevada. In Contra Costa County, California Optum controls over 40% of the primary care market and in Clark County, Nevada Optum has an almost 36% market shares.
Increased Illnesses Increase Medicare Costs
Medicare Advantage Plan Insurance Companies are paid a fixed monthly fee per member and the more illnesses the member has, the higher the fee. It is not surprising that when your doctor that determines what conditions you have is also employed by the insurance company that would benefit from a higher fee there is a likelihood of the illnesses being overstated. There have been scandals of insurance companies overstating illnesses for higher reimbursement that were the subject of a recent Wall Street Journal Investigation on various forms of Medicaid Fraud.
The Runaway Train Must Be Stopped
If these trends are not stopped, we will be creating a situation where the insurance companies will control the insurance premiums, the drug costs, where the care is provided, who provides the care. The final vertical integration will be a health insurance company owned hospitals with total control of the healthcare system and our Medicare/Medicaid System.
For decades, the DOJ has done very little to stop the mergers and vertical integration of healthcare by insurance company giants. The result has been less competition and higher prices for healthcare. Yet, no one bat an eyelash.
It is a basic economic principle of our free enterprise economy is that competition leads to better quality at lower prices. However, since the ACA, the government has taken the opposite approach which has resulted in a rapid price increase in health insurance. It is time for this to come to an end.
If consolidation continues, tax payers will be forced to bear the increasing costs of Medicare Advantage Plans as the members get “sicker” as these employed doctors determine what conditions a member has.
Scandals Increasing
According to a January 2, 2025 article in the Wall Street Journal entitled “How Health Insurers Racked Up Billions in Extra Payment From Medicare Advantage” by Christopher Weaver “Medicare Advantage insurers diagnosed patients with conditions that triggered extra payment of $50 billion form 2019-2021, even though no doctor ever treated the diseases”.
Patients Get Sicker in Insurance Captive Care Model
With specific regard to doctors who work for United Healthcare (Optum), when patients were treated by these employed doctors, the patients got 55% sicker. United Healthcare claimed that their diagnoses was more accurate.
The Wall Street Journal article’s analysis states that when patients switch to United Healthcare Medicare Advantage plans and are treated by United Healthcare doctors, they will have more illnesses than previously listed in their medical record. Miraculously, the monthly reimbursement by the Federal Government to United Healthcare increases.
Another aspect to Medicare Advantage Plans is that advantage plan must spend 85% of the premiums on medical costs. When they own the care they can easily pay more for medical costs because they are paying themselves.
If these trends are not stopped we will be creating a situation where the insurance companies will control all aspects of care, Insurance premiums, the drug costs and the location of and provider of care with the final goal to take over the hospitals.
Where are the trust busters? Absent
For decades, the DOJ has done very little to stop the mergers and vertical integration of healthcare by insurance company giants. The result has been less competition and higher prices for healthcare.
It is a basic economic principle of our free enterprise economy is that competition leads to better quality at lower prices.
When it comes to healthcare, the Government’s inability or unwillingness to preserve competition in the healthcare market is a major factor for the rapid price increase in health insurance. It is time for this to come to an end.

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