President Donald Trump is pursuing a healthcare strategy that few before him were willing to attempt: confronting corporate insurers head-on. And if the administration continues on this path, it will result in the 47th president succeeding where his predecessors failed.
Trump recently signed legislation to rein in pharmacy benefit managers, the shadowy middlemen insurers employ to inflate drug prices through a variety of questionable business practices, and the offshoring of pharmacy benefit operations. His Department of Justice is also conducting an investigation of UnitedHealth Group to combat abusive billing practices. Additionally, a March report from the Office of the Inspector General found hundreds of millions of dollars in savings were not passed through to patients or taxpayers, instead retained within the insurer-PBM system
Recommended Stories
By targeting insurers — the entities that ultimately determine what patients actually pay — these efforts strike at the core of rising healthcare costs.
WHAT DOES TRUMP’S ANTITRUST ENFORCER HAVE IN THE CARDS FOR YEAR TWO?
But if Trump and Republicans want to deliver lasting, structural change for patients, especially seniors, they need to stand firm on these efforts. They should explore antitrust violations and abuses that the insurance conglomerates themselves may be involved in and restore real competition to the system.
Until that happens, history has proven that big insurers will find ways to dodge even the most well-intentioned reforms, no matter how determined the administration is.
The growing influence of insurers in American healthcare is impossible to ignore. In recent decades, the industry has consolidated into a handful of vertically integrated mega-companies that control every step of care, from insurance plans and pharmacy benefit managers to physician networks and pharmacies.
UnitedHealth, the nation’s largest insurer, comprises nearly 2,700 subsidiaries and employs or oversees close to 1 in 10 American doctors. It generates an estimated 40% of its revenue by shuffling patients between its various businesses.
Similarly, insurance giants such as CVS Health and Elevance have spent years acquiring smaller insurers, providers, and pharmacies. Together with UnitedHealth, these companies controlled roughly 40% of the national commercial insurance market as of 2023.
This consolidation has real consequences for patients — and seniors often feel them most acutely.
When insurers control both the financing and delivery of care, they can create an endless array of ways to drive up profits at every step. They can steer patients toward more expensive treatments at providers they control. Likewise, they can limit coverage of lower-cost drugs in favor of options that generate higher profits — something that PBMs are famous for doing. For seniors managing chronic conditions on fixed incomes, those cost increases add up quickly.
Many insurers also impose restrictive coverage rules, such as prior authorization and “fail first” requirements, that can prevent patients from accessing the treatments their doctors recommend. Nearly a third of physicians report that these delays have led to serious patient harm, including hospitalizations.
And the lack of accountability has also allowed insurers to drive massive waste in taxpayer-funded programs. More than half of eligible seniors now rely on Medicare Advantage plans, which are managed by private insurers and subsidized by the government.
Many insurers exploit that system through “upcoding,” a practice in which they exaggerate the severity of patients’ conditions to secure higher reimbursements. This fraudulent practice costs taxpayers nearly $80 billion each year and is the focus of the recent Justice Department’s investigation into UnitedHealth.
Because large insurers have so much reach, they are effectively immune to many obvious reforms. Lower drug list prices, and insurers can still use PBMs to mark up patient costs. Crack down on billing abuses, and insurers will just raise costs in another part of the care chain.
That means there is only one real solution if Republicans want to leave a durable legacy in the insurance system. Maybe it’s time to explore breaking big insurers up. As polling has demonstrated, conservative voters would support such an act.
That may sound drastic, but it’s necessary to restore competition and accountability to the system. Separating insurers from the providers, pharmacies, and middlemen they own would limit self-dealing and give smaller competitors a chance to reenter the market. Just as important, it would keep insurers from dodging the reforms Trump has already set in motion.
Congress could then build on that foundation with additional fixes. Stronger transparency requirements for PBMs would ensure that savings are passed on to patients. Limits on prior authorization would prevent insurers from blocking essential care. And tighter oversight of programs like Medicare Advantage would help ensure taxpayer dollars actually benefit seniors instead of padding corporate profits.
THE BIG CON: THESE LAWS KILL HOSPITAL COMPETITION
Trump’s boldness in taking on the insurance system has given Republicans a rare opportunity to make lasting change. But if policymakers do not deal with the big insurers, America risks settling for incremental progress instead.
It’s up to Republicans in Congress to help Trump finish what he has started. Let’s reform big insurance and, if needed, explore creating a more competitive and responsive market by breaking up big insurance, clearing the way for Trump to deliver the reforms seniors are counting on.
Saul Anuzis is president of 60 Plus, the American Association of Senior Citizens.
