Making a profit isn't enough for Wall St.: You are going to have to pay, with your money (and maybe your life!)

Wendell Potter, in his “Health Care Un-Covered” substack, recently (Aug 6, 2025) reports that ‘As Americans Struggled, Health Insurers Made a Record-Breaking $71.3 Billion in Profits. In 2024, seven big insurers posted $71.3 billion in profits and paid their CEOs more than $146 million.’ There are several things being said in that sentence. First is that health insurance companies made a lot of profit. Second is that some people, specifically health insurance CEOs, are doing very well, thank you. Third is the assumption that Americans are struggling, presumably with their health insurance and healthcare. Let’s think about each of these.

These health insurance companies, per the chart that Potter includes, made $71.3B in profits. That seems like a lot to me. For most, it’s also more than the prior year. But not for all. Note that Humana made 33% less than in 2023, a mere $2.7B. 

Fortunately, that was enough to continue to pay it’s CEO over $15M.

At least UnitedHealth, the largest health insurer, is doing fine, right? It increased its profits 6% over the year before, and its CEO Andrew Witty (head of UnitedHealth Group, not to be confused with the assassinated Brian Thompson, CEO of UnitedHealthCare, who worked for him), is the highest-paid health insurance CEO at $26.3M, so I guess he deserves it because the company is doing so well. That shows that I (and possibly you) are not expert in the ways of Wall St. investors. It wasn’t enough for them. Just two days earlier, on Aug 4, Potter posted ‘Inside the Midyear Panic at UnitedHealth’. It makes fascinating reading, although the lessons learned by an MBA student may be different from those learned by, say, a regular person needing healthcare. As far as Wall St. is concerned, it is not enough to stay profitable; corporate profits need to continually go up so that these investors can meet their expectations for their own profit. It is important to understand that, as much as health insurance companies can be seen to be greedy parasites who produce nothing but obstruction and cost for those providing and receiving healthcare which they sell as producing “value”, private investors are a meta-level worse. They don’t even pretend to produce anything; they are, as an old family friend liked to say, “in money”. They invest and expect money back, more money all the time, and don’t care much about how the companies they invest in get it.

Nearly 500 years ago, Shakespeare wrote the “Merchant of Venice”, an excellent but anti-Semitic play about a greedy Jewish moneylender named Shylock.* Shylock has been widely decried for centuries for demanding a pound of flesh as repayment for the loan (how horrible!) But, by today’s standards, particularly in health insurance, he’d be a piker. While a lot of people, including me, could afford to lose a pound (or 20) of flesh, the health insurance companies are being spurred on by their investors (along with their own lack of values), are doing much worse. The actions that they are taking to ensure Wall St. investors make what they believe to be sufficient ROI will end up killing people. Antonio should have been happy to give up his pound of flesh! 

Of course, the financial investors in health insurance companies are not gauche enough to literally demand the killing of their clients. But they did demand changes that will undoubtedly have that result. While UnitedHealth saw an 8% increase in their Medicare Advantage plans, which they generally like because these plans allow them to do what they do with regular insurance, obstruct access, they still had to pay more out in medical claims than the shareholders were happy about. As Potter says, “Those seniors figured out how to get at least some care despite the company’s high barriers to care (aggressive use of prior authorization, “narrow” networks of providers, etc.).” Sounds good if you’re a patient, but if you’re an investor, it’s horrific. Remember what the insurance industry calls the percent of the premiums that they collect which they actually have to pay for medical care? The “medical loss ratio”! They hate it when they make less profit because they are paying for your care! Yes, UnitedHealth made $14.3 billion in profits during the second quarter, but it was less than the $15.8 billion they made in the second quarter of 2024, so something had to be done!

Potter describes what UnitedHealth promised its investors they would do:

• Dump 600,000 or so enrollees who might need care next year  [after all it is much more profitable to collect premiums from people who won’t need care]

• Raise premiums “in the double digits” – way above the “medical trend” that PriceWaterhouseCoopers predicts to be 8.5% (high but not double-digit high)[ie., you, the customer, pay more for less]

• Boot more providers it doesn’t already own out of network [when they work for you, money you pay them goes back to yourself!]

• ·       Reduce benefits [of course]

Yup, these changes most definitely will kill people.

Most insurance involves has you betting against yourself; you pay premiums to protect you if something happens that you do not want (or expect) to happen, but might. You have homeowner’s insurance, but you hope your house doesn’t burn down. You have auto insurance, but you hope you are not in a car accident. Originally, health insurance followed the same idea; it was not intended to pay for routine care, but to protect you if you had to be hospitalized and or have surgery for something you didn’t expect. But then it began covering (or hopefully covering) regular medical care, visits, treatments, and drugs. It was paying for what you wanted – regular care, not unexpected and unanticipated “major medical” care. This is different from what insurance usually is. Actually, though, insurance companies preferred as it is predictable and relatively low cost. With Medicare Advantage plans, for example, they take money from Medicare to cover seniors who are happy to have coverage for prevention, doctor visits, drugs, and even gym membership without having to pay separately for a Part D plan, a Medicare Supplement plan (to cover the 20% of hospital costs Medicare Part A doesn’t pay for), etc.

When those people get sick, however, they want their bills paid, and not infrequently United and the others were denying it. But as Potter points out, not often enough to please their investors. People were sometimes, increasingly, getting their bills paid – indeed CMS, the Center for Medicare and Medicaid Services, was requiring that they be paid. That is what infuriated investors – all that money going to pay for medical care rather than profit and shareholder dividends! So, they will reduce benefits, increase premiums, further limit the doctors you can see and hospitals you can use, and make being sick more unpleasant than it already is. Tough luck.

But that’s what you get when you have a “healthcare” system that exists primarily to make profit, not to provide healthcare. When you live in the United States. Why do we put up with this?

 

 

* Jews were moneylenders because it was an area open to them; in those quaint days Christians actually thought they had to abide on the Biblical prohibition on earning interest from lending money. It’s complicated; most of the prohibitions are actually in the Old Testament, but this was often interpreted as not lending money to other Jews; Christians were OK. Of course, they were presumably lending to other Jews when New Testament describes Jesus turning over the tables of the moneylenders in the Temple, saying per Matthew 5:42 ‘Give to the one who asks you, and do not turn away from the one who wants to borrow from you’. Anyway, both Jews and Christians lend money – “invest” – now.

 

Medicare and Medicaid at 60: Need more -- and more threatened -- than at 50!

Ten years ago, on August 2, 2015, I posted Medicare and Medicaid at 50: Time to include “US” all on the 50^th anniversary of Medicare and Medicaid. I lived in Kansas City, and with local pride noted that the legislation was signed by President Lyndon Johnson on July 30, 1965 at the Truman Library in Independence, MO, just outside KC, with President Truman and Mrs. Truman present. They received Medicare cards #1 and #2. There was reason for this symbolism; President Truman had tried to pass a national health insurance program in 1945, but it failed, confronting the shameful opposition of the American Medical Association. In some major ways, his proposed program was more ambitious than even Medicare and Medicaid together would end up being, as it would have covered 85-90% of Americans (it would, however, have been voluntary; opponents could have chosen not to pay in and thus not be covered). In 1946, the Republicans took over Congress and so the proposed legislation was dead, Republicans historically (and currently) opposing anything that benefits most of the American people.

President Lyndon Johnson signing the Medicare and Medicaid Acts with former President Harry Truman at the Truman Library in Independence, MO, in 1965. Ironically, Lyndon Johnson himself never made it to Medicare age, dying in 1973 at age 64.

Medicare provided universal health insurance to seniors, who had previously lived their last years in fear that they would get sick and be bankrupt and unable to afford care, as well as people with some serious disabilities including blindness. Medicaid, a different program funded by a federal-state partnership, with the federal government paying usually more than 50% and up to 90% depending on the average state income, was meant to cover the poorest Americans. Of course, each state set both the eligibility standards (how poor you had to be, and what else you had to be besides poor) and the benefits. And, of course, many states set standards well below the poverty level and provided very limited benefits.

A few years before that 50^th anniversary, in 2010, Congress passed, and President Obama signed, the Affordable Care Act, ACA, also known as Obamacare, which significantly expanded access to health coverage. One major component of the law was the establishment of insurance exchanges where individuals who were previously uninsured could purchase health insurance at group rates, which were more affordable than had previously been available to individuals. The other important component allowed states to expand their Medicaid programs to people who made too much money to have previously been eligible. This part was supposed to fill in the gap and cover those who, despite making too much for Medicaid, still were too poor to qualify for the ACA exchanges, and this was a lot of people. Remember, Medicaid did not cover people who were just poor (even really really poor); you had to be, as stated by Dr. Bridget McCandless, the CEO of the Health Care Foundation of Greater Kansas City at that 2015 event, “poor and…”:

Poor and pregnant, poor and the mother of small children, poor and disabled, poor and in a nursing home, poor and – and the tears rolled down her cheeks – a child.

As I have noted before, despite the lying propaganda put out by Republicans before the passage of HR 1 (the “Big Beautiful Bill”) this year, few Medicaid recipients are able-bodied but unemployed childless adults. Most are small children and their mothers or disabled or in nursing homes – and nursing homes, almost all of which are privately and profitably run, account for most of the money spent. By the way, neither Missouri nor Kansas (the other state in the Kansas City region) took the opportunity to expand Medicaid, even though the federal government would have initially paid 100% and after a few years 90% of the cost, so some of its citizens simply continued to suffer and die.

However, despite this, in the opinion of most Republicans in Congress, too many people were getting health care, and it was costing too much money which could otherwise be used for more important projects, mainly cutting taxes on the wealthiest people in this country. This “problem” is being addressed by HR 1, which will, according to the Congressional Budget Office, result in about 11 million people losing Medicaid coverage. Of course, this is denied by some; Vice President J.D. Vance said “Don’t believe every false media report that you’ve heard, because our explicit goal in the Trump administration is to protect people’s healthcare.” You can either believe him just saying that based on no data, or believe the CBO, or you can wait and see. Also, many Congressional Republicans expressed great concern about the bill’s impact on Medicaid, including my Congressman, Juan Ciscomani (AZ-6), but voted for it anyway. Note: voting for a bill with reservations is the same as voting for a bill!

Medicare will also be significantly (negatively) impacted by HR 1, as discussed in detail by the Commonwealth Fund. They address primarily low-income Medicare recipients with disabilities (arguably a particularly vulnerable group!) who have been eligible for assistance programs that help pay their Part B (outpatient) and Part D (drug coverage) premiums. HR 1 makes it possible for states to create additional obstacles to becoming enrolled in these assistance programs. A lot of Republicans have also talked about the tax savings people will get from Medicare payments, but it will not be very much, and benefit few:

Tax changes for people age 65 and older. The law includes a $6,000 annual tax deduction for adults over 65 with taxable incomes up to $75,000 annually ($150,000 for those filing jointly), with smaller deductions for those making up to $175,000 ($250,000 filing jointly) for 2025–2028. Low-income older adults generally do not make enough taxable income to be eligible for the deduction, but the provision could help middle- and higher-income older adults. The CBO has not separately estimated the cost of this deduction.  [Commonwealth Fund] 

Then there are the rest of us on Medicare. Another major Republican passion is privatizing both Medicare and, indeed, Social Security. Mostly they don’t like to talk about it openly because these are the two most popular programs in the nation, but that is what they are working on. And sometimes one – often a billionaire Cabinet secretary who hasn’t the slightest idea of how regular people live (are there any others?) -- slips up and says just that. In this case it was Treasury Secretary Scott Bessent who told us that the “Trump Accounts” for children were literally a “backdoor” for privatizing Social Security. And they also come in through the front door. The “Medicare Advantage” program is one of the main mechanisms for doing this; it is not Medicare (it takes the Medicare dollars that would provide for your care and pays them to an insurance company that basically puts you in their HMO or PPO) and is only advantageous for some recipients, mostly those who are not too sick. Note that these plans can vary a lot – in general government retirees are in better plans than those from the private sector – but the key issue is that rather than being in Medicare, which has to cover you, you are in a private insurance program which can – and does – often deny your claims, as it does for the non-Medicare insured. (see for example my posts "It was the best of times, it was the worst of times": Threats to the public's health from Medicaid cuts, MAHA, and others, Jun 7, 2025, and Open Enrollment Season for Medicare and Medicare Advantage: What you should know, Oct 7, 2024).

In 1945, under President Truman, the American people needed comprehensive universal health coverage. In 1965, under President Johnson, they still needed it, and some of the most vulnerable Americans, the elderly and poor, got Medicare and Medicaid. In 2010, under President Obama, they still needed it, and got some expansion of coverage from the ACA. In 2025, under President Trump, they need it more than ever, but the coverage that we do have is being deeply eroded. 

Meanwhile, the people of every other wealthy country have universal health care, longer lives, and better health outcomes, and it costs them way less! Are we such suckers?