Malefactors of Great Wealth: United Health and AARP

President Theodore Roosevelt denounced "malefactors of great wealth" during a speech he gave in Provincetown, Massachusetts on August 20, 1907.  He believed the federal government ought to advance the common good, even if that meant confronting the “malefactors of great wealth.”

Two different authors have recently challenged the federal government to confront two major entities which have been sucking the lifeblood out of our healthcare system: UnitedHealth and AARP.

Chris Jacobs of Juniper Research Group wrote a 16 page monograph in April detailing the extravagant marketing revenues AARP receives from UnitedHealth and the baleful effect they have on Medicare.  AARP's marketing revenues from UnitedHealth far surpass its membership dues and this encourages AARP to support UnitedHealth, rather than its members.  AARP no longer breaks out UnitedHealth's contribution to their revenues, probably due to embarrassment over becoming a political tool of the largest American for-profit healthcare corporation.  Chris Jacobs' monograph is too long to parse here, but can be downloaded at:

How AARP's Profits Harm Patients - And Violates Its Principles by Chris Jacobs - April 2024

It is important to note that UnitedHealth is at the center of a computer hack which threatens to bankrupt many health care providers and crash American healthcare. 

Subsequent to Chris Jacobs' monograph being published, the CEO of UnitedHealth Group was subpoenaed by U.S. House of Representatives and U.S. Senate Committees over his company’s disastrous handling of the cyberattack on its subsidiary, Change Healthcare. Andrew Langer, the director of CPAC Foundation’s Center for Regulatory Freedom has posted an article on RealClearHealth's blog challenging Congress to address the pernicious, Soviet-style UnitedHealth/AARP cartel (Комбинат):

https://www.realclearhealth.com/blog/2024/05/22/time_for_congress_to_take_a_good_look_at_unitedhealth_and_the_aarp_1033240.html

Time For Congress to Take a Good Look at UnitedHealth and the AARP
By Andrew Langer - May 22, 2024

Earlier this month, the CEO of UnitedHealth Group was called to testify before the U.S. House of Representatives and U.S. Senate regarding his company’s handling of a major cyberattack on its wholly owned health IT subsidiary company, Change Healthcare. Considering that the massive company interacts with nearly a third of all medical records and has just acknowledged that a “substantial proportion of people in America” could be impacted in some form or another due to the breach, Congressional hearings on the issue are likely justified.

The scope of the attack signals that a broader examination of UnitedHealth’s anti-competitive practices is in order, making an upcoming May 23 House Budget Committee hearing on healthcare monopolies even more timely.

Despite it being the catalyst for the recent hearing, certain members of Congress were wise to expand beyond questions over the cyberattack to ask more fundamental questions about the company’s business model, its impact on our nation’s healthcare system, and recent allegations regarding its practices. In doing so, these lawmakers helped illuminate many of the critical risks and inflated costs resulting from the increasing stranglehold giant health services cartels like UnitedHealth have on patients, seniors, and families. The House Budget Committee hearing gives members of Congress the opportunity to expand this line of questioning to bring UnitedHealth’s monopolistic practices to light.

For example, earlier this month, Rep. Buddy Carter put the company on blast, asking the CEO directly how UnitedHealth can justify “clear conflicts of interest.” He went on to say, “This vertical integration that exists in health care in general has got to end.”

Carter’s assertion that companies like UnitedHealth are “vertically integrated” is completely accurate. Leveraging government entitlement programs like Medicare, Medicaid, and Obamacare to fund their acquisitions and fuel their growth, these are no longer just large health insurance and services companies. They are self-integrated networks of highly profitable enterprises that own, operate, and drive customers across their pharmacies and pharmacy benefit manager (PBM) subsidiaries, primary and urgent care practices, surgical centers, home health, and health IT companies (ex., Change Healthcare), and more. They’re even exempted from federal anti-kickback corruption laws to allow them to operate as they do.

The more captive the patient or sponsor is to their network – and the more government directly or passively assists them in gaining greater control of our healthcare system – the more revenue they can generate. UnitedHealth is now the largest health insurance company in America. They’re the biggest issuer of Medicare Advantage policies for older Americans. They own one of the biggest PBMs and have made multi-billion acquisitions in the home health and care delivery sectors. And by way of a recent health IT shopping spree, they now obviously own Change Healthcare. All told, with revenues of $371 billion last year, UnitedHealth Group is one of the largest companies in the world.

But what value are Americans getting in return for all the efficiencies large integrated companies like UnitedHealth supposedly provide? Well, not many seem to be raving about improved levels of quality of service and care. Instead, they see insurer-imposed costs for patients, seniors, families, taxpayers, employers, and government programs skyrocketing. Simultaneously, healthcare consumers are quite literally being trained, or worn down, by a form of customer service and billing torture that occurs if they attempt to go outside their “network.” Doing so can often lead to delays or denials or cost them even more money in unexpected fees.

This is not the free-market capitalism we support; it’s corporate rent-seeking behavior operating at the expense of consumers and patients. And despite all their talk of holding big corporations accountable, liberal leaders in Congress, who once wore their disdain for “Big Insurers” as badges of honor, are hypocritically and quietly helping, or turning a blind eye, to facilitate much of what is occurring. Even U.S. Senator Amy Klobuchar (D-Minn.), chair of the powerful Senate Judiciary Antitrust Subcommittee – one who rarely passes a microphone to rail against big companies – is AWOL on addressing these healthcare cartels’ massive accumulation of power.

As for the so-called advocate for older Americans, the AARP, they’ve now been paid roughly $8 billion dollars via UnitedHealth in recent years. And from absurd drug pricing rebates and patient cost-shifting abuses to billions in Medicare overcharges and AI-enabled patient care denials, has anyone seen any major AARP grassroots campaigns taking on big insurers or PBMs? Nope. Meanwhile, AARP’s executives in Washington spent over $60 million to help pass the insurer-friendly and subsidy-laden Inflation Reduction Act (IRA).

To date, Democrat majorities and the insurer-funded AARP have offered little scrutiny of these massive company’s business practices unless forced to do so. That’s likely because, from Obamacare’s implementation through the passage of IRA, liberals, the health cartels, and AARP have had shared financial and political interests.

As an advocate of true free market capitalism, I’d say without hesitation that America’s healthcare system today is anything but a free market, pro-consumer, or healthy for America. Congress was right to get to the bottom of the cyberattack on Change Healthcare. Now, the House Budget Committee has another opportunity to dig into the broader impact of today’s giant health services cartels on American patients and families.

Andrew Langer is director of the CPAC Foundation’s Center for Regulatory Freedom and the Executive Director of the Coalition Against Socialized Medicine (CASM).