UnitedHealth, Cigna and Elevance's House of Cards Is Wobbling

From mass physician expulsions to downcoding schemes to threats against hospitals, Big Insurance is tightening its grip—even as Wall Street punishes them for slowing enrollment and shrinking margins.

We’ve reported over the past few weeks about actions being taken by UnitedHealth Group, Cigna and Elevance, three of the giants in the for-profit health insurance business, that undoubtedly will push independent physician practices to the brink of bankruptcy and closure – or force them to sell out to either an insurance conglomerate or big hospital system – and severely restrict Americans’ access to the doctors and hospitals of their choice. Other Big Insurance companies undoubtedly will follow suit. Even President Trump is getting the message: These truly are “BIG, BAD” “money-sucking” companies.

To briefly recap, UnitedHealth has told investors it plans to eject thousands of doctors from its provider networks next year because those doctors apparently don’t see eye to eye with the insurer on how best to provide patient care. The message: “Our way or the highway.” As if that weren’t alarming enough, a story we published last week – based on research appearing in the current edition of Health Affairs – describes yet another way UnitedHealth is squeezing independent practice doctors financially: by paying the physician practices it owns up to 61% more than it pays practices it doesn’t own.

Cigna, where I used to work, last month implemented a policy of automatically slashing reimbursement to many doctors by downcoding several procedures. And Elevance, which owns Anthem Blue Cross plans across the country, has notified thousands of hospitals and outpatient facilities that they could be kicked out of Anthem’s networks for allowing physicians who are not in the insurer’s network to treat any of the 45 million Americans enrolled in Anthem’s health plans.

The three companies differ in several ways but two things they have in common are:

1. They are publicly traded companies listed on the New York Stock Exchange and are under constant pressure to meet the profit expectations of a handful of institutional investors; and

2. They embarked on a vertical integration strategy a few years ago, meaning all of them have morphed into enormous conglomerates that now own huge parts of the U.S. health care delivery system, from physician practices and clinics to pharmacy benefit managers and home health businesses.

Wall Street made them do it

A review of their financial reports over the past few years make it clear that they really had no choice but to get deep into health care delivery because the fundamentals of just being in the health insurance business had stopped working for them and their shareholders. Their relentless premium increases have priced growing millions of Americans – and their employers – out of the health insurance market.

An analysis of the change in health plan enrollment over the years bears this out. For example, UnitedHealthcare actually had fewer people enrolled in its commercial health plans in 2023 than it did in 2013 – even though the country’s population grew by about 18 million. All of the company’s enrollment growth during that time came from the lucrative taxpayer-funded Medicare Advantage business and from people enrolled in the Medicaid plans the company administers for several states.

Aetna’s health plan enrollment increased by only 4.3 million between 1998 and 2025 – from 22.4 million to 26.7 million. Meanwhile, the U.S. population increased 64 million between those years. Constant rate increases have made it impossible for Americans to afford private, commercial coverage unless it is subsidized by either taxpayers through tax credits (subsidies) or an employer, and the percentage of employers still offering coverage to their workers has declined significantly over the past several years. In 1999, approximately 71% of non-elderly workers were offered health benefits by their employer. By 2024, the offer rate was down to 54% for firms with three or more workers.

This means that the only revenue growth they’ve achieved on the insurance side has come from acquiring smaller competitors, stealing market share from each other, taking over the taxpayer-funded Medicaid programs in most states, and through those unrelenting increases in premiums. And, most importantly, by luring more and more seniors into their Medicare Advantage plans and collecting tens of billions of dollars in overpayments from the federal government every year.

Elevance as an example

After Elevance notified hospitals last month of its ultimatum on using out-of-network doctors, I decided to look more closely at its third quarter 2025 earnings report. It became clear to me that Elevance, like its peers, is desperately trying to do whatever it can to meet Wall Street’s short-term profit expectations (and at the end of the day, those expectations are always short-term, quarter-to-quarter).

Elevance reported its revenues in the third quarter of this year were up 12% over the same period last year, growing from $44.7 billion to $50.1 billion. But its earnings fell almost 50%, from $2.5 billion to $1.3 billion. Its operating margin, consequently, dropped from 5.5% to 2.7%.

The additional $5.4 billion in revenue clearly came from significant premium increases in its declining commercial insurance book of business and from the government programs. Commercial enrollment declined by 265,000 people, and its Medicaid enrollment dropped by 281,000. It gained 198,000 people in its Medicare Advantage business, but overall, the company covered 348,000 fewer people on September 30, 2025, than it did on September 30, 2024.

The other way it got that bump in revenue, aside from higher premiums and more money from Uncle Sam, was from Elevance’s non-health insurance division, Carelon, which encompasses the PBM and clinical operations it now owns.

Carelon’s revenues grew at a faster clip than the company’s health plans (4.5% vs 3.9%). But Carleon’s growth was fueled mostly by increased payments from those health plans. In other words, the company’s Anthem plans paid Carelon’s PBM and clinical operations more money than ever.

The self-dealing these vertically integrated companies are engaged in is a kind of smoke and mirrors/sleight of hand business strategy, one that I would argue cannot be sustained unless our lawmakers and regulators allow them to buy up more and more big chunks of our health care delivery system.

Even with the transfer of additional money from Elevance’s health plans, the profits of the Carelon division were down 11% over the same timeframe, from $900 million in Q3 2024 to $800 million in Q3 2025. Still, it performed a lot better than the company health benefits (Anthem/Wellpoint) division, which saw its operating earnings fall a whopping 63%, from $1.6 billion to $600 million.

Carelon seems to have few customers other than Elevance’s health plans. Elevance CEO Gail Boudreaux acknowledged that to investors, noting that most of Carelon’s revenues come from the company’s own health plans. She held out hope to them that Carelon would soon or eventually land customers outside of the Elevance ecosystem. But her competitors – UnitedHealth, Cigna, and CVS/Aetna – will be trying to do the same thing and, I would suggest, to little avail. At UnitedHealth, as we have noted, the share of the revenues generated by the company’s Optum division are coming more and more every year from the company’s health plan division, UnitedHealthcare. (Big Insurance accounts for this self-dealing by classifying all the left-hand-paying-the-right-hand transactions euphemistically as “intercompany eliminations.”)

As I’ve noted before, the only substantial enrollment growth UnitedHealth, Aetna and Anthem plans have been able to achieve in recent years has been by stealing market share from each other or from their smaller competitors or by grabbing tens of billions of dollars from the Medicare Advantage program by claiming that people enrolled in their MA plans are sicker than they actually are.

You can be certain that these companies are spending more money than ever on lobbying and campaign contributions this year to keep their house of cards from collapsing and the flow of tax dollars into their bank accounts gushing. They’re spending record amounts on lobbying because several key Republicans are joining Democrats in attempts to rein in insurers’ abuses and profiteering. For example, bipartisan legislation has been introduced in Congress to ban the self-dealing I’ve described – essentially by making these conglomerates’ vertical integration strategy unlawful – and by ending the rampant abuses in the Medicare Advantage program.

If those bills and others were to pass, the tight grip these companies have on our health care system would be loosened. And some investors clearly are beginning to see that this industry’s glory days might be over, questioning not only the sustainability of their business strategies but also whether our politicians will stay in insurers’ back pockets as the protests of patients and health care providers grow louder. Shares of Elevance stock have lost nearly a third of their value since reaching a high of $458.75 in April. All the other companies have also seen steep declines in the value of their shares. If both Wall Street and Washington keep turning up the heat on these companies, they’re in big trouble.