UnitedHealth Group has fewer private paying customers than in 2012, but its remaining customers are paying way more in premiums and deductibles

In a previous post, I wrote about the explosive growth in revenue, profits, and health plan enrollment in UnitedHealth Group’s Medicare and Medicaid businesses. As I noted, ALL of the company’s health plan enrollment growth in the U.S. has come from those taxpayer-financed programs over the past 10 years. 

Between September 30, 2012, and September 30, 2022, enrollment in UNH’s employer and individual health plans shrank by 370,000–from 26,925,000 in 2012 to 26,555,000 in 2022. Meanwhile, enrollment in its “community and senior” health plans, financed largely by your tax dollars, more than doubled–from 9.6 million to 19.4 million. 

Despite UNH’s obvious and continuing focus on taxpayer-funded programs for profitable growth, I do not want you to think that its employer and individual business (which, by the way, includes billions from the federal government in the form of ACA subsidies for people who otherwise can’t afford United’s premiums) has not been profitable. Quite the contrary. The company is as determined as ever to suck as much as possible out of your and your employer’s pockets to boost its bottom line. 

THE EVIDENCE–Over the past decade, total employer and individual health plan revenues increased 37%, from $11.6 billion during the third quarter of 2012 to $15.9 billion during the same period this year. 

WHY YOU SHOULD CARE–What’s going on here, of course, is that even though UNH is “serving” nearly 400,000 fewer people in its U.S. commercial and individual health plans (at a time when the U.S. population over the past 10 years increased by 19 million), it is taking in far more money per employer and per individual now than it did a decade ago. 

Although UNH’s private-paying customers are not as much a source of profitable growth as Medicare and Medicaid, they continue to be quite profitable. If they weren’t, shareholders would have a fit. 

While UNH and its peers have not been able to make much of a dent in controlling healthcare delivery costs over the past 10 years (except by restricting access to care in various ways), they have been quite successful in making its private sector customers pay more–for less. 

UP UP AND AWAY–The average cost of an employer-sponsored family plan last year was $22,221, according to the Kaiser Family Foundation. That’s up 47% from 2011. And employees are picking up more and more of the cost of the premiums. 

BUT THAT’S NOT ALL THE HURT–Not only are employers shifting more of the cost of premiums to their workers, but they are also making them pay more out of their own pockets before their coverage kicks in. 

KFF researchers found that the average deductible among covered workers in 2021 was 92% higher than it was in 2011. A little bit every year adds up pretty fast.

And deductibles are just a portion of what most workers have to pay when they need care. As KFF noted: 

• A large share of covered workers also pays a portion of the cost when they visit an in-network physician. 

• Most covered workers face a copayment (a fixed dollar amount) when they visit a doctor, although some workers face coinsurance requirements (a percentage of the covered amount).

• Most workers also face additional cost sharing for a hospital admission or outpatient surgery…The average coinsurance rate for a hospital admission is 20% and the average copayment is $321 per hospital admission. The cost-sharing requirements for outpatient surgery follow a similar pattern to those for hospital admissions. 

A NEW TERM YOU NEED TO COMMIT TO MEMORY–That term, which I haven’t heard outside of meetings between insurance company executives and Wall Street financial analysts, is “benefit buydown.” I’ll write more about that soon. But for now, just know that what it means is that every year, without fail, you are paying more for less. In other words, the value of your health insurance is constantly shrinking. 

That’s one big reason why UNH and its peers are able to keep making ever-increasing billions of dollars in profits on their private sector health insurance business, even as enrollment in their private plans shrinks. 

BOTTOM LINE: Our employers continue to drink the same spiked Kool-Aid that insurers have been serving, which makes them both stupid and gullible. More on that soon, too. 

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