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Big Insurer Explosive Growth & Profits Since ACA Passage

April 7, 2022

Summary: An excellent review of 12-year financial trends for the largest six insurers reveals: a) skyrocketing revenue and profits, b) based mainly on growth in the public insurance sector, and c) acquisition of pharmacy benefit plans. Half of Americans are in their plans.

A decade-long look at how Big Insurance profiteers American taxpayers and the sick
Wendell Potter NOW
April 4, 2022

Those six companies–Anthem, Centene, Cigna, CVS/Aetna, Humana, and UnitedHealth–are massively bigger today than they were 12 years ago [when the ACA was passed] as a result of numerous mergers and acquisitions and a new love interest: the government. In 2010, the companies took in a combined total of $245.2 billion dollars in revenue. Last year, that number had more than quadrupled to $1.1 trillion.

Two of those companies–United and CVS/Aetna–have grown so fast they have leapfrogged into the top five of the Fortune 500 of America’s biggest companies. Only Walmart, Amazon and Apple took in more money last year than those two companies. (Cigna, the third largest in terms of revenue and my former employer, is now the 13th largest on the Fortune list.)

The big six insurers’ profits have soared along with their revenues. Last year they made $60.7 billion in profits collectively, compared to $16.9 billion in 2010.

Relatively little of the six companies’ growth in health plan revenues and profits has come from private paying customers. By far most of the money they now collect to administer health plans comes from us as taxpayers. That’s because all of the companies have shifted their focus away from the private sector and toward various government-funded programs: Medicare, Medicaid, federal employees and the military.

In 2010, 16.9 million Americans were enrolled in the Medicare Advantage, Medicare supplement and Medicaid plans operated by the big six. In 2021, that number had increased by 46 million–373%–to 63 million.

Thanks to the many mergers and acquisitions since then, one of every two of us are now enrolled in one of their health plans. (And 31.1 million of us remain uninsured.)


The Big Three of the Big Six make more money “managing” Americans’ prescription medications than by administering our health insurance plans. Aetna supersized itself when it merged with CVS, which operates the country’s largest pharmacy benefit management [PBM] company, Caremark, in 2017. Cigna bulked up the next year when it merged with Express Scripts, the second largest PBM. And United’s fastest growing and most profitable division is Optum, which encompasses the country’s third largest PBM. Together, CVS, Cigna, and United control nearly 80% of the national PBM market. At all three companies, the PBMs now generate more profits than their health plan businesses.

Those three companies are also far bigger than the biggest company that actually makes prescription medications. Johnson & Johnson, the biggest U.S. drug company, ranks a distant 36 on the Fortune 500. To put that in perspective, J&J was #33 on the Fortune list in 2010. Cigna, which is now #13 was #129 in 2010.

Comment by: Jim Kahn

The Affordable Care Act will strengthen the hand of private insurers, single payer advocates said in 2010. Oh how I wish we’d been wrong.

Wendell Potter’s review highlights just how right we were. Half of us are enrolled in plans (both private and public) run by the top six insurers, with $1.1 trillion in annual revenues and $61 billion in profits. (Lest you think, oh, that’s not such a big profit margin, consider that the rate of return on real investment is 6 to 9 times higher.)

Most of the gains are for publicly funded programs, primarily Medicare Advantage and Medicaid Managed Care.

They’ve even taken over pharmacy benefit management companies (PBMs), which specialize in extracting more profits from health care.

All in all, a dismal state of affairs. Profits grow exponentially, while access to care and health outcomes plummet. Shareholders gain and beneficiaries lose.

Time for disintermediation. Seriously.

© Health Justice Monitor
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