Lawmakers Target the Power of Health Insurance Giants
THE NEW YORK TIMES
After years of rampant expansion into nearly every corner of the health care system, the biggest insurance conglomerates are confronting new efforts to break up their businesses.
Arguing that the companies have become too dominant, Arkansas and Tennessee passed laws that aim to prevent the companies from managing prescription benefits and running retail and mail-order pharmacies. Lawmakers in other states and in Washington have proposed similar restrictions.
In response, the three companies — UnitedHealth Group, CVS Health and Cigna — are fiercely fighting back. They and their allies have filed lawsuits, deployed lobbyists, pestered customers with texts and blanketed the airwaves with advertisements.
Hours after Gov. Bill Lee of Tennessee, a Republican, signed the new law in May, CVS sued in federal court to block it. In a matter of weeks, UnitedHealth, Cigna’s Express Scripts and a trade association for the companies all followed with additional lawsuits against the legislation.
The companies said that patients would lose access to their pharmacies.
“We owe it to our patients to do everything in our power to stop these misguided laws from taking effect,” said Susan Peppers, an executive overseeing Express Scripts.
At a time when affordability has become a key concern, the companies say that the laws would make prescription drugs more expensive. The laws’ supporters say that dismantling the conglomerates would have the opposite effect on prices, by eliminating business practices that inflate costs.
Federal and state lawmakers who are pharmacists, doctors and nurses have been driving many of the legislative proposals, contending that the big conglomerates have harmed patient care and pushed small drugstores out of business.
The lawmakers’ efforts reflect growing public worry that the three conglomerates have become too large and rife with conflicts. Increasingly, Americans rely on one of the three titans for nearly all aspects of their medical care. The same company that insures them also employs their provider and dispenses their drugs.
UnitedHealth, for example, now includes a major insurer; a pharmacy benefit manager, or P.B.M.; a vast network of doctors and clinicians; a chain of surgery centers; a clearinghouse that processes insurance claims; a mail-order pharmacy; and a bank.
Today, with hundreds of billions of dollars in annual revenue, the three conglomerates each rank among the largest 15 U.S. public companies by sales. None of the three were in that category as recently as 2011, according to FactSet, a financial data provider.
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