UnitedHealthcare, nation's largest insurance company, posts record profit for an insurer; growth comes mainly from taxpayers

UnitedHealth Group's headquarters is in Minnetonka, Minnesota, near Minneapolis.

NEWS ANALYSIS by Wendell Potter

Just days after a Commonwealth Fund report showed that American families are sending health insurance companies more and more of their income every year even as their deductibles skyrocket, the country’s biggest insurer reported massive 2021 profits and told investors to expect even higher profits in 2022.

UnitedHealth on Wednesday reported 2021 profits of $24 billion on revenue of $287.6 billion. Executives told Wall Street they expect United will be the first insurer to take in more than $300 billion from its customers this year.

Instead of giving its health-plan customers relief from ever-increasing out-of-pocket requirements, United spent $5 billion last year buying back its own shares of stock, a gimmick that boosts the value of shares and makes shareholders richer. United also paid shareholders $5.3 billion in dividends in 2021.

No insurer has ever made that kind of money in U.S. history. It’s even more notable when you consider that United is not growing by attracting substantially more new customers.

At the end of 2021, United had about 26.6 million people enrolled in its commercial (individual and employer-sponsored) health plans. That’s just 700,000 more than the 25.9 million the company had 10 years ago. Most of United’s membership and revenue growth now comes from the company’s Medicare Advantage plans and the state Medicaid programs it manages. In other words, from us as taxpayers. United and other insurers are padding their top and bottom lines by charging their existing commercial customers higher and higher premiums every year.

Consider this: an employer-sponsored family policy that cost an average of $15,073 in 2011 cost $22,221 in 2021, a 47% increase, according to the Kaiser Family Foundation. And during that time, insurers have forced their health plan enrollees to pay more and more out of their own pockets through ever-increasing deductibles, copayments and coinsurance. Most Americans now have to pay on average twice as much out of their own pockets as they did 10 years ago.

That Commonwealth Fund report shows that with the relentless increase in both premiums and out-of-pockets, Americans are shelling out far more of their household income for health insurance and to cover out-of-pockets than a decade ago. Premiums and deductibles now take up more than 10% of median income in 37 states, up from just 10 in 2010.

Insurers argue that high deductibles are necessary to control premium increases. Unfortunately, most employers and policymakers seem to have bought that argument. But when you look at the research from both the Commonwealth Fund and Kaiser Family Foundation – and then the record profits United and other insurers are reporting – that talking point just doesn’t hold up.

Editor's note: UnitedHealthcare's parent firm, UnitedHealth Group, is the world's eighth largest company by revenue and second-largest health-care company behind CVS Health by revenue, and the largest insurance company by net premiums, according to Wikipedia. Wendell Potter is a former reporter Tennessee and Washington who spent more than two decades in the health insurance industry, first at Humana and then at Cigna as head of corporate communications. He has written three books: Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans (a New York Times bestseller and winner of the Ridenhour Book Prize in 2011); Obamacare: What’s In It for Me/What Everyone Needs to Know about the Affordable Care Act (an ebook); and Nation on the Take: How Big Money Corrupts Our Democracy and What We Can Do About It. His nonprofit corporation, To Be Fair, publishes news and commentaries on money in politics, propaganda, health care and other topics.