Thomas Mezzetti, MD
June 2026—The primary reason for health insurance is to help patients pay for medical care when they need it. Beneficiaries pay their premiums when healthy to receive payouts when sick. Sounds simple, and at its inception it was. Dallas, Tex., gave birth in 1929 to the precursor of the Blue Cross system. Plan members paid in, and if hospitalization was needed, care was rendered and fees were paid by the community pool. But we’ve come a long way since then.
Fast-forward to 2026. The “Big Blues” have gotten a lot bigger, and fatter. One of their offspring is Anthem Blue Cross and Blue Shield. In January of this year, it unilaterally announced that it would roll out a plan in 11 states (with a 12th state now pending) making it much harder for patients to receive medical care. One of those states is my home state of Connecticut. Insurance companies have discovered numerous ways to raise the hurdles by which premiums translate into disbursements for care, and this is simply the latest.
The particular machination in this case is a 10 percent cut to hospital reimbursements when out-of-network (OON) physicians are used to provide care. This may not sound unreasonable until one realizes that networks have become extremely narrow (network tiering), effectively squeezing out anyone not approved by the insurer (network steering). This is also an unethical workaround to the 2021 No Surprises Act, which ensures that patients pay favorable in-network rates for OON care. Necessary medical services—like radiology, pathology, anesthesia, and emergency medicine—are often rendered by independent contractors that should not be excluded from the same in-network reimbursements as all other necessary medical services. However, insurers are persistently pushing them OON. The effect of this latest Anthem maneuver is to circumvent the No Surprises Act by penalizing hospitals unless they marginalize physicians, diminishing their professional autonomy and consequently threatening patient access.
You may have noticed that insurers seem to be calling all the shots, pushing around not only patients but also doctors and even hospitals. You may have noticed that it’s harder for you to get the coverage you’ve come to expect and have paid dearly for. It’s become a classic case of the tail wagging the dog. Insurers set the rules, the providers of health care have to jump through hoops, and patients are faced with delays and denials. And in a battle of wills, the industry knows it has the resources to outlast and exhaust patients and doctors.
It’s true that smaller organizations get pushed around more easily, but if you think insurers are hesitant to poke the big health care systems, you’d be wrong.
In March of this year, New York’s Mount Sinai Health System, one of New York City’s largest, was forced out of Anthem’s network. According to a Mount Sinai spokesperson, “Anthem refused to commit to contract provisions designed to protect patients from excessive denials, delayed determinations, and prolonged administrative disputes. Mount Sinai cannot accept terms that undermine patient care or destabilize our system.”
One may be tempted to ask: Why pay premiums at all if they primarily end up padding the bottom line of the payers to the tune of multibillion-dollar profits? It’s a good question. Professional societies, state legislatures, and the U.S. Congress have been raising the alarm in recent years and demanding answers from the health insurance industry.
Pathologists are one of several specialties often threatened by insurers with OON status. The CAP released a white paper in 2024, “Examining the State of Health Care’s Private Payers and the Adverse Impact of Insurance Interference,” which highlighted the following comment of then-CAP president Donald Karcher, MD, in a letter published April 28, 2024 in The New York Times: “Whether it’s through third-party entities . . . or using tactics such as narrow provider networks and restrictive prior authorization policies, insurers have the perverse incentive to boost revenue over offering adequate payment for adequate patient care under the guise of ‘controlling costs.’”
In January of this year in the state of Virginia, House Bill 424 and Senate Bill 745 were proposed to prevent insurer steering to their preferred laboratories instead of the one closest to the patient. In stirring oral testimony, CAP member Theresa Emory, MD, told the story of a cervical cancer patient whose biopsy diagnosis, and thus her treatment, was delayed almost a month because of such steering, after which “the patient showed back up at the doctor’s office bleeding. The tumor had doubled in size.” Fortunately, Virginia governor Abigail Spanberger, on April 8, signed both bills into law, giving a huge win to doctors and patients.
That the situation has grown out of control is reflected by a high-profile hearing held on the topic on Jan. 21 of this year in Washington, DC. The Energy and Commerce health subcommittee meeting featured a bipartisan grilling of the CEOs of some of the nation’s largest insurers, including Stephen Hemsley of UnitedHealth Group, parent company of UnitedHealthcare and the largest in the country.
Numerous representatives pressed him on justifications for the existence of a megacompany that not only monopolizes the market against competing insurers but also, through its subsidiaries, exerts anticompetitive controls over the entire health care ecosystem. One subsidiary, Optum, is the largest single owner of physicians in the U.S. Another, OptumRx, owns one of the three largest pharmacy benefit managers in the country. Other subsidiaries include group purchasing organizations, pharmacies, and even drug manufacturing companies, hospitals, and banks. Such massive consolidation of services, known as vertical integration, not only stifles market competition—thereby making health care more expensive—but also creates a conflict of interest in which all aspects of health care delivery lose autonomy and must fall in line with monolithic corporate policy.
Part of the 2010 Affordable Care Act was a provision called the medical loss ratio, which was to ostensibly incentivize cost savings by insisting that at least 80 percent (or 85 percent in large group markets) of an insurer’s premium dollars be spent on health care expenses, but no cap was set on premium dollars. This has resulted in the perverse incentive of actually raising costs. Insurers can increase their profits by increasing premiums. And a very effective way to do that is to vertically integrate and keep profits internal—and high. Tennessee Republican congresswoman Diana Harshbarger pointedly remarked, “That’s not competition. That is control. And that isn’t just participating in the market. It’s writing the rules of the market.”
The AMA’s 2025 update of its white paper, “Competition in Health Insurance: A Comprehensive Study of U.S. Markets,” states that 97 percent of commercial markets and 97 percent of Medicare Advantage markets meet the threshold for “highly concentrated,” meaning that a single insurer controls at least half of the regional market. Since leveraging the aforementioned ACA loophole, health insurance premiums, which once tracked inflation, have outpaced inflation by 90 percent, and health insurance industry stock prices have increased by more than 1,000 percent.
How much revenue are we talking about? In the case of UnitedHealth Group alone, it raked in about $400 billion in each of the past two years, and in 2025 CEO Hemsley received a one-time equity award of $60 million. With all that revenue, UnitedHealthcare somehow still manages to deny one-third of its claims to its sick patients, according to a KFF (formerly known as Kaiser Family Foundation) report. And one of the most draconian tools in its toolbox is Medicare Advantage, which has perfected the art of narrowing networks, erecting prior authorization and other administrative barriers, and delaying and denying care to patients who’ve paid in for years and whose care is now withheld when it is most needed.
Massachusetts Democratic congresswoman Lori Trahan in a frank exchange with the UnitedHealth Group CEO asked, “So, Mr. Hemsley, when United owns the insurer, the doctors, the pharmacy benefit managers, and the care delivery system end to end, where exactly is the competitive pressure supposed to come from to keep prices down?”
The CEO applied the same justification to every similar question before and after: variations on the theme of “vertical integration promotes value-based care.” If there were ever a situation where theory didn’t match practice, it’s right here, embedded in this cunning half-truth. In theory, economies of scale bring down prices, which is where Hemsley is hoping to direct the conversation. But everyone in the hearing knows, as he himself knows, and as anyone familiar with basic economics knows, that this theory works only in economies that are open, transparent, free, and competitive, none of which describes the tightly controlled, closed-system, vertically integrated empire that is United-Health Group.
So, what is to be done about it? Of course, continued governmental scrutiny needs to be sustained as a baseline, which will likely involve corrective legislation and regulation to disrupt these growing monopolies. But change is also feasible at a more granular level. Employers, who convey more than half of the U.S. population’s health insurance coverage, are decreasing their reliance on traditional insurance arrangements, replacing them with creative solutions like self-funding, health savings accounts, wellness programs, and individual coverage health reimbursement arrangements, keeping a traditional high-deductible plan in store only for catastrophic coverage. Individuals are also becoming more aware of the problem and bringing attention to it by engaging in personal activism and forming advocacy groups, like Joel White’s Council for Affordable Health Coverage, which seeks to reform the current system, or Physicians for a National Health Program, which seeks to replace it with a single-payer model.
However, one solution we don’t need is violence. The 2024 premeditated murder of Brian Thompson, former CEO of UnitedHealthcare, instantly brought this issue into alarming focus for millions of Americans. It revealed a deep-seated problem, solved in the wrong way. The resentment, pain, and even visceral antipathy of those who have been betrayed and hurt by a system built to protect them is undeniable, and there must be change. But it must be structural, not reactive. And structural change, lasting change, only comes through deliberative, educative, and collaborative effort.
Dr. Mezzetti is a pathologist and laboratory medical director at Charlotte Hungerford Hospital in Torrington, Conn. He is chair of the Connecticut delegation of the CAP House of Delegates and a member of the CAP Federal and State Affairs Committee. The views expressed in commentaries published in CAP TODAY are not necessarily those of CAP TODAY or of the College of American Pathologists.