The 42-day federal shutdown forced by Democrats thrust the economics of Obamacare into the limelight, and exposed an uncomfortable truth: An insurance industry whose executives are increasingly liberal donors has seen its earnings soar with the injection of taxpayer-funded subsidies that propped up Barack Obama’s signature health program from collapse.
The nation’s largest health insurance companies have seen good business since Obamacare was first passed in 2010 and fully implemented in 2014. This has come in no small part because of federal government subsidies to the insurance industry, which government estimates show totaled $1.8 trillion in 2023 alone.
Those subsidies were greatly expanded by the Biden administration during the COVID-19 pandemic as an emergency measure, but Democrats have fought to keep them permanent.
Obamacare brought health insurance companies historic profits
A Just the News analysis of public financial records from four of the nation’s largest health insurance companies found that net earnings ballooned about 216% from 2010 to 2024. UnitedHealth Group in particular, which dominates the industry with a market share of around 15%, saw the largest explosion of profits. The other three companies, Elevance, Centene, and Cigna also experienced a marked growth in net earnings after the implementation of Obamacare.
The healthcare legislation was also a boon for these companies’ stock prices. One study found the weighted average of health insurance stock prices has grown 1,032% from 2010—when the law was passed—and 448% from 2013—the year the legislation’s key provisions were implemented.
This performance far outstripped the most popular S&P 500 exchange-traded fund, which grew 251% and 139%, respectively, the Paragon Health Institute reported last year. ETFs are designed to track the performance of specific stock indices and, as such, generally represent average market growth.
The companies’ earnings success has drawn the attention of President Trump, who on Sunday called Obamacare a scam by Democrats that benefits the health insurance industry.
“Democrats claim to be working for ‘the little guy,’ and driving down your Health Insurance, but the OBAMACARE SCAM goes STRAIGHT TO THEIR BEST FRIENDS IN THE INSURANCE INDUSTRY. THEY ARE MAKING A ‘KILLING,’ while Health Coverage only gets WORSE,” Trump posted to Truth Social.
Take from the public and give to donors
“If Democrats get their way again, they’re in for another HUGE Payday at the expense of the American People. NO DEAL! Republicans should give money DIRECTLY to your personal HEALTH SAVINGS ACCOUNTS that I expanded in our GREAT BIG BEAUTIFUL BILL,” Trump added.
In recent years, individuals and PACs associated with these four health insurance companies have increasingly donated to Democratic presidential candidates—namely Biden and his vice president, Kamala Harris—whose administration expanded Obamacare subsidies, while contributing at much lower rates to candidate Trump.
The 2024 election illustrates this trend. Individuals associated with UnitedHealth Group contributed a total of $742,271 to Kamala Harris in the 2024 election, dwarfing the $158,000 received by the Trump campaign. Individuals associated with Centene contributed $225,622 to Harris and only $22,804 to Donald Trump. Individuals associated with Cigna sent $265,518 to Harris’ campaign compared to $99,930 to Trump’s. The only exception appears to be Elevance, which the records show did not make federal contributions in the 2024 cycle, according to OpenSecrets.
In earnings projections and investor calls, the insurance companies admit that fading subsidies would have a big impact on their bottom line. They have told their investors about plans to raise premiums on Obamacare plans and even exit markets to preserve their profit margins, showing how dependent the large companies have become on the government-backed exchanges.
Corporations admit they are reliant on public money
UnitedHealth Group CEO Tim Noel told investors in an Oct. 28 earnings call that if his company could not negotiate “sustainable” rates, it would withdraw from markets and raise rates. He estimated that these efforts would likely result in two-thirds of its Obamacare customers dropping enrollment.
“Where we are unable to reach agreement on sustainable rates, we are enacting targeted service area reductions,” Noel told investors. “We believe these actions will establish a sustainable premium base — while likely reducing our ACA enrollment by approximately two-thirds.”
Elevance, an Indianapolis-based insurance company, also cut its 2025 earnings guidance in July after increased healthcare utilization surged costs in government-backed programs, including both ACA markets and Medicare Advantage. Centene also pulled its guidance for investors, seeing market difficulty on the horizon.
The four companies did not respond to email requests for comment from Just the News.
“It is a form of corruption, it is a form of corporate welfare to very profitable insurance companies, and it has to stop,” Rep. Mariannette Miller-Meeks, R-Iowa, told the Just the News, No Noise TV show on Monday.
“More importantly, it doesn’t bring health care costs down. It may make it more affordable for one person, but it doesn’t have any incentive for the insurance companies to bring down health care costs. So all you’re doing is…that you’re continuing ratcheting up premiums, because the insurance companies are getting directly subsidized by the taxpayers,” she continued.
Unused insurance means more profit in insurance company coffers
The Obamacare insurance exchanges also have another major flaw that fuels corporate profits. About a third of all subsidized Obamacare health plans go unused by the insured, meaning these plans translate into pure profits for the health insurance companies, completely at the expense of the American taxpayer.
During the height of the COVID-19 pandemic, President Joe Biden signed into law a bill that enhanced the Obamacare subsidies broadly as an emergency measure, which opened the door for such over-coverage. It also raised the qualifying income cap for the tax credits to 400% of the poverty level or $128,000 for a family of four.
“These are not about the ACA subsidies, like the original Obamacare subsidies don’t expire,” Rep. Dusty Johnson, R-S.D., told the John Solomon Reports podcast. “This is about the COVID-era tax credits that layer on top of that, and the tax credits don’t go to Americans, they go directly to insurance companies.
He said, “many people can get free policies through these pancaking layered tax credits,” and some “people don’t even realize they’re double covered” because of deceptive sales tactics.
“40% of these policies have never had a single claim applied to them. It’s amazing […] It shows that these are phantom policies, people aren’t using them, they aren’t making Americans healthier. Instead, they are just checks written to the insurance companies,” Johnson said.
This expansion “often [resulted] in federal taxpayers footing the bill for all, or nearly all, premium costs for silver and bronze plans, as well as gold plans,” the Paragon Institute concluded. Bronze, Silver, and Gold describe increasing levels of insurance plans that decrease deductible costs and lower cost-sharing as you climb the rungs.
35% of enrollees never file a claim
“Large insurers benefit greatly from phantom enrollment, as they collect billions of dollars in taxpayer funds to cover individuals who cost them nothing,” wrote Niklas Kleinworth, Liam Sigaud, and John Graham in a Paragon Health Institute policy brief last month.
The data show that nearly 12 million enrollees, about 35% of all people enrolled in the Obamacare exchange, are actually zero-claim enrollees. This means that their health coverage did not translate into actual health care.
Paragon found that the average profile of these enrollees is someone who is healthy and likely does not need full coverage for care. Additionally, the researchers identified worrying data that many were enrolled in full coverage without their knowledge, raising fraud concerns and leaving taxpayers to pick up the tab.
But what caused this pattern of perverse incentives? The expanded Obamacare subsidies that are now at risk due to the government shutdown, the researchers say.
“Our analysis shows that these enrollees are not just healthy enrollees with no need for care. They are part of a larger story about how Biden COVID credits are driving perverse incentives,” the Paragon authors wrote.
Steven Richards joined Just the News in August 2023 after previously working as a Research Analyst for the Government Accountability Institute (GAI) in Tallahassee, Florida.
Reprinted with permission from Just The News by Steven Richards.
The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.
As stated, in other articles, Obamacare was only designed to drain the government into more debt and waste taxpayer money as the plotters became richer. Participants were totally mislead by the Democrats who continue to deceive these people with their false rhetoric. Obamacare just needs to be scrapped permanently.
I have said for years that the insurance companies run this country. Now I know I was right. It’s about time they topple these insurance blood suckers. No wonder there are so many insurance ads on TV, many, many phone calls I get from companies wanting me to enroll with them. And they should NEVER be allowed to donate to any political party. Talk about buying favors Obama care was a terrible idea to begin with, and it has only gotten worse. It’s time to end this attempt at socialized medicine. It does not work
How could all this be true??? Remember Nancy saying, “We have to pass it to find out what’s in (the Obamacare Bill)”. Americans drank the KoolAid, now they have stomach cancer being diagnosed as indigestion.
How can premiums sharply go up? Obama and lucky stock-trader Pelosi assured us that premiums would DROP by $2500 a year. Surely they didn’t LIE to the American people? I wonder if Obama and Pelosi are getting THEIR insurance through the ACA?
We ought to know by now that anything the government pays for cost more, a lot more. And any type of insurance; car, house, or health care insurance often goes unused for years. It’s a gamble, a risk, it’s the unwatched kettle of water. But unfortunately Health insurance is a necessity of life and it’s complicated. Seniors need a little more protection and council to select a health care policy that can meet their needs. especially for seniors on a fixed income. It’s easy to say send the money directly to me and let me do the research and select the best deal for me. Many of us can do that and for those it might be a good deal. But, many of us will fail to read the fine print and get suckered into a deal that favors the insurance company who will sell your policy to a finance company whose primary focus is to make a profit. Co-pay? How does someone who’s already barely squeaking by on social security going to cover co-pay, medicine and follow-up visits. Let alone – physical therapy? Obama Care sucks but before we cut it off we need to come up with something better. We need to get our priorities straight – America First.
I watched the congress hearings – the dems were lying and manipulating the facts to make it look like the republicans are taking away from the people, etc. They are loading their followers with BS to keep them voting dem. It is an eye opener. I wish Elon would buy a main stream media like CBS or CNN and always tell the truth, so dems could get facts.
I always suspected Obamacare was a scam that benefited both the people pushing it in congress and the providers (insurance co.s). It is yet again another rip off by our government leaders that tagged the tax payers and pushed this nation further down the road to govt. run health care. Only a blind person would not see it….and for me, even the “supposed conservatives” in our govt. were in cahoots somewhere along the way. Now the job of rooting out this mess and perhaps replacing it with something better suited to the people could come. But we all know our government is sorely corrupted across the board, so don’t expect much. Most of us have no protection against what these “leaders” pull and can only suffer through their scams and greed. While America is still the best place to live, that idea is getting challenged daily because of our elected con-men and women. I looked at some of the net worth on these people and most of them are worth tens, if not hundreds of millions since taking office….even the first term members have become millionaires almost overnight. We pay them three to four times the national average income and they still can’t seem to keep their hands out of our pockets. Pretty sad. Makes you mad.
One thing never mentioned is the deductible which way too many can’t afford. My daughter can’t afford for her family to seek medical care except in the case of some sort of medical emergency. She is a family of 6 with one paycheck. Her health sucks and I worry constantly. With thousand of dollars in deductibles required there is no way to get medical care except as an emergency option. Their account would be one of the ‘phantom’ accounts. Only claims made that are not covered because of the ridiculously high deductible.
Obamacare is the pie in the sky, anyone falling for it must have seen little pgigies flying around.
If this is true, are those insurance companies writing these “phantom” policies being investigated? I paid higher premiums for a bronze plan with a $13500 deductable than any house payment I ever paid. Health insurance companies need to be answering some serious questions.
I knew this from day one of the start of the ACA —maybe too many people weren’t noticing because healthcare coverage came as a given benefit of a lot of jobs but happened to have a job that didn’t offer healthcare coverage because I chose to get more in my paycheck upfront and paid for my own healthcare insurance plan. Immediately after the ACA started in 2010 and by the time the mandates went into place in 2014, the premiums were ridiculously too high, especially since I earned according to their income chart “too high of a yearly income “ to get any subsidy aid, my healthcare plan premiums tripled in cost and I got less coverage on top of that, especially since I was in what they call the “donut age” too old to get regular healthcare coverage and too young to get Medicare and on top of that I “earned too much income for Medicaid. I was left without healthcare coverage for almost 5 years because I couldn’t afford the premiums for the few doctor appointments I would have yearly—why should I pay $10,000/year in premiums for one doctor visit who wasn’t even a specialist—most healthy people don’t see a doctor for more than an annual well care visit. Perhaps if I had the extra money in my budget after paying all my necessity bills I might have prevented the heart problems that I am dealing with now during that 5 years of no healthcare insurance. The ACA was presented as being the better economic model but it was not that reality in cost in the NYS area where healthcare premiums were the highest Nationwide—even AOC complained about that until she got the memo about the affordable coverage given all our elected representatives and now she’s complaining about losing her subsidy for her healthcare coverage which we are paying for. Stop all the subsidies and let them run out and let Congress revise how much those premiums should be paid for and put the money of the subsidies in the all the people who pay for their healthcare coverage. Those people who get Medicaid for “free” will not be affected if they qualify correctly without loophole adjustments—in other words, no disabled, young child, seniors would lose coverage but only those who don’t qualify. And that includes elected representatives who do earn high enough salary to pay for healthcare coverage off the same website that everyone else gets their healthcare coverage from
System rigged against US & for DC
Just creepy really. When I was in High School back in 2010, I did a presentation on the then new Obamacare Act for English class saying that, in short, it would do nothing for American citizens. If I could’ve gotten myself to try and read more of the bill instead of just first few pages, maybe I could have warned people.
You forgot to mention how Chicago and other cities are using subsidized Obamacare to offload a substantial portion of their retiree health care coat
Please don’t just look at the “dollar” but I have personally experienced a dangerous event because the healthcare CEO’s, etc. cut cost to save money while the insurance companies were reaping it in, somehow. It was/is frightening!
Obamacare is, and has been since inception, the most transparently corrupt raid on the public coffers ever perpetrated against the American people. I have a problem understanding why, only now are people admitting this. I’m just an everyday heavy equipment mechanic, and I saw through this scam from day 1.
Obamacare, or more correctly Obamacrime, had a number of goals, none of which was to provide improved healthcare at an affordable price.
First, the scam was designed to make a lot of money for Obama and those who were in the know, ahead of time, of which insurance companies got the government blessing. Remember Obama’s obvious irritation when the exchange website failed? remember his disdain when young people were deciding to pay the fine instead of purchase useless “insurance”? This scam relied on the subsidies being paid for low wage earners and the plans being totally useless due to high deductibles. But the subsidies always got paid, except when they didn’t due to website problems and people deciding to not purchase plans.
Second, the most obvious goal was the transfer of our tax dollars into the pockets of insurance companies and then into the hands of Democrat campaign funds.
Third, the system was designed to destroy our current healthcare system. Remember Obama lying to us, “if you like your insurance you can keep it, if you like your doctor you can keep them.” Then remember when the insurance companies cancelled your policy.
Fourth, the scam was designed to grow to the point where the subsidies overtook the need for any premium payments from anyone, and guess what? The subsides then would become SOCIALIZED MEDICINE.
And the pigs would be trapped in the pen!
I just wonder if this stuff can be proven ??? I personally believe it to be true!!!! Why haven’t the gov tried to claw back this money ??? why haven’t the DOJ filed any fraud cases ???? If they trace this to it’s origin I would be willing to bet Obama if involved!!!! How many lies did he tell to the American public????
I heard about this on Fox today and was furious!! Stupid of me to think the radical liberals were trying to do ANYTHING good!
The Democrats are masters at money laundering.
I knew this all along! Not news to me. Obama did not become as rich as he and his wife are off of his presidential retirement and a few books!
So many of you have effectively explained the workings of the Unaffordable Care Act that our own Republican representatives have failed to explain. Many of you should be on the talk programs to effectively explain the crime being committed against we the people. Thank you all for clarity on this subject.
Unfortunately Marketplace insurances the only way that I can afford it so at the end of the year when the rates skyrocket I will be without any sort of insurance as my work doesn’t offer it in there aren’t many jobs in my area
Total wealth, not just income, must be considered as a criterion for ACA subsidy eligibility. Millionaires can qualify for subsides by limiting their adjusted gross income.