Every year, millions of patients pay their health insurance premiums, trusting their insurer will be there to support them if something happens. What they don't know is that the same company they’re depending on is pocketing their premiums and taking a cut of their prescription payments. For the tens of millions of Americans enrolled in UnitedHealthcare plans, their prescriptions are being routed through UnitedHealth’s own pharmacy benefit manager (PBM), OptumRx, generating billions in financial windfall.
Unfortunately, UnitedHealth is not an outlier but the blueprint for major health insurers. Across the country, the same vertical integration model, where an insurer operates through its own PBM—which also owns a pharmacy—has quietly become the routine structure of American healthcare and the reason patients continue to be charged outrageous prices at the pharmacy counter. This model lets one company set the price, choose the drug, and pocket the difference, with no market check on any of it. As this consolidation has grown, competition has shrunk, driving up costs, reducing competition, and eroding transparency.
Healthcare affordability depends on transparency and choice. Competitive markets provide consumers with greater options, reward investment in innovation, and hold companies accountable, leading to lower prices over time. But vertically integrated mega-insurers offer none of the above. Instead, they grant patients little visibility into the decision-making process while single-handedly setting premiums, controlling drug coverage and cost, and dictating which pharmacy a patient can use.
The result is a system where decisions that directly impact patients are made behind closed doors, leaving patients to navigate costs and coverage rules they didn’t choose. When the same corporation is present at every stage of the transaction, it becomes increasingly difficult for patients to know whether decisions are being made in their best interest or in the interest of maximizing corporate revenue.
Fixing rising healthcare costs means accountability shouldn’t stop with only insurers. It must also extend to organizations that have profited from a business model that reduces competition, obscures costs, and leaves patients with fewer choices.
This is where AARP enters the picture. By leveraging its trusted brand with UnitedHealth, AARP has collected an estimated $10.8 billion in tax-free revenue from the mega-insurer since 2007 and become not a bystander, but an influential player in a system working against patients.
For decades, AARP has cultivated a reputation as one of the nation's most trusted advocates for seniors. Yet in 2024 alone, UnitedHealth paid AARP an additional $9 billion for the right to market insurance products under its trusted name. That fee structure gave AARP a direct financial stake in the volume and cost of coverage sold to its own members. The more seniors pay in premiums, the more AARP collects, creating an incentive to protect the partnership, not challenge the practices driving up costs. Even AARP’s own members are skeptical of the partnership. A 2023 survey found that 85.2% of members were concerned about the financial relationship between AARP and UnitedHealth, and more than 75% agreed that the “royalty fee” arrangement creates a potential conflict of interest—and their intuition is right.
While AARP insists its policy positions are developed independently of its financial relationships, there has been an increased reliance on its corporate partnership revenue with UnitedHealth. In 2024, membership dues fell to 14.9% of AARP’s operating income from 28.9%, while marketing income grew from 35.6% to 62%. An organization that has grown deeply dependent on UnitedHealth revenue would surely find it difficult to advocate for transparency and competition reforms that would benefit seniors and threaten its partner's bottom line.
The policy stakes for this business model are real. Meaningful reform, whether through PBM transparency requirements, cracking down on vertical integration, or enforcing stronger antitrust standards, would directly disrupt the enormously profitable arrangement for UnitedHealth and AARP. Every year reform is delayed is another year patients overpay, another year competition fails to be incentivized, and another year the organizations best positioned to demand change continue to turn a blind eye for profit.
Americans would like to believe that somewhere in the healthcare system, someone is looking out for them. The truth is that the biggest players have built billion-dollar enterprises on the back of our healthcare system. Real advocates don't profit from the problem they promise to fix. Until the ties between big insurers and their financial partners are exposed, patients will keep paying the price of our healthcare oligopoly.
Andrew Langer is the Executive Director of the Coalition Against Socialized Medicine (CASM).
