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The Bank of Big Medicine by Olivia Webb Kosloff and Emma Freer
During back-to-back con]gressional hearings last month, lawmakers grilled the CEOs of five major health insurers about their vertically integrated business models. Rep. Alexandria Ocasio-Cortez (D-NY) called for breakup legislation modeled on the 1933 Glass-Steagall Act, which structurally separated commercial and investment banking.
The idea of bank-style regulation for health insurers isn’t as far off as it sounds. As Rep. Cliff Bentz (R-OR) pointed out, insurance companies take in premiums and invest that money—known as “float”—before having to pay it out in claims. “That, of course, is what leads to people calling insurers banks, doing a side business as health care,” Bentz explained. “[Y]ou charge the premium, you collect the money, you put the money in the bank, it earns interest, and then you pay it out.”
"Banking offers much higher profit margins and federal subsidies than either the insurance business or health care services."
Rep. Greg Murphy (R-NC), co-chair of the GOP Doctors Caucus, took this a step further, pointing out that insurance giant UnitedHealth Group actually owns a bank, Optum Financial, which provides health savings accounts (HSAs) to consumers and loans to providers. “Good God, you own a bank,” Murphy said during the second hearing. “Why would an insurance company own a bank?”
The congressmen have a point. Insurance conglomerates have quietly transformed by chartering banks to generate interest and junk fees, partnering with an HSA provider for the same reasons, or playing financial games to maximize float. Their motives are clear: Banking offers much higher profit margins and federal subsidies than either the insurance business or health care services. And because they are not primarily financial institutions, they avoid banking regulations meant to protect consumers, workers, and taxpayers from undue risk.
The idea of bank-style regulation for health insurers isn’t as far off as it sounds. As Rep. Cliff Bentz (R-OR) pointed out, insurance companies take in premiums and invest that money—known as “float”—before having to pay it out in claims. “That, of course, is what leads to people calling insurers banks, doing a side business as health care,” Bentz explained. “[Y]ou charge the premium, you collect the money, you put the money in the bank, it earns interest, and then you pay it out.”
"Banking offers much higher profit margins and federal subsidies than either the insurance business or health care services."
Rep. Greg Murphy (R-NC), co-chair of the GOP Doctors Caucus, took this a step further, pointing out that insurance giant UnitedHealth Group actually owns a bank, Optum Financial, which provides health savings accounts (HSAs) to consumers and loans to providers. “Good God, you own a bank,” Murphy said during the second hearing. “Why would an insurance company own a bank?”
The congressmen have a point. Insurance conglomerates have quietly transformed by chartering banks to generate interest and junk fees, partnering with an HSA provider for the same reasons, or playing financial games to maximize float. Their motives are clear: Banking offers much higher profit margins and federal subsidies than either the insurance business or health care services. And because they are not primarily financial institutions, they avoid banking regulations meant to protect consumers, workers, and taxpayers from undue risk.
https://prospect.org/2026/02/11/bank-medicine-health-insurers-united-health-optum-financial/
