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Expand chart
Data: Company documents; Chart: Will Chase/Axios

UnitedHealth Group isn't just making more money because people deferred care throughout the coronavirus pandemic. It's making more money because it's owning a bigger piece of the health care system.

The bottom line: Insurers keep more of the premiums they collect when they also own the medical providers that are paid those premium dollars. And no insurer has expanded as aggressively into care delivery over the years as UnitedHealth.

Zoom in: Each quarter, UnitedHealth reports what it calls "intercompany eliminations."

  • This is when money transfers from one part of the company to another. UnitedHealth can't record the transaction as revenue because it is just paying itself.
  • For example, if a worker with UnitedHealthcare insurance goes to a surgery center or physician practice owned by Optum? That's an intercompany elimination. A 70-year-old with a UnitedHealthcare Medicare Advantage plan fills a prescription through Optum's specialty pharmacy? That's one, too.

By the numbers: UnitedHealth recorded $43.8 billion of eliminations in the first half of 2021, putting it on pace for roughly $91 billion for the entire year.

  • That amount would be four times as much as the eliminations UnitedHealth recorded a decade ago.

The big picture: Federal law caps health insurance profits to 15-20% of collected premiums, depending on the type of market.

  • But there are no limits to how much profit a provider can keep. So if an insurer can steer its members toward its own providers, the company is able to keep a lot more of those premium dollars.
  • It's no surprise, then, that other insurers like Bright Health are mimicking what UnitedHealth has been doing.

Go deeper

Jul 15, 2021 - Health

Patients getting more care trims UnitedHealth's profit

UnitedHealth registered $71 billion of revenue in Q2. Photo: Rafael Henrique/SOPA Images/LightRocket via Getty Images

UnitedHealth Group collected $4.3 billion of profit in the second quarter, a 36% decline from the health care conglomerate's historically profitable second quarter last year, when the coronavirus suppressed care and led to the company paying out fewer medical claims.

Yes, but: The company's revenue in this quarter soared 15% year over year, and the $4.3 billion of profit was still 30% higher than the same period in 2019, before the coronavirus hit. UnitedHealth remains the most financially powerful private entity in the health care system.

1 hour ago - World

Biden: U.S. combat mission in Iraq will end this year

Biden returning to the White House on July 25. Photo: Samuel Corum/Getty Images

The United States' combat mission against the Islamic State in Iraq will be completed "by the end of the year," President Biden said Monday prior to a meeting with Iraqi Prime Minister Mustafa al-Kadhimi.

Why it matters: Biden is close to shifting the U.S. military mission in Iraq to a fully advisory role more than 18 years after combat troops were sent to the country under the former President George W. Bush.

How extreme weather feeds inflation

Illustration: Annelise Capossela/Axios

This summer's extreme weather is having ripple effects that could raise food prices in the U.S. and disrupt diets around the world.

Why it matters: Climate scientists and food supply experts, like those at the Food and Agriculture Organization (FAO) in Rome, have long warned about the impact of human-caused global warming on prices, food shortages and hunger.

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