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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

Aug 10, 2021 - Health

Democrats' high-stakes fight against pharma

Illustration: Sarah Grillo/Axios

Democrats' proposed expansions to health coverage and other patient-friendly policies released Monday are reliant on successfully taking on one of Washington's most powerful industries: pharmaceutical companies.

Between the lines: The way Democrats have set up their reconciliation package likely forces them to pass significant prescription drug pricing reform if they want to also pass other measures designed to make health care more affordable — a key selling point for the entire package.

The front-runners for Biden's Supreme Court pick

Judge Kentaji Brown Jackson (left) and Justice Leondra Kruger (right) Tom Williams-Pool/Getty Images and Lonnie Tague, US Department of Justice

Two highly accomplished Black female judges — Ketanji Brown Jackson, a judge on the D.C. Circuit Court of Appeals; and Leondra Kruger, a justice on the California Supreme Court — are seen as the early front-runners to replace retiring Supreme Court Justice Stephen Breyer.

The big picture: Jackson is a powerful federal judge with a record that progressives feel they can trust. Kruger was a highly regarded litigator and has carved out a reputation for working well with conservative judges.

Fed: Rate hikes are near

The Federal Reserve's headquarters building. Photo: Anna Moneymaker/Getty Images

The Federal Reserve is on track to raise its main target interest rate in mid-March, as Chair Jerome Powell pledged to be "humble and nimble" in adapting policy to a fast-changing economy.

Why it matters: Fed leaders are looking to choke off inflation by raising interest rates in the near future, but keeping its options open for how fast and far the effort will go.

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