 |
| News |
“Whenever you find yourself on the side of the majority, it is time to reform (or pause and reflect).”
― Mark Twain
Subscriber Comments
US Healthcare Is Totally Broken
Employees may face steep increases in health insurance costs during this year’s open enrollment period. According to Mercer, workers will likely pay 6–7% more for their 2026 employer-sponsored health plans, more than twice the current inflation rate. That translates to roughly $2,400 a year for single PPO coverage and $8,900 for family plans. Employers are expected to spend about $18,000 per worker on coverage, while employees typically pay 16–25% of the total cost.
Rising expenses are driven by factors such as an aging workforce, higher demand for costly treatments like GLP-1 weight-loss drugs, and inflation in provider wages and medical goods. Employees may also see higher deductibles and co-pays.
With health care prices “sticky,” according to Mercer, these increases could deepen the financial strain on families already burdened by rising costs for essentials like food and housing. The U.S. continues to spend roughly twice as much on health care as other developed nations, despite poorer outcomes—a gap worsened by system complexity and reduced market competition. Four in ten insured adults under 65 say they worry about affording their monthly premiums.
Click to Read
Use your Subscription Level Access Code to access the full review.
Republicans blame Democrats, and Democrats blame Republicans. What is going on?
The steady rise in family health insurance, a trend that baffles the majority, is a product of how the U.S. healthcare system was designed. The Affordable Care Act (ACA), despite all the hype, not only did not break the system, but it also locked in incentives that make it nearly impossible for costs to fall. Employer health insurance, for example, isn’t truly a benefit, but rather a deferred pay. Employers don’t absorb the difference when healthcare costs rise. They raise employee contributions, or hold back on raises. The illusion of coverage stability over time is paired with falling wages and reduced standard of livings.
The ACA aimed to expand access and fairness by banning lifetime coverage caps, expanding preventive care, and requiring insurers to cover everyone at similar rates. These reforms increased the baseline cost of every plan. Insurers, unable to compete on risk due to legislation, started competing on brand and provider networks. The “medical loss ratio” rule, meant to protect consumers by capping profits, created unintended consequences. It turned health insurance into a cost-plus business, meaning insurers earned more when overall costs rise. This new dynamic removed incentives for insurers, hospitals, or drugmakers to push prices down. All of them benefit from rising spending.
Pricing power in healthcare now rests with hospitals, physician groups, and drug companies. Consolidation has created a near-monopoly control over local markets, allowing hospitals to dictate prices to insurers. Meanwhile, the growth of expensive specialty drugs and chronic disease treatments has made medical inflation structural, not temporary. The ACA never addressed this consolidation, or the root pricing power behind it. Why? Politicians do not understand the invisible hand, and the unintended consequences of the legislation they create. This is why premiums keep climbing even when overall inflation cools. The public remains outraged at the rising premiums, but they fail to associate the legislation that caused it.
Mark Cuban’s Cost Plus Drugs targets opacity, one of the few vulnerabilities in the post-ACA healthcare system. By bypassing pharmacy benefit managers (PBMs), the middlemen who skim hidden rebates from every transaction, the company sells medications at true cost plus a transparent 15% markup, a modest handling fee, and shipping. This straightforward approach lays bare the egregious inflation baked into traditional drug pricing under the ACA. A generic that costs $5 to manufacture can retail for $100, not due to production expenses, but because of opaque layers of secret markups and kickbacks. Cuban’s new partnership with TrumpRx (an endorsement for neither) could help scale this model and force big pharmacies and insurers to reconsider their strategies, yet it remains a modest foothold in a $4.5 trillion industry.
The U.S. healthcare system is built to reward rising costs. Every major player, hospitals, insurers, and pharmaceutical companies, profits when prices go up. Until incentives are realigned toward transparency and affordability, premiums rising faster than wages will continue to erode standard of livings. Mark Cuban’s will likely not fix the healthcare system overnight, but by refusing to play by its opaque rules, he’s exposing the illusion of fairness built on complexity. True disruption in healthcare typically does not start will policies or laws, it starts with free market competition driven by the invisible hand.
Follow me on 𝕏 or Facebook for further discussion.
----------------------------------
The Matrix provides market-driven trend, cycles, and intermarket analysis.
