Mapping vertical integration in US health insurance

Introduction

Vertical integration in health insurance is widespread in the United States. Major insurers now control large parts of the health care supply chain. That includes pharmacy benefit managers (PBMs), physician practices, clinics, home health services, and ambulatory surgery centers. Some observers see the growing integration as a mechanism that allows for greater data sharing, care coordination, and efficient matching of patients to treatment. In contrast, others have pointed to the increased opportunities to game regulations and hide profits through so-called “tunneling.” In the charts (and spreadsheet of related entities) displayed here, we seek to describe the extent of vertical integration involving major health insurers. The charts offer a picture of the potential linkages that may offer improved synergies across the supply chain. They also point to opportunities to create financial flows that avoid regulations like those tied to Medical Loss Ratios (MLRs). We focus on a set of five major health insurance organizations: CVS-Aetna, Elevance, Humana, Kaiser, and UnitedHealth Group. These five insurance companies account for 69% of Medicare Advantage enrollment, 46% of commercial insurance enrollment, and combined they insure about 126 million members.¹

Observation from the charts

CVS

CVS reported total operating revenues of $399.8 billion in 2025. Of that total, $141.5 billion, or roughly 35%, originated from the insurance segment of the business. Health services that include the Caremark PBM generated $190.4 billion in revenues, of which $181.1 billion stemmed from Caremark and $9.3 billion came from company-owned providers such as Oak Street Health and CVS MinuteClinic. The health services segments received $25.8 billion (13.6%) in payments from related entities. The CVS-owned pharmacies and retail locations had revenues of $139.4 billion, of which $45.6 billion (32.7%) involved payments from related entities.

Elevance

Elevance reported $197.6 billion in 2025 operating revenues. Of that total, $166.0 billion (or 84%) consisted of revenues collected by the health insurance segment of the business by external customers. The CarelonRx PBM collected $43.4 billion in revenues, of which $18.9 billion (43.6%) was paid by related entities. The health services segment of Elevance’s business that included behavioral health services generated revenues of $28.3 billion, which included $21.2 billion, or about 75%, paid by related entities.

Humana

Humana’s operating revenues in 2025 amounted to $128.7 billion. Just over 96%, or $123.8 billion, came from health insurance sales. The other divisions that included home health, pharmacy services, and primary care practices, generated revenues of $22.5 billion, which included $17.7 billion (nearly 79%) in payments from related entities. The home health subsidiary collected $3.5 billion in revenues that were mostly paid by Humana insurance plans (60%). The pharmacy solutions segment realized $13 billion in revenues, of which $11.7 billion (90%) was paid by related entities. The primary care segment included CenterWell Senior Primary Care, which earned $6 billion in revenues, $3.8 billion (63%) of which came in payments from related entities. The Humana PBM does business almost exclusively with the Humana Insurance segment. Therefore, in this chart and in the 10-K, PBM revenues are included in the insurance segment.

Kaiser Permanente

Kaiser Permanente represents an organizational structure that is markedly different from those of the other organizations described here. Kaiser Permanente reported 2024 revenues of about $115.8 billion. The Kaiser Health Plans realized about $105.3 billion in external revenues. The Kaiser Foundation Hospitals are separately incorporated. They receive at least $34.2 billion in payments from Kaiser Health Plans and earn about $4.3 billion from external (non-Kaiser) sources. They also make $6.6 billion in payments to the Kaiser Health Plans, possibly to insure their employees. The Permanente Medical Groups receive at least $33.3 billion in payments from the Kaiser Health Plans and likely also receive payments from the Kaiser Foundation Hospitals, but those are undisclosed.

United Health Group (UHG)

UHG reported 2025 operating revenues of $443.6 billion. About 77% of these revenues originated from health plans (UnitedHealthcare), or $342.7 billion. UHG has three divisions in addition to the health plans. They include health services largely under the umbrella of Optum Health, technology and consulting services under the Optum Insight umbrella, and the Optum Rx PBM. Optum Health had revenues of $100.5 billion, of which $63.6 billion (63.3%) was paid by related entities. Optum Insight collected $19.3 billion in revenues; $12.9 billion (67%) was paid by related entities. Optum Rx earned $154.6 billion. UHG reports that $96.9 billion, or just under 63%, was paid by related entities.

Comment on the charts

The data and structures represented by the charts summarize, at a high level, the fact that substantial segments of spending within each of the health insurance organizations examined involve related entities. The attached spreadsheet lists the subsidiaries owned by each of the health insurance organizations. Those lists contain hundreds of subsidiary firms, or over 2,000 in the case of UHG. The data show that there are rich opportunities to organize care so that there are synergies that could benefit patients and payers alike. These same data reveal that there are also abundant opportunities to game regulations, hide profits through tunneling, and foreclose markets to rivals at various levels of the supply chain.

Financial chart methodology for public companies

For UnitedHealth Group, Elevance, CVS, and Humana, all financial data are from the U.S. Securities and Exchange Commission (SEC) 10-K filings for the fiscal year (FY) ending December 31, 2025. Each of these companies reports information about the revenues of their individual business segments. They do so in a table which includes revenue received from both external customers and affiliates (i.e., intersegment payments). Going forward, we refer to this as the segment financials table.

Names of the segments are regularized for cross-comparability. For instance, UHG’s “UnitedHealthcare” segment is labeled “Insurance,” and Elevance’s “Health Benefits” section is labeled “Insurance and Health Benefits.”

As noted in the footnote of the charts, only external customer revenue is included in the consolidated operating revenue total at the top of the chart. Arithmetically, consolidated operating revenue is the total of external revenue from each business segment. This consolidated figure represents actual sources of business revenue for the company and not internal transfers.

Another potential source of external revenue reported in the segment financials table is investment. However, not all companies report investment in the same way, so investment numbers are not cross-comparable. To facilitate comparison, investment revenue is not included in the segment revenue or consolidated operating revenue total. Investment revenue represents no more than about 1% of revenue for any of the corporations considered, so choosing to exclude it does not represent a serious distortion of corporate revenue.

Each company reports an insurance segment, which is included on the far left of each chart. For Elevance, the Health Benefits (i.e., insurance) segment did not directly report intersegment payments received, but the number could be readily inferred from the segment financials table.

Each company also reports a corporate segment in the segment financials table. The corporate segment is not included in any of these charts as a distinct visual entry since external revenues from the corporate segment are often zero and they always represent less than 0.05% of external revenues. However, the corporate revenue is reflected in the consolidated operating revenue amount at the top of the chart where it exists.

Outside of the insurance and corporate segments, each of these companies reports at least one non-insurance segment which may include PBMs, technology, health care providers, or retail services. These non-insurance segments may contain subsegments. Where subsegment information is available, subsegments are grouped together inside a lighter box. For the Optum segment in particular, Optum received $168 billion in intersegment payments overall, but the individual intersubsegment payments add up to $173.4 billion. This is because some of the intersegment payments that the Optum subsegments received were from other Optum subsegments, and those are subtracted to avoid double counting.

The nature of segments and subsegments can vary between companies, so the business conducted by similarly named segments should not be assumed to be exactly comparable. Interested readers can consult segment descriptions in the 10-K for more details.

Subsegment financials are only reported directly in the segment financials table for UHG and Elevance. For Humana, subsegment information was reported in a separate table and combined with the segment financials table to produce the chart. For CVS, subsegment information was inferred from other data in the 10-K, so a reliable estimate of the intersegment revenues received by certain subsegments was not possible.

Note on pharmacy benefit managers

Pharmacy benefit managers are an important component of the vertical integration strategy for UHG, Elevance, Humana, and CVS. We make it a point to try to provide as much data as possible on PBMs. However, the coverage of PBM activities in the 10-K is not the same for each of these companies.

While UHG and Elevance include PBM external and intersegment revenues directly, information on PBM revenue is only partially available for CVS, and intersegment payments cannot be easily estimated.

No financial information about Humana’s PBM, called Humana Pharmacy Solutions (HPS), is reported directly in the Humana 10-K. Instead, Humana includes HPS activity within the insurance segment. In its Fourth Quarter 2024 SEC report, Humana stated that “[Our] PBM activity is intercompany and is reported and eliminated within our Insurance segment.” Further, Humana reports at most $1 billion in non-premium external revenue entering its insurance segment on page 6 of the Humana 10-K. Since HPS does not take in premium revenue, this implies that less than $1 billion of Humana’s external revenue comes from HPS. HPS appears to exist essentially exclusively to service Humana affiliates.

Financial chart methodology for Kaiser

As a consortium, and not a public company, Kaiser does not release an equivalent of the segment financials table that public companies include in their 10-K. For this reason, our Kaiser chart may be a useful breakdown of Kaiser’s structure, but it is not readily cross-comparable with the public company charts. For instance, the Kaiser chart incorporates investment revenue into the consolidated total, since that data could not be easily disentangled from total revenue.

Importantly, all Kaiser numbers are also for the year ending December 31, 2024, while the public company charts are for 2025. We were able to find combined audits for Kaiser, including an audit from 2024. In addition, we used IRS Form 990 information, which was reported for 2024 (2025 numbers were not yet available).

The combined audit provides direct numbers on Kaiser’s total revenue; it also breaks out Risant Health from other revenues. Risant represents a small share of revenues for Kaiser, but it is structurally distinct and so is broken out separately at the bottom of the chart.

The combined audit and general knowledge of the Kaiser structure make clear that outside of Risant, almost all Kaiser revenues flow into the company as premiums paid to Kaiser Foundation Health Plans (KFHPs). These KFHPs are nonprofits, so they report financial information on the IRS Form 990. The Form 990s contain revenue information and information about payments to affiliated entities.

To arrive at total revenue generated by the KFHPs, the information available from the various Form 990s was added up and sanity-checked against the audit. Similarly, the various KFHPs’ payments to the Permanente Medical Groups were totaled across Form 990s. Importantly, not all entities that comprise the KFHP segment report financial information, and reporting standards for the Form 990s and the audit are not necessarily identical. Plausibly, the numbers derived from the Form 990s may be an underestimate. For instance, the revenue generated by private captive insurers such as Oak Tree Assurance is not included in the Form 990s. Therefore, we include the “at least” tag in the charts to make it clear when we expect a number to be an underestimate.

The Kaiser Hospitals are a single nonprofit reporting entity, and so they file a single IRS Form 990. We used the Kaiser Hospital Form 990 information to determine payments from the KFHPs to the Kaiser Hospitals.

To arrive at external revenue numbers for the KFHPs, we used the total revenue number from the KFHP Form 990s and subtracted the payments that the Kaiser Hospitals report making to the health plans (i.e., intersegment payments). Similarly, external revenue for the Kaiser Hospitals was determined by subtracting payments from the KFHPs from total revenue reported in the Kaiser Hospital Form 990.

Combining these sources of external revenue reported in the Form 990s yielded a figure that was $6.8 billion lower than the combined audit (a 6.6% difference). The KFHP and hospital numbers are therefore adjusted upward by 6.6% to try to bring them closer to the likely true revenue numbers. Insofar as this distorts their actual revenue, it is likely to overstate the Kaiser Hospital external revenue and understate the KFHP external revenue. For this reason, a “≈” is used before the external revenue figures to indicate their status as best-guess estimates.

Payment numbers from the health plans were checked against the receipts reported by the hospitals and vice versa. Overall revenues were checked against the numbers in the combined audit.

Note on Permanente Medical Groups

The Permanente Medical Groups are an important part of the Kaiser structure, but their revenue does not sit inside the Total Revenue at the top of the chart, and their inclusion should not be taken to imply that. Still, substantially all revenues for the Permanente Medical Groups come from KFHPs and Kaiser Hospitals.

Spreadsheet methodology

For each of the five organizations of interest, we assembled a spreadsheet to show the full list of subsidiaries, their location, and their industry.

Download the spreadsheet data

For UnitedHealth Group, Elevance, CVS, and Humana, information in these spreadsheets is derived from Exhibit 21.1 of the 10-K and Schedule Y of state National Association of Insurance Commissioners (NAIC) filings. For these four companies, the Schedule Y is taken from an annual statement for 2025. The 10-K is the FY2025 or FY2024 filing. We gave preference to the FY2024 10-K for UHG since it is much more complete than the FY2025 filing.

For Kaiser, the information is taken only from the Schedule Y since no 10-K is available. Note that it is taken from a December 31, 2025, filing. So, the Kaiser spreadsheet we provide is more up-to-date than the Kaiser financial chart.

Corporations have substantial discretion over the number of subsidiaries they include in 10-K filings, so these spreadsheets are not a complete source. Similarly, the Schedule Y may only show the corporate structure for portions of the business with insurance holdings. Consequently, branches of the corporate tree, such as the CVS line of pharmacy businesses, may get lost in the Schedule Y reporting. For these reasons, we use the Schedule Y as a basis and supplement with the 10-K when possible.

Importantly, this picture remains incomplete. For instance, because of detailed previous work, we know that UHG has more than 2,600 unique subsidiaries, but we identify only around 2,500 based on the most recent Schedule Y and the 10-K. Notwithstanding, we believe we are capturing the majority of subsidiaries for these companies, and that we are providing a strong sense of the underlying structure.

The information from the 10-K and Schedule Y was compiled into a single file and then fact-checked for accuracy using Bloomberg, PitchBook, NPIdb, and public news sources. Using these sources, we attempted to assign an industry classification to as many subsidiaries as we could. We also considered relationships with other entities in the tree and the entity names themselves.

Taking our cue from the Sunlight Report on UHG, the industry classifications were “insurance,” “clinical,” “pharmacy,” “international,” and “other.” Where possible, holding companies are generally classified with the same type as the majority type among companies that they hold. In some cases, this strategy was not viable because the holding company contained many types of subsidiaries with no clear majority, or the types of subsidiaries were unclear. In these cases, the holding company was classified as “other.” Companies for which we did not have a compelling guess based on available data were also classified as “other.” Otherwise, classifications used the following taxonomy:

1. Is it primarily a non-U.S./international subsidiary or foreign operating entity?

→ International

2. Is it primarily PBM, pharmacy, specialty pharmacy, infusion, retail (including CVS’ large retail/pharm store chain), mail order, dispensing, drug distribution, or pharmacy benefit operations?

→ Pharmacy

3. Is it an insurer, health plan, insurance administrator, TPA, broker, agency, benefits administrator, claims administrator, insurance sales/distribution entity, or insurance-specific holding/admin/tech entity?

→ Insurance

4. Does it deliver patient care, or directly administer provider/practice/clinical operations such as an IPA, MSO, ACO, clinical billing/RCM, care coordination, EAPs, or provider management?

→ Clinical

5. Is it technology, analytics, consulting, media, real estate, finance, acquisition, government contracting, general services, corporate, unknown, or otherwise not captured above?

→ Other

We did not include all subsidiaries listed on the 10-K or Schedule Y in our final spreadsheets. Most importantly, only those subsidiaries which were majority owned by the parent company (i.e., 50% or greater) or one of its subsidiaries were included in the final spreadsheet. That is to say, we included all subsidiaries of the ultimate parent company, but we did not attempt to include all affiliates. Second, where there was a duplicate subsidiary on the Schedule Y, as identified by an Employer Identification Number, these were collapsed into a single subsidiary. Finally, in a handful of cases, an entity does not have a listed parent on the Schedule Y, nor does it have a parent that can be inferred from the 10-K. For these companies, the relationship with the rest of the corporate tree (and the subsidiary vs. affiliate status) is unclear, and so the company is dropped from the spreadsheet.

Each subsidiary is attributed to a parent. The parent company is whichever company has greater than 50% ownership. Attribution of a parent allows each company on the tree to be traced back to the ultimate parent. In the unusual event that there was exactly 50% ownership, the subsidiary is still included, and the 50% owner is listed as the parent. In the even rarer case that ownership of a subsidiary was split exactly 50/50 between two listed parents, we chose a primary parent to include in the parent company column. Importantly, that does not imply anything about the relative importance of that parent company compared to the other 50% owner. The primary parent is generally whichever parent is at a higher level on the corporate tree. If both parents are at the same level, the primary parent is the parent company appearing first on the Schedule Y or 10-K (with preference given to the 10-K). The second parent is also shown.

Special treatment of Kaiser

For Kaiser, the relationship between parent and subsidiary is less clear than it would be in a for-profit public company. Control might be a result of other mechanisms besides percent ownership. Further, not all entities can be linked back to a single parent due to Kaiser’s consortium structure. For these reasons, we include all entities on the Kaiser Schedule Y in the final spreadsheet, including those which are not majority-owned.