Mark Cuban's Healthcare Rant: A Kick-the-Tires Look at the Real Cost Drivers

Mark Cuban's recent tirade cuts to the heart of what many see as a broken system. His central argument is stark: healthcare has become a game of who can rip off who and get away with it. "Our healthcare has become a game of who can rip off who and get away with it," he wrote on social media, pointing to a specific mechanism. Hospitals, he says, don't just bill the patient; they also look at what the insurance company is willing to pay and then inflate the bill accordingly. "If they believe the insurance company is willing to pay MORE THAN WHAT WAS ON THE PATIENT BILL, THEY WILL INCREASE THE BILL to the insurance company," he noted. That higher cost then gets passed straight through to the self-insured employer, making the final bill far larger than the initial patient charge.

This isn't just a theory. It's backed by a major Senate investigation. A report released by Senator Chuck Grassley details how UnitedHealthcare allegedly took advantage of the Medicare Advantage program to increase profits. The investigation, based on over 50,000 pages of internal company documents, found that UnitedHealth systematically made its patients appear sicker than they were. This allowed the company to capture a higher number of diagnoses and diagnosis codes than any other Medicare Advantage plan, resulting in significantly higher payments from the government. "Medicare Advantage is an important option for America's seniors, but... Congress has a responsibility to conduct aggressive oversight," Grassley stated, calling the practice a breach of the program's intent.

Cuban's critique extends beyond hospitals and insurers. He argues that the CEOs running the companies paying these bills often don't understand the costs they're incurring. "Even though health insurance costs are the second-largest line item after payroll, CEOs don't really understand it or know anything about it," he told Fortune. This lack of grasp means executives are often blind to the real drivers of inflation, from the inflated hospital bills to the complex profit games played by insurers and pharmacy benefit managers. The result is a system where everyone-from patients to employers to taxpayers-gets nicked, while the middlemen profit.

The Real-World Utility Test: Is the System Working for Consumers?

The real test of any system is whether it delivers tangible value to the people using it. In healthcare, the answer is a clear no. The complex financial games between hospitals, insurers, and pharmacy benefit managers create a direct and painful disconnect for the end-user. Patients are left navigating a fog of opaque bills and endless prior authorization hurdles, while the real cost drivers-like inflated hospital charges and profit-maximizing insurance maneuvers-remain hidden from view.

This isn't theoretical. It's the daily reality for employees and families. As Cuban points out, CEOs don't really understand health insurance costs, but their employees do. They worry about whether their kids can get their medications approved, or if a recommended surgery will be denied. The system is designed to extract money, not to ensure care. The result is a constant state of anxiety and financial risk for the consumer, with no corresponding benefit in transparency or predictability.

The stark alternative is Cost Plus Drugs, Cuban's own pharmacy. It operates on a simple, kick-the-tires principle: show the real cost. "It's cheaper to buy Tadalafil than a bag of M&M'S," he notes, highlighting the absurd opacity of the current drug market. By cutting out the middlemen and showing the actual price paid, Cost Plus Drugs proves that transparency and low cost are not just possible, but profitable. This is the utility the current system lacks-it offers no such clarity.

The broader trend only confirms the pressure. Global medical costs are projected to rise by over 10% again next year, with pharmacy spending accelerating sharply. In the US, the healthcare cost increase is expected to remain at 9.6% in 2026. This relentless inflation is not driven by better patient outcomes; it's driven by the very mechanisms Cuban railed against. The system is working perfectly for the middlemen who profit from complexity, but it's failing the consumer at every turn.

Financial Impact and the "Too Big To Care" Smell Test

The financial mechanics behind Cuban's complaints are less about fraud and more about a sophisticated, profit-driven strategy. For giants like UnitedHealth, practices like risk adjustment have been transformed from a simple administrative tool into a core business line. The Senate report is clear: UnitedHealth has turned the way patients are coded into "a major profit-centered strategy." This isn't a side hustle; it's a deliberate, large-scale effort to maximize payments from the government by pushing coding intensity to the "utmost degree." The company leverages its sheer size, vertical integration, and data analytics to stay ahead of regulators, effectively siphoning off taxpayer money in breach of the program's intent.

This creates a classic "too big to care" scenario. The profit center is real and substantial, but the risk is also immense. The report details aggressive strategies that have drawn intense scrutiny from Congress and federal agencies. This isn't just a reputational hit; it's a regulatory time bomb. The practice opens the door to costly interventions, fines, and potential changes to the Medicare Advantage payment structure itself. For now, the scale provides a buffer, but the longer this game continues, the more likely it is to trigger a major policy crackdown that could dismantle the profit model overnight.

Cuban's view on this complexity is telling. He sees the intricate financial engineering not as innovation, but as a barrier to entry. When you get regulatory capture and scale capture that's dominated by just a few players, like the medication businesses, it opens the door wide open for new players who aren't so greedy. The system's opacity and the dominance of a handful of massive insurers protect the status quo. It's a sign of financial engineering, not genuine consumer value. The real innovation is in the profit games, not in improving care.

Yet, for all the noise around billing and coding, the fundamental cost pressures are structural and growing. The Senate report focuses on a specific profit center, but broader data shows inflation is driven by utilization and drug prices. Pharmacy cost trend was 2.5 points higher than medical trend, and the utilization of behavioral health services is rising sharply. These are powerful, underlying drivers that no amount of risk adjustment gaming can eliminate. The system is being squeezed from multiple angles: by the complex profit games of the middlemen, and by the real, rising cost of treating patients. The financial impact is a double whammy-profit centers that are risky, and cost pressures that are relentless.

Catalysts and What to Watch: The Path to Change

The real test now is whether this public pressure can force a tangible change. The Senate report is the immediate catalyst. It has already labeled UnitedHealth's risk adjustment practices as "a major profit centered strategy" and a business in itself. The next step is regulatory action from CMS or legislative reform from Congress. If lawmakers follow through on Senator Grassley's call for aggressive oversight, it could dismantle the very profit center the report details. That would be a direct hit to a core revenue stream for the largest Medicare Advantage plan.

Watch for any moves to cap payments based on risk scores or to increase audit intensity. The report shows UnitedHealth leveraged its size and data analytics to stay ahead of regulators. Any new rules would need to be robust enough to close that gap. For now, the status quo protects the profit game, but the longer it lasts, the more likely a policy crackdown becomes.

On the transparency front, Cuban's public pressure is a double-edged sword. His call for insurers to divest all "noninsurance assets" and break up the big players is a direct challenge to the current model. The key metric to monitor is whether this rhetoric translates into concrete changes in billing practices. Are hospitals and insurers starting to show more price clarity, or is the system doubling down on opacity?

Finally, keep a close eye on the inflation numbers themselves. The projected medical cost trend of 8.5% for 2026 is a critical benchmark. If it holds or accelerates, it will continue to pressure corporate budgets and consumer wallets, fueling more public anger. If it starts to cool, it could signal that cost-control measures are finally taking hold. For now, the relentless climb in costs is the most powerful force driving the need for change.