Fifty Public Trusts: A Case for Taking UnitedHealth and Giving It to the States

Sep 25, 2026 

One company, everywhere

Picture an ordinary medical visit. The doctor who sees you may work for UnitedHealth. The insurer that decides whether to pay may be UnitedHealth. The pharmacy benefit manager that sets the price of your prescription may be UnitedHealth. The clearinghouse that moves the bill between them may be UnitedHealth too.

This is not a thought experiment. UnitedHealth Group is the largest health insurer in the country. Through Optum, it employs or is tied to roughly one in ten American physicians. It controls more than a fifth of the pharmacy benefit market and owns Change Healthcare, one of the nation's main claims pipelines. By one nonprofit's count, it operates some 2,700 subsidiaries.

Much of this empire runs on public money. Medicare, Medicaid and federal employee plans pour tens of billions of dollars into it every year. We, the public, are already its biggest customer. This essay argues that we should become its owners, and that the right owners are not Washington but the fifty states, holding it in trust for their citizens under conditions that keep it public forever.

A public service run for private return

The first problem is simple arithmetic. When public dollars pass through a for-profit intermediary, some of them become profit. Every dollar returned to shareholders is a dollar that did not pay for a checkup, a prescription or a nurse. In a company this large, that margin is measured in billions.

The second problem is incentive. An insurer earns more when it collects more and pays out less. In Medicare Advantage, that means rewarding aggressive diagnosis coding, which raises government payments, and aggressive denials, which lower costs. In July 2025, UnitedHealth confirmed it was responding to both criminal and civil requests from the Justice Department over its Medicare billing. The allegations remain unproven. But the incentive that produced them is built into the model, and fines do not change a model.

The third problem is fragility. In 2024, a cyberattack on Change Healthcare froze claims and payments across the country for weeks. Clinics missed payroll. Pharmacies could not process prescriptions. A single corporate failure became a national emergency, because one company had quietly become infrastructure.

The fourth problem is conflict. When the same parent owns the insurer, the doctor and the pharmacy, it negotiates with itself. It can steer patients to its own clinics, set prices that shift money between its own divisions, and count payments to its own subsidiaries as medical spending. No regulator can fully police a company that sits on every side of the table.

Why breaking it up is not enough

Reformers in both parties already agree that something must change. In February 2026, Senators Elizabeth Warren and Josh Hawley introduced the Break Up Big Medicine Act. It would bar any company from owning both an insurer or pharmacy benefit manager and a medical provider, and give conglomerates one year to comply. It is a serious bill, and it gets the diagnosis right.

But a breakup changes the shape of the problem, not its nature. The pieces of UnitedHealth would still be for-profit. The insurer would still profit from denials. The physician groups would still answer to investors. And in a consolidated market, the most likely buyers of those pieces are other giants, private equity funds, or the same shareholders under new names.

Antitrust is also slow. Breakups take years of litigation, and the company would spend every one of them fighting. Meanwhile patients keep paying. If the public is going to spend political capital restructuring this company anyway, it should aim for an outcome that actually removes the profit motive from public care.

Why the states should own it

The obvious alternative is federal nationalization. But a single federal health company would be a political lightning rod, vulnerable to every change in administration and remote from the patients it serves. The states are a better answer, for three reasons.

First, the company is already built that way. UnitedHealthcare does not sell insurance as one national entity. It operates through separately licensed subsidiaries in each state, regulated by each state's insurance commissioner. The seams for dividing it already exist.

Second, the states already have the expertise. They regulate insurance, license providers, and run Medicaid, which covers tens of millions of Americans. Many already contract with UnitedHealthcare to manage those Medicaid plans. Handing a state its own plan means handing it something it already oversees.

Third, state ownership is accountable and close to home. A governor, a legislature and a state board face voters who use the plan. A Minnesota plan can reflect Minnesota's needs, and a Mississippi plan Mississippi's. This idea should appeal to progressives who want care freed from profit and to conservatives who want power kept out of Washington. Few proposals can claim both.

How it would work

The takeover would happen in two stages.

In the first, the federal government acquires the company. There are two lawful routes. Congress could authorize purchase under eminent domain, which the Fifth Amendment permits for public use with just compensation to shareholders. Or, if the Justice Department investigations end in convictions or the company approaches collapse, a court or federal agency could place it in receivership. There is precedent for federal rescue on this scale: the government took large stakes in AIG and General Motors during the 2008 crisis. Timing matters too. In 2025, UnitedHealth lost roughly half its market value in a single month, a reminder that the price of acquisition is not fixed.

In the second stage, a federal trustee distributes the pieces. Each state receives its licensed insurance subsidiaries and the clinics, physician practices and facilities located within its borders. Medicare Advantage members move into traditional Medicare or a federally run successor, since Medicare is a federal program. Nationwide infrastructure such as claims processing is either divided among states or placed in a nonprofit owned jointly by all of them, so no single point of failure remains. Businesses that no state wants to run, such as administering self-funded employer plans that federal law places beyond state control, are sold to nonprofits or cooperatives rather than back to the market.

A public trust, not a windfall

Here is the danger in handing valuable assets to fifty governments: some will be tempted to sell them. A cash-strapped legislature could auction its new health plan to the highest bidder, close a budget gap, and put the whole machine back in private hands within a decade. The transfer must be designed so that cannot happen.

The states should receive these assets not as property but as a public trust, bound by conditions written into federal law and into each state's acceptance agreement:

1.       No resale, no privatization. A state may not sell, lease or spin off its plan or its clinics to a for-profit buyer. Any attempt triggers automatic reversion of the assets to a federal trustee.

2.       Surpluses stay in care. Any surplus must be reinvested in lower premiums, better benefits, higher wages for frontline workers, or care in underserved areas. It may not be swept into the state's general budget.

3.       Coverage floors. A state may improve benefits and access but may not cut them below the level members had at the time of transfer, and must accept every eligible resident who applies.

4.       Open books. Finances, denial rates, wait times and executive pay are published every year. Governing boards meet in public and include patients, clinicians and workers, not only political appointees.

5.       Regional compacts. Smaller states may pool their plans through interstate compacts, so a state with a modest population can share administration and risk with its neighbors.

6.       Independent audit. A federal inspector general audits every state trust, and citizens have standing to sue if a state violates the terms.

These conditions do the work that shareholders once did, in reverse. Instead of a legal duty to maximize return, the new owners carry a legal duty to serve the people who use the plan.

Answering the objections

"It would cost taxpayers a fortune." It would cost a great deal up front. But taxpayers already pay for much of this company's revenue, including its profit margin, every year. A purchase converts an endless stream of payments to shareholders into a one-time investment in a public asset. And if the company is acquired through receivership after proven fraud, the price falls sharply.

"Government can't run health care." Critics point to the VA's wait-time scandals and to Medicare's own improper payments. Those failures are real. But states already run Medicaid, public hospitals and university health systems, and Medicare's administrative costs are lower than private insurers'. The trust conditions, especially open books and independent audits, exist precisely to catch failure early.

"It's unfair to shareholders and retirees." Many pension funds hold UnitedHealth stock. That is why eminent domain requires just compensation. Shareholders would be paid fair value, as the Constitution demands. What they lose is not their money but a future claim on public health dollars that was never theirs by right.

"It's unconstitutional or legally impossible." The Fifth Amendment explicitly contemplates takings for public use, and courts have read public use broadly. Receivership is a routine legal tool. The harder questions, such as federal limits on state regulation of employer plans, are real but solvable through the structure described above.

"Some states won't want it, and some can't handle it." Some will refuse for political reasons, and some lack capacity. Regional compacts address capacity. For states that decline, the federal trustee can operate their share until they are ready, or transfer it to a nonprofit under the same conditions. No state should be forced to run a health plan, but none should lose the chance.

"This is just socialism by another name." It is closer to something older. Americans have long placed essential services in public or cooperative hands when private control failed them: land-grant universities, public utilities, rural electric co-ops. These are not foreign ideas. They are American ones.

Fifty public trusts

Return to that ordinary medical visit. The doctor, the insurer, the pharmacy manager and the claims pipeline are still there. The difference is who they answer to. Instead of a board in Minnetonka accountable to Wall Street, each answers to a public trust in your own state, bound by law to spend its money on your care and forbidden from selling you out.

We do not have to choose between corporate rule and a single distant bureaucracy. We can take the largest private health empire in America, which the public largely funds already, and return it to the people it was supposed to serve, one state at a time.

The question is not whether we can afford to do this. It is how much longer we can afford not to.

Sources

•         DOJ investigating UnitedHealth for potential Medicare fraud (SAN)

•         UnitedHealth confirms federal criminal and civil investigation (ABC7)

•         Senators introduce bill to break up vertically integrated insurers (Becker's)

•         Faith-based investors sue UnitedHealth over M&A impacts (Healthcare Dive)