If any company symbolizes the complexity of the US health insurance market, it's UnitedHealth Group Inc.

The largest insurance company in the US by market capitalization, UnitedHealth has expanded both horizontally and vertically over the past decade through a steady stream of acquisitions targeting other health insurers, hospitals, primary care operators and pharmacy benefit providers.

In recent years, regulatory scrutiny of UnitedHealth has increased, and Democratic politicians in particular have shown a willingness to question the company's expanding healthcare remit. At the federal level, this has included more DOJ pushback on acquisitions. In Minnesota, the home state of Democratic governor and vice presidential nominee Tim Walz, state legislators recently banned for-profit companies like UnitedHealth from administering Medicaid plans in a law set to go into effect in 2025. The state legislation was signed into law by Gov. Walz.

November's election is set to be another inflexion point in a key question affecting the US health insurance market as well an array of other industries: How big is too big?

A look at the platforms of the two major political parties underscores a vastly different emphasis on federal oversight of insurance. When the Democratic Party revealed its official platform during its August convention in Chicago, the word "insurance" appeared 21 times. Of these references, 16 were in relation to health insurance matters — a sign of how important this area of the insurance industry is to Democratic lawmakers. Specific topics included the size of co-pays and access to abortion medication, among other issues. In contrast, a similar search of the Republication Party's official platform found no references to insurance.

Antitrust activity

Looking at the most recent Democratic and Republican administrations, a majority of the top 10 UnitedHealth deals for which values are available occurred during the Trump administration, but the three that occurred during the Biden administration included the two largest by value. Overall, UnitedHealth's M&A activity remained strong across both administrations.

The largest deal by UnitedHealth over the past two administrations involved the insurance group's Optum subsidiary acquiring data analysis service Change Healthcare Inc. for over $13 billion in 2022. The DOJ Antitrust Division tried to block the deal, arguing that it would provide too much access to competitor data.

While the DOJ ultimately lost the case, the Biden administration has signaled a willingness to bring big antitrust cases, said Randy Stutz, president of the American Antitrust Institute.

"When companies are considering an anti-competitive merger and thinking about whether they can squeeze it through with a weak remedy, I think the government's willingness to challenge and litigate is a really significant development," Stutz said.

In February, reports emerged that Minnetonka, Minnesota-based UnitedHealth was also under investigation by the DOJ over antitrust concerns. Generally, managed care insurers like UnitedHealth receive greater federal scrutiny due to their involvement in federally subsidized health plans like Medicare Advantage and Medicaid.

While details about the DOJ's current investigation have yet to emerge, previous unsuccessful efforts by the regulatory agency to stop United from merging with Change Healthcare may provide some clues as to potential areas of inquiry, Stutz said.

UnitedHealth's vast reach as the largest managed care insurer in the country that also is a major owner of physician groups and a large pharmacy benefits manager poses a multi-level entry obstacle for competitors, Stutz said. Regulators may be concerned about the risk of insurance group leveraging its supply chain for exclusionary purposes as well.

"Typically, in antitrust cases the concerns you start to see are barriers to entry," Stutz said. "Problems can arise when a new firm wants to enter, grow or compete in a market but can't easily do so because there are so many barriers to entry when a powerful firm is vertically integrated."

Although the specifics of any DOJ investigation have not been made public, in July, Assistant Attorney General Jonathan Kanter of the DOJ's Antitrust Division released a statement taking credit for UnitedHealth abandoning its proposed acquisitions of Stewardship Health Inc. and a related company.

"When you ask Americans what keeps them up at night, affording and accessing quality health care is too often at the top of their list," Kanter said. "These transactions are among UnitedHealth Group's latest proposed provider-related acquisitions, and they raised questions about quality of care, cost of care and working conditions for doctors, nurses and other healthcare providers."

Neither UnitedHealth nor the DOJ Antitrust Division responded to requests for comment.

Two-term picture

While a Democratic administration is considered more likely to pursue antitrust enforcement, there is no guarantee that a second Donald Trump administration would avoid antitrust actions, said Kevin Hahm, a partner with law firm Hunton Andrews Kurth LLP.

"Vertical mergers are usually an area where you would think an enforcement agency under a Republican or more conservative administration would not be as enforcement-minded, and I think that's generally true," Hahm said. "However, it was under Trump ... that DOJ challenged AT&T/Time Warner merger, which was the first vertical merger challenge in over 40 years."

One area in which the two administrations may differ in their approach is regarding private equity and its role in serial acquisitions, which conservatives tend to view less critically, Hahm said. "We're also seeing rhetoric about how United may be too big to fail, which all complicates how antitrust enforcement against United could change under another Trump administration."

In terms of overall deal activity, UnitedHealth closed more deals under the Trump administration than the subsequent Biden administration.

This appears in keeping with a more activist approach taken by antitrust regulators appointed by the Biden administration. FTC chair Lina Khan, who was appointed to the role 2021, has been particularly vocal on a range of antitrust issues. That said, UnitedHealth has completed 25 deals under the Biden administration, compared to 36 deals completed under the Trump administration.

The coming weeks will reveal if Khan's activist agenda will steer US antitrust enforcement for another presidential administration.