[eganp]

Some insurers (looking at you United Health Care) have wholly owned PBMs. Thus, the PBM is an asset in its insurance trust. Any profit the PBM makes will appear as in increase in asset valuation for their insurance trust, or balance sheet in some cases.

However, insurance margins remain unaffected as the money did, in some sense, go out the door and is no longer in control by the insurer directly. It's not fraud. It's just anti-competivie self-dealing. So, no, it's not profits per se, but rather increased valuation via clever financial engineering.

[lotsofpulp]

All the big managed care organizations (better word than insurer) have their own PBM. I would need to read more about how an MCO accounts for assets set aside for insurance, but I would be surprised if insurance regulators are allowing it, considering how strict insurance regulators are.

A quick search shows me that on page 73 of Cigna’s 10-K, it clearly does not have its Express Scripts division accounted for in the “Investment Assets” section, based on how low those numbers are.

It just does not pass the smell test to me. The simpler answer, based on all the numbers, is that managed care organizations are squeezing other entities in the healthcare chain, but due to competitive pressure and upper profit margin limits due to ACA, they are not raking in big bucks.