Who Gave Insurance Companies All This Power?

In my last post I talked about how insurance companies now decide what medications we get, when we get them, and how hard we have to fight to get them.

So who gave them that power?

This didn’t come from one law. It came from a series of laws—passed over decades—by both Democrats and Republicans.

Start with ERISA (Employee Retirement Income Security Act, 1974). That was passed by Congress and signed by a Republican president (Ford). It had broad bipartisan support. That law allowed large employers to run their own health plans and limited what patients can do when claims are denied. That’s a big one. Most people have never heard of it, but it quietly took power away from patients and states and centralized it.

Then in the 1980s and 1990s you get the rise of managed care. Not one single law, but a shift supported by both parties—Republicans and Democrats—pushing HMOs and cost control. That’s when networks, referrals, and utilization review really took off. That’s where the insurance companies started saying, “We’re not just paying—we’re deciding.”

Then you get Medicare Modernization Act (2003) under a Republican Congress and President Bush. That created Medicare Part D and locked in the role of pharmacy benefit managers (PBMs). It also specifically prevented Medicare from directly negotiating drug prices. That decision pushed more control into the hands of insurers and PBMs.

Then comes the big one everyone talks about—the Affordable Care Act (ACA, 2010) under Democrats.

No, it didn’t create prior authorizations or formularies. Those already existed. But it did a few things that made the system tighter.

It expanded coverage to millions more people. It added essential benefit requirements. It added regulations on insurers.

That sounds good—and some of it is.

But here’s what also happened.

More people in the system. More rules. More cost pressure.

And when you put pressure on cost, the system responds the only way it knows how:

It tightens control.

That’s where you see more:

• prior authorizations
• step therapy
• narrower formularies
• quantity limits

So no, Obamacare didn’t start this.

But yes, it added fuel to it.

Then you’ve got the role of agencies like the FDA and HHS.

Congress passes broad laws. Agencies write the rules. Those rules aren’t technically laws, but they function like them. That’s how our system works. Both parties have supported that structure for decades.

The FDA decides how drugs get approved, labeled, and brought to market. HHS oversees the system. CMS runs Medicare and Medicaid rules.

Insurance companies then build their policies around all of that.

So now you’ve got:
Congress writing broad laws
Agencies writing detailed rules
Insurance companies enforcing them
PBMs controlling drug access

And the patient stuck in the middle.

I’m not saying we don’t need regulation. I want safe medications. I don’t want garbage drugs getting pushed on people.

But somewhere along the way, it stopped being about safety and started being about control.

And both parties had a hand in building it.

Republicans pushed market-based systems, employer plans, and PBMs.

Democrats expanded coverage, added regulations, and increased system complexity.

Put it all together over 40–50 years and you end up with what we have now.

More medications than ever. More inhalers than ever. More options than ever.

And somehow it’s harder than ever to get the one your doctor says you need.

This didn’t just happen.

It was built.