Mark Cuban Says, 'I Don't Know Cars Or Rockets,' But Schools Elon Musk On How American Health Insurance Works

When Elon Musk took to X to question why Americans aren't “getting their money's worth” despite the United States leading the world in health care administrative costs, Mark Cuban stepped in with some tough truths. Cuban, known for his straight talk and deep dive into health care reform, gave Musk and other CEOs a crash course on how their decisions directly impact health care costs and quality in the U.S.

"The key is the contracts CEOs of self-insured companies sign," Cuban wrote in response to Musk's tweet. He explained that many of these contracts, especially with Pharmacy Benefit Managers (PBMs), are at the root of spiraling costs and poor care.

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The key is the contracts CEOs of self insured companies sign. You may not understand why, but the healthcare insurance and PBM contracts YOU have signed for Tesla, SpaceX , @X, along with CEOs of other big companies , have more impact on healthcare costs and quality of care… https://t.co/5RbX3wLBRv

— Mark Cuban (@mcuban) December 5, 2024

What's Wrong With PBM Contracts?

Cuban laid out seven major issues with typical PBM agreements that affect not only companies like Musk's Tesla and SpaceX but also their employees and families:

1. No control over claims data: Companies don't get full access to the data about what's being billed or paid.
2. Restricted formularies: PBMs control which medications are covered, often prioritizing profits over health.
3. Overpriced “Specialty Drugs”: These are often marked up without justification.
4. Rebates come at a cost: "Rebates" paid by pharmaceutical companies ultimately increase employee deductibles and co-pays, hitting the sickest and oldest the hardest.
5. Harming independent pharmacies: PBMs often reimburse small pharmacies less than the cost of brand-name drugs, driving many out of business.
6. No manufacturer collaboration: Companies can't directly work with drug manufacturers to create targeted wellness programs.
7. Opaque contracts: Many PBM agreements include NDAs, making the system inefficient and increasing prices nationwide.

"All of this allows the big PBMs to continue to distort the pharmacy market for literally EVERYONE," Cuban emphasized.

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What CEOs Can Do

Cuban didn't just highlight problems – he offered solutions. He called on Musk and other CEOs to take control by directly contracting with health care providers and working with "pass-through" PBMs that prioritize transparency and lower costs. Cuban also suggested that educating CEOs on these practices should be a priority for Musk's future agency, the Department of Government Efficiency (DOGE).

"It starts and ends with educating CEOs like yourself, of self-insured companies, to do what is in the best interest of their employees and families," Cuban wrote.

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He also warned about the legal risks for companies that ignore these issues, citing them as a sign of what's to come. There “will be ubiquitous class action lawsuits coming for all CEOs next," he warned.

Cuban clarified that while he might not "know cars or rockets," he knows how to fix health care. His message to Musk – and other CEOs – was straightforward: the power to change the system is in their hands. By prioritizing transparency and better contracts, they can make a massive impact on the cost and quality of health care for millions of Americans.

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