Mark Cuban Says People Are Getting ‘Ripped Off’ by Health Insurers — And New Technology Can Reveal Where They Can Save Money

Billionaire entrepreneur Mark Cuban says that employers looking to minimize healthcare costs should turn first to an AI chatbot. 

The famous former Shark Tank investor spoke on an episode of the Digital Health Heavyweights podcast that aired earlier this week. He asserted that AI chatbots like ChatGPT, Claude and Gemini can quickly look through complicated healthcare contracts and pinpoint where companies are most vulnerable. In other words, ChatGPT can help employers save money by identifying where they are overpaying for healthcare. 

“Run them all. Every healthcare contract you have run through Claude or whatever, and just say, ‘Where am I getting ripped off?'” Cuban said.

AI chatbots have a greater attention span than human beings, according to Cuban. They are able to parse through the terms of a contract and help employers understand what they are paying for. 

“Our eyes roll back in our heads whenever we try to get into the minutiae and the small print of all these 100-page contracts or more,” Cuban said. However, he cautioned that “every single definition, every single word in your contract” functions “to take advantage of you.”

Cuban is taking on the healthcare industry with his startup, Mark Cuban Cost Plus Drug Company, an online pharmacy focused on generic medications. Launched in 2022, it now offers thousands of generic drugs. 

Cuban suggests going straight to hospitals

Tapping into AI to understand healthcare contracts is only the beginning, Cuban said on the podcast. He added that employers have to contend with the financial risks they are agreeing to, rather than going in blindly and assuming that insurers have their best interests at heart. 

“People default to insurance as if the insurance company’s going to give them something more than what they put in,” Cuban said. “That’s never the case.”

Cuban suggested that companies with the necessary financial backing should consider signing contracts directly with hospitals, clinics or physician groups instead of just leaning on traditional insurers. The advantage there would be negotiating lower prices directly with hospitals.

Cuban’s critique of health insurance companies

Cuban has taken a critical stance against health insurance companies, arguing that they help turn healthcare into a system that overcharges patients, employers and taxpayers. 

In an X post in January, Cuban wrote, “Explain to me why the insurance company will pay $2500 for an MRI when there is a center down the street that will do it for $350?” Cuban says this shows how contracts and pricing structures, not medical needs, influence the final bill for a medical procedure. 

In another X post in January, Cuban described healthcare as a “game of who can rip off who and get away with it.” He said that the reason why healthcare costs are “insane” is that hospitals will not only charge “random costs” but also increase the overall bill to the insurance company if they believe the company is willing to pay more. 

Additionally, “even though health insurance costs are the second-largest line item after payroll, CEOs don’t really understand it or know anything about it,” Cuban said in an interview with Fortune in March 2024.