The Magic Kingdom Has Limits

Disney just pissed me off.

A few days ago, it was announced that beginning in 2027, spouses and domestic partners of Disney employees will no longer be eligible for the company’s health plan if they have access to coverage through their own employer. Children will remain eligible, as will spouses who have no other employer-sponsored option.

So, to be clear, Disney is not throwing every employee’s spouse into the street without an insurance card. But it is telling working spouses to go use their own company’s plan.

Disney is not the first employer to do this. Spousal exclusions and surcharges have been around for years. But there is something especially jarring about Disney making this move now. This is one of the largest and most profitable entertainment companies in the world, built around a brand that has spent nearly a century selling families happiness, magic and delicious turkey legs.

Apparently, the magic has limits.

Disney has every right to make this decision. From a corporate perspective, it may even be smart. If a spouse has access to another employer’s insurance, Disney is effectively volunteering to pay a healthcare expense that another company could assume instead. Disney’s executives have a responsibility to control costs and produce value for shareholders. I understand the argument.

I still find the decision morally reprehensible.

Corporate values are easy to advertise when they are free. They only mean something when honoring them becomes expensive. A company cannot build its identity around supporting families while treating the families of its own employees as expendable costs.

Disney reported approximately $2.6 billion in net income in its most recent quarter. Former Disney CEO Bob Iger, who just joined Josh Kushner in a deal to acquire the Los Angeles Lakers at a $12.5 billion valuation, received nearly $46 million in compensation during Disney’s 2025 fiscal year. That was more than 800 times the compensation of the company’s median employee. His successor, Josh D’Amaro, began his tenure this year with an annual compensation package potentially worth tens of millions of dollars.

Lowering executive compensation will not solve Disney’s healthcare problem. Even eliminating the CEO’s entire pay package would cover only a fraction of the company’s dependent healthcare expenses. But compensation reveals priorities. Disney is willing to spend tens of millions of dollars on one executive because it believes he creates value. It is restricting spousal healthcare because it regards that expense primarily as a liability.

Employees would be wise to note the distinction.

I approach this story from a slightly unusual position. Readers know I spend my days operating an independent pharmacy, so I see firsthand what happens when insurance coverage changes. I also run a company of approximately 70 employees, so every year I sit on the other side of the table and decide which health insurance plans we can afford to offer them.

It is one of the least enjoyable parts of my job.

At my company, C.O. Bigelow, employees become eligible for health insurance after a brief probationary period. We offer three levels of coverage and allow employees to enroll spouses and children. The company currently contributes $500 per employee each month, regardless of which plan that employee chooses.

Our most commonly selected option is the middle-tier plan with individual coverage. After Bigelow’s contribution, the employee still pays $611.62 per month. That means the combined monthly premium for one person is more than $1,100 before that person fills a prescription, sees a physician or pays a deductible.

This coming year, our average premium increase is approximately 13%.

Every year’s renewal presents the same unpleasant decision. As a company, we can absorb the increase, pass some of it along to employees or reduce the quality of the coverage. This year, we are increasing Bigelow’s contribution so the company can absorb the increase and shield our employees from it.

I don’t mention this because I want a pat on the back. We are fortunate to be able to do it. I mention it for perspective. C.O. Bigelow is an independent family business with approximately 70 employees. Disney employs more than 160,000 people and earns billions of dollars.

The health plans I select for my team are also the plans used by me and my family. My parents receive their insurance through the company. I am never choosing a plan that only other people will have to endure, which has a useful way of clarifying the mind during renewal meetings.

I believe employees should feel safe, secure and taken care of. In the United States, family health coverage has become part of the social contract between an employer and an employee. I would feel like a fraud if I preached that philosophy and abandoned it the moment the bill became inconvenient.

Most employees, however, do not see the full bill. They see the amount deducted from each paycheck and understandably consider that the cost of insurance. The company’s contribution remains mostly invisible. That money is compensation. It could have been paid as wages, invested in the business or added to profits. Instead, the employer uses it to purchase health coverage, and the tax code encourages this by treating employer-sponsored insurance more favorably than ordinary income.

Approximately 154 million Americans under 65 receive health insurance through an employer. In 2025, the average annual premium reached $9,325 for individual coverage and $26,993 for family coverage. Employers paid most of that amount, with workers contributing an average of $6,850 toward family premiums.

Health insurance is one of the most expensive things many employers buy. It is also the part of an employee’s compensation package they are least likely to understand.

Most people assume the name printed on their insurance card identifies the company paying their medical bills. At large employers, that is often wrong.

Many corporations operate self-funded health plans. An insurance company may provide the physician network, process claims and answer the phone, while the employer ultimately pays the claims. The insurer is functioning as an administrator, while the employer carries much of the financial risk. This means that a million-dollar cancer treatment, a long hospital admission or a year of expensive specialty medications can eventually appear in some form on the employer’s balance sheet.

The arrangement places companies in a role they were never designed to perform. A movie studio should not be responsible for determining which obesity drugs its marketing team can access. A retailer should not need a strategy for oncology spending. A small pharmacy should not have to predict whether the medical needs of its employees will make next year’s premiums unaffordable.

Yet here we are.

Employers expect healthcare costs to rise another 11% or more in 2027, the largest projected increase in more than two decades. Cancer treatments and GLP-1 drugs receive much of the attention, and for good reason. But hospital prices, specialty medications, administrative waste and healthcare consolidation are also driving the bill higher.

The exact mixture is different for every company because the cost is driven by the health of real people. One employer may have several workers using GLP-1s, while another may have two families facing cancer. There is something gross about looking at employees and their dependents through that lens, but the financial structure leaves employers little choice.

Disney has now chosen one of the simplest ways to reduce its exposure: send working spouses somewhere else.

On a balance sheet, that is simple cost control. At the pharmacy counter, it looks different.

When a family changes insurance plans, ongoing care rarely transfers cleanly. A medication that was covered before may now require prior authorization. A physician may be out of network. Deductibles reset. Copays rise. Patients who have taken the same drug for years are suddenly asked to prove that they still need it.

“Access to another plan” sounds reassuring until you understand that the other plan may have a different network, formulary and deductible. Insurance coverage is not interchangeable simply because both options satisfy the technical definition of insurance.

Disney is shifting a cost to another employer. Its employees and their spouses will absorb the disruption.

As traditional coverage becomes more expensive and restrictive, more healthcare will move outside it. We are already watching this happen with prescriptions. Generic medications can sometimes be purchased through cash-pay pharmacies for less than an insurance copay. Mark Cuban Cost Plus Drug Company built an entire business around transparent generic pricing. Manufacturers including Eli Lilly and Novo Nordisk now offer direct cash-pay programs for GLP-1 drugs.

Insurance will remain necessary for hospitalization, cancer treatment and other catastrophic expenses. Very few families can cash-pay their way through leukemia. But routine and predictable healthcare is beginning to break away from the insurance system.

That development is both genuine innovation and an indictment of the system being bypassed.

Transparent cash prices can remove layers of PBM manipulation and administrative friction. They can also create another job for the patient. Everyday people must now compare their insurance copay with a pharmacy’s cash price, check manufacturer programs, evaluate discount cards and determine whether any of the money they spend will count toward their deductible.

We keep giving patients more choices and calling it empowerment. Much of the time, we are simply transferring work to people who lack the information and training to do it well.

That does create an opportunity for independent pharmacies. If healthcare continues fragmenting into employer plans, cash-pay services, manufacturer programs and separate drug-benefit platforms, patients will need someone who understands how those systems overlap. The pharmacist’s role should extend beyond handing over the prescription. We should also help patients determine the safest and most affordable way to obtain it.

But I digress…

Disney’s announcement should anger people. It should also frighten them.

Disney may become the most visible domino in this new cycle of benefit cuts. The company has given other employers cover to make the same calculation. Once one recognizable corporation decides that working spouses belong on somebody else’s balance sheet, the next decision becomes easier.

This is how benefits erode: one reasonable corporate decision at a time.

In fairness, Disney did not create the problem. It is responding rationally to a healthcare system whose costs are becoming impossible to contain. That does not absolve the company. I still believe it could afford to continue coverage if it genuinely cared about the values it preaches. But that only makes the warning more serious.

If Disney no longer believes the economics of family healthcare are worth protecting, there may not be enough magic in the kingdom to save the rest of us.

Giddy up.

Alec Wade Ginsberg, PharmD, RPh
4th-Gen Pharmacist | Owner & COO, C.O. Bigelow
Founder, Drugstore Cowboy