Mark Cuban has a message for anyone who owns a fund that holds big health insurers: you're part of the problem. But if your portfolio is built on broad-market ETFs, you might not have a choice.

The billionaire entrepreneur took to X this week to urge investors to tell their fund managers to dump the biggest insurance carriers. His argument? These companies put their share prices ahead of patients and are a big reason healthcare costs keep climbing.

"If you own shares in a fund that owns any of the biggest insurance carriers, you are part of the cost of healthcare problem in this country," he wrote. "Those companies put the share price over the health of you, your family, co-workers and friends. The worst part Is they will lie and…"

In a follow-up post, Cuban doubled down, accusing insurers of underpaying and delaying payments to providers, clawing back money, hiding contract terms, and holding onto premiums to earn interest while patients wait for care.

It's a fiery take, and it raises a fair question: can investors actually follow his advice? For anyone using ETFs as the core of their portfolio, the answer is complicated.

Your ETF Already Owns Them

Take the Vanguard Total Stock Market ETF (VTI), for example. As of June 30, it held 3,531 stocks, with 9.1% of its portfolio in healthcare. That includes UnitedHealth Group Inc (UNH), CVS Health Corp (CVS), Cigna Group (CI), Elevance Health Inc (ELV), Humana Inc (HUM), and Centene Corp (CNC)—the very companies Cuban is calling out.

If you own the Vanguard S&P 500 ETF (VOO) or the State Street SPDR S&P 500 ETF Trust (SPY), you're in the same boat. Those funds track the S&P 500, and the index includes all those insurers too. So even if you're not deliberately betting on health insurance, you're still exposed to it.

That's the thing about broad-market ETFs: they're designed to mirror an index, not to make moral judgments. When you buy one, you're not saying "I love every company in here." You're saying "I want diversified exposure to the U.S. stock market." And that means owning a little bit of everything—including companies whose practices you might find objectionable.

The Passive Investor's Dilemma

Cuban's advice essentially asks investors to use their ownership stakes to pressure fund managers. But here's the problem: an individual investor can't tell an index ETF to drop a company and still expect it to track its benchmark. The whole point of an index fund is to follow the index, warts and all.

To actually eliminate the exposure, you'd need to switch to a different strategy—maybe a fund with specific exclusion criteria, like an ESG fund or a custom portfolio. But that's a big step for most people, and it comes with its own trade-offs.

This highlights a broader tension in the ETF industry. Index investing has made it cheap and easy for millions of Americans to own the market. But owning the market also means owning companies you might not want in your portfolio. The more passive your approach, the less control you have over the individual names you hold.

For someone with $100,000 in a broad-market ETF, the dollar exposure to any single insurer is probably pretty small. But multiply that across millions of retirement and brokerage accounts, and those small stakes add up to significant ownership—and potentially significant shareholder influence.

Cuban's challenge is whether investors are willing to use that influence. It's a fair question, and one that's not going away anytime soon.