Is Health Insurance a Scam? The Profit!

Health insurance is supposed to provide financial protection in times of medical need, yet many people feel like they’re paying into a system that gives them little in return. Sky-high premiums, deductibles that never seem to pay off, and unexpected claim denials make it easy to wonder: Is health insurance a scam? While insurance itself isn’t an outright fraud, the way the industry prioritizes profit over people has left millions frustrated. The core problem lies in the fact that insurance companies operate as for-profit businesses—meaning their goal isn’t just to help you afford care, but to maximize revenue and minimize payouts.

At its core, health insurance functions by pooling money from policyholders, using those funds to pay out claims when people need medical services. But insurers make money when they collect more in premiums than they pay out in claims—so they have a financial incentive to deny coverage, limit benefits, and raise costs. Tactics like narrow networks, prior authorizations, and formulary restrictions make it harder for patients to access the care they assumed their insurance would cover. Even with employer-sponsored plans, workers often find themselves responsible for rising out-of-pocket costs, all while insurers post record-breaking profits.

This profit-driven model is why so many people feel like insurance is rigged against them. Instead of focusing on patient well-being, insurers prioritize their bottom line, making critical healthcare decisions based on financial calculations rather than medical necessity. It’s why some life-saving medications are placed on high-cost tiers, why routine procedures require endless paperwork, and why getting the care you need often feels like an uphill battle. While insurance is essential in a system where healthcare costs are exorbitant, it’s clear that the industry itself is designed to serve shareholders first, and patients second. Until meaningful reforms address these conflicts of interest, many will continue to feel like they’re being scammed by a system that was supposed to protect them.