The Unseen Costs of Private Health Insurance: Why It’s Time to Rethink Our System

The Unseen Costs of Private Health Insurance: Why It’s Time to Rethink Our System

There’s an urgent need to raise awareness about the tactics insurance companies use to maximize their profits, often at the expense of the very people they are supposed to serve. In the ABA industry, including within Acclaim, many seem unaware of how these companies operate and the questionable strategies they employ. The complexity of the topic has led to a lack of critical questioning: What exactly are insurance companies doing for us that couldn’t be done better by alternative systems, like government-funded, single-payer healthcare?

While it’s true that government systems can be subject to misuse by those in power, there’s one thing we can be certain of: When profit-driven giants dominate healthcare, value is inevitably siphoned away from those who need it most—patients and providers alike. The current American insurance system is a dinosaur, resistant to meaningful change because such change would threaten the very profits these companies are built to protect.

A Brief History of Health Insurance: From Necessity to Obstacle

Originally, health insurance was conceived as a necessary intervention to fund medical care, protecting people from the financial ruin that often accompanied serious illness. But as time went on, the industry evolved—not into a system designed to care for people, but into one designed to care for profits. The result? Business leaders and shareholders have consistently lobbied against reforms that would benefit the public, invoking fears of communism during the Red Scare or warning of so-called “death panels” when discussing public insurance options. Ironically, these are the very same insurance companies that restrict care through prior authorizations and narrow networks, effectively creating the barriers they warn us about.

The message to the public has been clear: “This is too complex for you to understand. You don’t want to lose your choices or face even more obstacles to care.” But a closer look reveals that these fears are unfounded and that common sense reforms could simplify the system without sacrificing quality.

The Two Faces of Complexity in Healthcare

It’s important to distinguish between the two types of complexity in healthcare. The first is clinical complexity, which involves the intricate medical knowledge and skills that require years of training. The second is administrative complexity—the maze of legal and operational hurdles that patients, providers, insurers, and the government must navigate. Here, I’m focusing on the administrative side.

Private insurance companies often claim to be more efficient than the government, offering superior products and services. But the reality is that much of the complexity in our healthcare system is by design—an intentional obstacle to accessing care, created to protect profits rather than patients. Studies show that private insurance often results in higher costs, lower quality of care, and reduced access to essential services.

The Illusion of Choice in Private Insurance

When insurance lobbyists talk about “choice,” they often paint a picture of patients freely choosing their providers and services. But in reality, the current system forces patients to navigate a web of in-network providers. If your provider isn’t in-network, the costs can be prohibitive, even if you’ve been paying high premiums. Out-of-network care is technically available, but for most families, who have limited savings, it’s not a realistic option.

A single-payer healthcare system would eliminate the need for these restrictive insurance networks. By removing the profit motive, we could offer providers fair reimbursements, simplify access to care, and tie the system to existing licensure structures. This would make healthcare more accessible and equitable for everyone.

Time for a Change

The American health insurance system is outdated and inefficient, burdening patients and providers with unnecessary complexity and costs. It’s time to rethink how we approach healthcare in this country. By exploring alternatives like single-payer systems, we can create a more just, effective, and accessible healthcare system that truly serves the people.