What ails the health insurance industry

Deny, delay, and depose pave the way for insurance company profits and widespread policyholder anger

- Monika Halan

Murders usually stoke a rush of sympathy for the victim and her/his family, as it should. But the murder of Brian Thompson, CEO of UnitedHealthcare, on a New York street on December 4, 2024, instead brought to the surface the simmering public anger against insurance firms which "deny, defend and depose" as a strategy to avoid claims to earn higher profits. In fact, these words were found on the bullet casings used by the assailant who has now been caught.

Thomson led the largest health insurance firm in the United States (data from tinyurl.com/mrnszwj8) with 2023 revenues of almost $360 billion. Other than being the largest company, it is also known as the one with the highest claim denials, denying, as per ValuePenguin, 32% of all claims whereas the best company denied just 7% (data from tinyurl.com/dp74kw6a).

Social media comments played on standard responses in customer care when one tries to reach a health insurance firm, with one person tweeting: "I submitted a claim for my condolences but it was denied". However, no amount of public anger, misplaced or otherwise, can ever justify the murder or the criminal intent behind it.

Closer home, data on health insurance claims in the Indian market has also put the issue centre stage. Data for 2023 from the Insurance Brokers Association of India (IBAI) shows some worrying claim trends for health insurance (report here: tinyurl.com/42mydkc8).

There are two main inferences from the data. First, the public sector firms are far more consumer-friendly in terms of their claims record than private sector firms. Worse, a few private health insurers have very poor claims behaviour.