The health insurance business model generates profit by limiting the delivery of its own product

Private health insurance premiums increase to cover the cost of uncompensated emergency room care. Under the federal EMTALA law, emergency rooms must treat all patients regardless of their ability to pay, distributing the cost of that care across public programs, hospital budgets, and private premiums. This occurs when patients delay treatment because insurers deny coverage. Insurers limit the delivery of their core product through claim denials, delayed reimbursement, and the shrinkage of provider networks. This mechanism allows insurers to earn more profit by collecting premiums while avoiding the payment of claims. The driver of this conduct is a corporate mandate to prioritize the maximization of shareholder value. In 2023, the five largest U.S. health insurers reported more than $70 billion in operating profits.