Is Health Insurance a Scam or Just Broken by Design

Most people don’t understand how health insurance works until they need it—and by then, it’s often too late. Surprise bills, denied claims, and mountains of fine print can make even insured patients feel like they’re being scammed. But is health insurance really a scam, or just a broken system that's no longer working for most people?

The Premium Trap: Paying More for Less

Premiums have been rising steadily for the past decade, yet coverage often feels thinner than ever. Many Americans now pay hundreds every month just for the privilege of meeting a $5,000+ deductible. When you finally do use your insurance, you may still be on the hook for co-pays and “uncovered” services. It raises the question: Are we paying for protection or just buying access to paperwork?

The Deductible Illusion

Deductibles were once meant to separate minor expenses from major ones. Now, they feel like a financial hurdle designed to prevent people from actually using their coverage. For many families, a high deductible means avoiding care altogether until things become emergencies. That’s not risk-sharing—that’s deterrence. It shifts the burden of cost from the insurer back to the patient, quietly and efficiently.

Pre-Approvals and Denials: The Hidden Gatekeepers

You might think being insured means your doctor decides what treatment you need. Think again. Insurance companies often require “pre-authorization” for everything from MRIs to medications—sometimes even after a physician has already recommended it. Denials are common, appeals are slow, and patients are stuck in the middle. It’s care by algorithm, not medicine by judgment.

The Lack of Transparency

Health insurance operates in a black box. Patients rarely know what services will cost until after they’re rendered. Networks change without warning. A procedure that’s “covered” might still cost thousands depending on who performs it and where. It’s the only industry where customers buy a service and only find out the price weeks later—after it’s too late to opt out.

Who Really Benefits?

Let’s follow the money. Insurance companies report record profits year after year. Meanwhile, medical debt remains the leading cause of personal bankruptcy in the U.S. The system seems perfectly designed—for insurers. Between negotiated rates, administrative fees, and denied claims, the margins are lucrative. And all this while patients cut pills in half to stretch prescriptions.

Scam or Structural Failure?

So is it a scam? Technically, no. But the line between broken system and intentional exploitation is thin. The structure incentivizes cost-cutting, denial, and complexity—not patient care. It’s not about whether insurance exists, but whether the way it currently works is still fit for purpose. Until transparency, fairness, and usability are prioritized, it’s hard to argue that health insurance is doing its job.