What Is Insurance, Anyway?
November 17, 2025
Private health insurers are widely viewed as bad actors in the U.S. health care system. They regularly deny medically appropriate care and present patients and caregivers with arduous prior-authorization rules, often reporting record profits along the way.
In the Medicare space, a telling critique is that private Medicare Advantage (MA) plans cost the government more per patient than does original Medicare. Perhaps the clinching argument in this judge-and-jury scenario is that MA patients regularly switch their coverage to original Medicare after encountering serious health problems.
These things are factually correct. At the same time, private health insurers are not primarily responsible for our ridiculously high drug prices, though they do put a heavy corporate finger on the scale. They are not responsible for how much we pay doctors and other health care providers, hospitals, and medical equipment companies.
The leading culprit in U.S. health care is that it is privately owned. This creates powerful incentives and pressures for companies to put the interests of their owners above those of their patients. This is hardly news.
What is news is that American health insurance is not really insurance. It is a program that legally sanctions the extraction of money from government and patients to subsidize providers. Nearly everyone feeds at this trough and it’s bankrupting the country.
