Health insurance companies report profits of billions annually while raising premiums on beneficiaries and routinely rejecting patient and medical provider claims. By ignoring the public perception, these companies are inviting increased scrutiny by Congress.

Becker’s Payer Issues reported on February 12, 2025, that the big seven health care companies made a combined $34.1 billion in 2024. These companies include UnitedHealth Group, which led the way with $14.4 billion in profits. These companies were the beneficiaries of additional government support for premiums because of the Obama Administration and COVID pandemic policies which kept premiums artificially low. These policies are expiring, yet the companies continue to worry more about profits than addressing the high cost of health care because of lower government support to cover the premium cost for consumers.

Even with record profits, health insurance companies are continuing to raise premiums. The KFF reported in 2024 that “over the last year, the average single premium increased by 6% and the average family premium increased by 7%. Comparatively, there was an increase of 4.5% in workers’ wages and inflation of 3.2%. Over the last five years, the average premium for family coverage has increased by 24%, compared to a 28% increase in workers’ wages and inflation of 23%.” In March of 2023, the COVID era Medicaid spending allowed most Americans to be insured ended with 24 million losing coverage between April 2023 and June 2024.

The bad news is that the rise in health insurance premiums is expected to accelerate in 2026 when premiums are expected to double. The projected expiration of Obamacare premium tax credits next year will lead to an “increase by over 75% on average with premiums at least doubling in 12 states.” Consumers and small businesses who used health care exchanges will experience sticker shock next year when they receive a bill. Some plans may be priced out of those markets completely. The Congressional Budget Office (CBO) projects that about four million people will lose coverage in 2026 because of high premiums. Premiums are going through the roof in the upcoming year and which only increases the pain on an already inflated rate.

There is nothing wrong with making a profit, but if profits are made at a time when consumers are paying more and getting less, there is a problem, as in a highly regulated industry, the free market cannot be used to reduce costs to attract consumers.

Additionally, at a time when health insurance companies’ profits are skyrocketing, there is evidence these companies are increasing the denial of claims. Fierce Healthcare reported, “an increase in overall initial denial rates from 10.15% in 2020 to 11.2% in 2022, and then up again to 11.99% in the first three quarters of 2023.” They looked at 2020-23 “increases in 90-day-plus accounts receivable’s percentage of payer claim value, both for patients with Medicare Advantage (19% to 36%) and commercial (27% to 36%) coverage.” Other reports indicate that 19% of in-network services are denied while out-of-network denials have hit 37%. A problem is that less than one in a hundred denied claims make it to an appeals process because it is difficult to appeal, yet appeals are usually successful. Estimates range to about $262 billion in denied claims every year. The strategies used to deny claims pads the profits of these already outrageously profitable health insurance companies.

Health insurance companies are supposed to cover healthcare services for patients who pay into their plans; instead, they are creating narrow networks which do not meet the consumer needs and consistently raising premiums. This leaves providers, hospitals, and patients footing the bill unfairly and has led to many hospitals, especially in rural and underserved areas, closing their doors. 

By increasing premiums and increasing the denial of claims, insurance companies keep pace with their margins and report those consistently higher profits - no matter the result for the patient at the doctor’s office.

Hiking premiums and rejecting claims at an increasing rate is something Congress might want to address. American patients deserve good healthcare at a reasonable cost. Healthcare insurance companies should worry less about increasing profits when they are causing outrage among patients.

Peter Mihalick is a former legislative director and counsel to two Republican members of Congress.

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