Insurance rations coverage

Insurance doesn’t insure anything. It rations access to care through systematic value extraction and denial mechanisms.

The word “insurance” itself is a linguistic sleight of hand. It suggests security, protection, assurance. The reality is a rationing system that determines who deserves care and who doesn’t, based on algorithmic value calculations that prioritize profit extraction over human welfare.

The rationing apparatus

Every insurance policy is essentially a rationing card. It specifies exactly how much care you’re allowed to receive, under what circumstances, and through which approved channels.

Pre-authorization requirements, referral networks, formulary restrictions, annual caps, lifetime limits—these aren’t administrative inefficiencies. They’re engineered bottlenecks designed to reduce utilization through systematic friction.

The system works by making access so bureaucratically complex that many eligible people simply give up. This is rationing through exhaustion.

Value extraction through denial

Insurance companies employ armies of medical professionals whose job is to find reasons to deny claims. They call this “utilization management.” It’s actually demand suppression through institutional gaslighting.

Every denied claim represents pure profit. The premium was collected, the service was promised, but the payout was avoided. This is the fundamental business model: collect more than you pay out by denying as much as possible.

The medical professionals who work in these denial mills aren’t practicing medicine. They’re enforcing rationing protocols designed by actuaries and financial analysts.

The prior authorization scam

Prior authorization is rationing disguised as medical review. It creates artificial scarcity by requiring bureaucratic approval for treatments that doctors have already deemed necessary.

The process is deliberately designed to be time-consuming and frustrating. Most doctors eventually learn to avoid prescribing treatments that require extensive prior authorization paperwork, even when those treatments are clinically optimal.

This isn’t a side effect—it’s the intended function. Prior authorization trains providers to self-ration by choosing less effective but pre-approved alternatives.

Network restrictions as geographic rationing

“In-network” and “out-of-network” designations create artificial geographic scarcity. You can’t see the best specialist for your condition if they’re not in your network, regardless of medical necessity.

These networks aren’t based on quality of care. They’re based on negotiated discount rates. The doctors willing to accept the lowest reimbursement get included. The best doctors, who can afford to stay out-of-network, become inaccessible to most patients.

This creates a two-tier system where access to high-quality care is rationed by economic class.

The deductible barrier

High-deductible health plans are explicit rationing mechanisms. They’re designed to make people avoid care by creating financial penalties for utilization.

The psychological effect is immediate: every medical decision becomes a cost-benefit calculation. People ration their own care by skipping preventive services, delaying necessary treatments, and avoiding specialists.

The insurance company wins twice: they collect premiums and reduce payouts by making patients reluctant to use their benefits.

Formulary restrictions as pharmaceutical rationing

Insurance formularies don’t list the best medications—they list the cheapest medications that the insurance company has negotiated deals for.

When your doctor prescribes a medication that’s not on formulary, you have three options: pay full price, try a cheaper alternative that may be less effective, or go without treatment.

This is direct pharmaceutical rationing based on insurance company profit margins rather than medical efficacy.

The appeals theater

The appeals process creates an illusion of due process while functionally serving as another layer of rationing. Most people don’t appeal denials, and most appeals are denied anyway.

The appeals process is designed to be complex enough that only the most persistent patients will navigate it successfully. This filters out the majority of denied claims through bureaucratic attrition.

Even when appeals succeed, the delay often renders the treatment less effective or unnecessary. A cancer treatment approved after six months of appeals may no longer be viable.

Administrative rationing

The complexity of insurance administration itself serves as a rationing mechanism. Billing codes, coverage guidelines, eligibility requirements—this labyrinthine system ensures that many entitled services are never claimed.

Healthcare providers employ specialists whose sole job is to navigate insurance bureaucracy. This administrative overhead is built into healthcare costs, meaning patients pay for the rationing system that restricts their own access.

The mythology of risk pooling

Insurance companies claim they pool risk to make healthcare affordable for everyone. In reality, they segment risk to maximize profit from healthy people while minimizing exposure to sick people.

Healthy people subsidize sick people only within carefully calculated actuarial limits. When the math changes, insurance companies simply raise premiums, change coverage terms, or exit markets entirely.

Risk pooling is real, but it’s engineered to benefit shareholders first and patients second.

Value-based care as refined rationing

“Value-based care” sounds progressive, but it’s actually a more sophisticated rationing system. Instead of denying individual claims, it rations care at the population level through capitation and bundled payments.

Providers receive fixed amounts to care for specific populations, creating incentives to provide as little care as possible while meeting minimal quality metrics.

This shifts rationing decisions from insurance companies to healthcare providers, making the rationing less visible but more systematic.

The real value proposition

Insurance companies don’t sell security—they sell the illusion of security while systematically rationing actual care.

The value they provide is not to patients but to employers and governments who need a market-based mechanism to limit healthcare expenditures without taking direct responsibility for rationing decisions.

Insurance serves as a buffer between those who pay for healthcare (employers, taxpayers) and those who need healthcare (patients), allowing the former to limit expenditures while the latter bears the consequences of rationing.

Rationing by design, not accident

Every aspect of the insurance system is designed to ration care. The complexity, the restrictions, the denials, the delays—none of this is accidental or inefficient.

It’s a highly efficient system for achieving its actual purpose: extracting maximum value from healthcare premiums while minimizing payouts through systematic rationing.

The inefficiency narrative serves to obscure this reality. Insurance companies aren’t incompetent—they’re performing exactly as designed.

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Insurance doesn’t fail to provide security. It succeeds at rationing access to care while maintaining the illusion of protection. Understanding this distinction is essential for any honest discussion about healthcare reform.

The question isn’t how to make insurance more efficient. It’s whether rationing healthcare through private profit-seeking entities serves any legitimate social purpose beyond enriching shareholders and shielding policymakers from accountability.