In December last year, the CEO of the largest health insurance company in the United States was shot three times on a street in New York and later died from the injuries.
What is more surreal than the case itself is that the American public showed no sympathy for the deceased but instead filled the incident with mockery and sarcasm. As for the suspect, Luigi, the American public hailed him as a “hero” who was “carrying out divine justice.” A crowdfunding website raised $130,000 in just three days to help him with legal fees. Similarly, on February 27, a masked individual fired shots at the home of an insurance company CEO in Oregon. The company also received a threatening letter containing detailed personal information of some employees and their families. In China, insurance companies also receive considerable criticism, but it is still outrageous for them to become “public enemies” to the extent of risking lives, as seen in the U.S. What exactly have they done? What lessons can be learned for the insurance industry in mainland China? Today, starting from the U.S. healthcare system, we will explore the differences in insurance enrollment, claims, regulation, and comparisons with mainland China. 1. The Only Developed Country Without Universal Healthcare “Oranges grown south of the Huai River are oranges; those grown north become trifoliate oranges.” The uniqueness of U.S. insurance, especially health insurance, must be understood from its social context. The U.S. is the only developed country without universal healthcare. Government insurance covers only specific vulnerable groups, while commercial health insurance dominates the market. Data source: Huatai Securities’ “2025 Annual Strategy for the Pharmaceutical and Health Industry: Innovation, Global Expansion, and Commercial Insurance in Synergy, the Industry Expected to Bottom Out and Rebound” The total exceeds 100% because some individuals hold multiple insurance policies. Approximately 8% of the population has neither government nor commercial health insurance. The dominance of commercialization is also reflected in U.S. hospitals, which are primarily divided into three categories: – Public hospitals: Account for about 15%-20%, including federal, state, and local government hospitals, primarily serving specific groups such as military personnel and low-income individuals. – Private non-profit hospitals: Account for about 69%, benefiting from tax exemptions and donations but prohibited from distributing profits, which must be reinvested in hospital development and service improvements (e.g., Mayo Clinic). – Private for-profit hospitals: Account for about 16%, mostly chain medical institutions operating for profit through market-driven practices. From these points, it is clear that the U.S. healthcare system is primarily characterized by “privatization + marketization,” which starkly contrasts with China’s system. This is undoubtedly a double-edged sword. The advantage is that the U.S. boasts world-leading medical standards and a developed insurance products and market. For example, the aforementioned Mayo Clinic is globally recognized as the top medical institution, with leading organ transplant technologies.For instance, the U.S. boasts the fastest global approval process for new drugs and technologies, leading to breakthroughs like CAR-T therapy.
The country also offers a wide range of health insurance products, such as cost-effective HMO plans requiring primary care physician referrals and more flexible PPO plans with broader provider networks. However, healthcare faces an “impossible triangle” of quality, efficiency, and affordability. Under its market-driven system, costs are largely determined by negotiations among hospitals, pharmaceutical companies, and insurers rather than government regulation. This results in exorbitant medical expenses: some pay a week’s wages for six antibiotic pills, others face ambulance bills exceeding $10,000, and many declare bankruptcy due to medical debt. OECD data shows U.S. per capita healthcare spending reached $12,700 in 2022—double the average of other wealthy OECD nations—yet life expectancy ranks second-lowest among them. With government insurance covering only seniors, children, and specific groups, working-age adults must purchase private insurance to avoid financial ruin from illness. But are U.S. insurers reliable? Let’s start with purchasing coverage. II. “No Insurance? Face Penalties” Initially, insurers only covered high-income, healthy individuals, leaving 49 million uninsured in 2010. That year, Congress passed the Affordable Care Act (ACA), or “Obamacare,” which introduced two pivotal rules to expand coverage: – Citizens must enroll in health insurance or pay penalties. – Insurers cannot deny coverage or charge extra based on pre-existing conditions. This “mandated enrollment + mandated coverage” approach raised the insured rate from 85% to 95%. However, high-risk enrollees flooded the market, causing claims ratios to skyrocket to 98%-103% by 2014 (ACA data), bankrupting some insurers. With no option to price-risk individually, premiums surged collectively. Monthly costs tripled from $284 (2014) to $621 (2018) in four years. Many insurers exited markets, leaving only 1-2 carriers in some states—fueling oligopolies and further premium hikes.In summary, the Affordable Care Act (ACA) aimed to position U.S. commercial insurance as a ‘public healthcare’ solution to address insufficient coverage, but the trade-off was skyrocketing premiums.
While enrollment surged, the claims process became highly contentious. 3. High Payouts, but Also High Denial Rates The ACA specifically mandated insurers’ medical loss ratio (MLR): – Insurers must spend 80%-85% of premiums on medical claims or refund the difference. – For every $100 in premiums collected, at least $80 must be paid out in claims. UnitedHealth Group, one of the ACA’s two primary insurers, reported an 87% MLR in Q4 2024, compared to China’s short-term health insurance MLR of around 40%. This seems commendable. However, UnitedHealth also had an abnormally high denial rate: 32 out of 100 claims were denied, with only 68 approved. Another giant, Cigna, had an 18% denial rate—significantly lower. But a 2024 class-action lawsuit revealed that three Cigna-employed doctors denied over 300,000 claims in two months, averaging 1.2 seconds per case—sometimes without even opening files. In other words, getting a claim approved often comes down to luck. High payouts but low approval rates may seem paradoxical, yet this is the reality in the U.S. Let’s break down the MLR formula: MLR = (Approved Claims × Average Claim Cost) / Total Premiums The most plausible explanation? Exorbitant healthcare costs drive up average claim amounts. As a dominant insurer, UnitedHealth has deep ties with medical providers and owns hospitals like LHC Group—a leader with 30,000 employees across 37 states, serving 60% of Americans aged 65+. UnitedHealth doesn’t just process claims; it influences treatment methods and costs, diverging sharply from traditional insurers. U.S.-educated netizens note that medical bills far exceed actual costs. Sometimes, life-saving treatments are withheld simply because insurers won’t cover them. In contrast, China’s claim approval rates exceed 95%, with some insurers reaching 99%.However, these are aggregate figures encompassing both small and large claims. For small claims, Chinese insurers have generally been efficient, with many supporting online claims. For instance, when I filed a claim for “Da Hu Jia No. 6,” the payout was processed within minutes.
In contrast, payout rates for large claims, such as critical illness insurance, have not been disclosed. This is an area worth monitoring. Regarding payout ratios, basic medical insurance typically breaks even with slight surpluses. For “Huimin Bao” (a type of supplemental health insurance), some provinces like Zhejiang require a minimum payout ratio of 90%. However, there are no mandatory payout ratio requirements for other commercial health insurance products. If anything, there is an implicit rule that long-term health insurance products can only raise premiums if their payout ratio exceeds 85%. This is outlined in the “Notice on Premium Rate Adjustments for Long-Term Medical Insurance Products.” Recently released data shows that short-term health insurance payout ratios hover around 40%, only half of the U.S. figure. This raises the question: Should China establish a minimum payout ratio requirement? Currently, it may not be necessary, as the market size for million-yuan medical insurance is relatively small, at around 100 billion RMB, and has been developing for less than a decade. In the long run, if the health insurance market expands, pricing data matures, and millions of consumers are affected, regulators may introduce policies to protect consumer rights. Given the high claim denial rates, one might ask: Does U.S. regulation address this issue? IV. High Claim Denial Rates: Where Are the Regulators? The U.S. insurance regulatory system is divided into two parts: – Federal oversight: Primarily focuses on antitrust matters. – State oversight: Each state has its own regulatory body and insurance laws, with varying degrees of strictness. For example, New York is relatively stringent, while Texas is more lenient. First, let’s examine the complaint process. Under the Affordable Care Act, consumers must first file an internal appeal with the insurer. If the claim is still denied, they can appeal to an external independent review entity. However, most denials are ineligible for external appeal, as insurers retain adjudication authority. According to a 2020 Maryland claims dispute report, 64% of external appeals were withdrawn. By 2011, only disputes based on medical necessity or clinical judgment could proceed to external appeal, yet denials based on medical necessity accounted for less than 1% of cases. (Source: KFF, a U.S. nonprofit healthcare research organization) Another KFF survey revealed that when health insurers deny coverage for necessary medical services, only about 10% of adults file complaints, and 60% are unaware they can appeal.Apart from filing complaints, litigation is another option.
However, the vast majority of Americans choose to endure silently, with only about 0.2% of denied claims formally appealed. This means only one out of every 500 denied patients opts to go to court. On one hand, legal fees in the U.S. are expensive, making litigation costly. On the other hand, insurance companies have dedicated legal departments and often choose to defend cases in states with more lenient regulations, leaving ordinary individuals at a significant disadvantage. Additionally, the Affordable Care Act (ACA), designed to protect vulnerable insurance consumers, is now on shaky ground. In April and July 2016, two major providers, UnitedHealth and Humana, announced they would significantly reduce their participation in the ACA’s government health insurance exchange. In August 2016, another provider, Aetna, announced its complete withdrawal from the platform. A 2017 poll showed that 45% of the public viewed the ACA as a “good program,” while 41% held the opposite opinion. After taking office, President Trump repeatedly expressed dissatisfaction with the ACA, claiming he would propose a better alternative. The future of U.S. healthcare policy remains highly uncertain. In contrast, we may be far more fortunate. China has a well-established complaint mechanism managed by local financial regulatory authorities, which regularly publishes and evaluates the complaint rates of insurance companies. Litigation costs in China are also relatively low, and the law and judges tend to favor insurance consumers, such as through the principle of favorable interpretation in insurance law. Insurance companies often find themselves at a legal disadvantage, losing most lawsuits. While claim denials do occur in China, the regulatory environment is more consumer-friendly. V. Final Thoughts The U.S. boasts advanced medical technology and a developed insurance market, yet these have sparked widespread discontent. When rights as fundamental as healthcare and insurance are controlled by a few interest groups, ordinary people may find themselves at the mercy of others. While China may not offer the best medical technology, it ensures equitable access to healthcare for the majority, which is the core of its healthcare reform policies. Beyond public healthcare, private insurers play a role in improving the quality of care. With limited influence, there is little risk of following the U.S. path. What we question and criticize today may be the foundation of our progress in the decades to come, while what we admire may prove fleeting in the grand sweep of history.Understanding the insurance claim process is essential for policyholders to ensure a smooth and efficient experience. This guide provides a step-by-step overview of how to file a claim, what documents are required, and how to follow up with your insurer.
Key steps in the insurance claim process include: 1. Notifying your insurance company immediately after an incident. 2. Gathering all necessary documentation, such as police reports or medical records. 3. Submitting the claim form along with supporting evidence. 4. Cooperating with the adjuster during the investigation. 5. Receiving the settlement offer and reviewing it carefully. It is important to keep detailed records and communicate promptly with your insurer to avoid delays.
